District Not Recorded

Government Agencies and Non-Profits Collaborate to Launch Public Education Campaign

The Justice Department, in coordination with the U.S. Postal Inspection Service (USPIS), the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and other law enforcement partners, today announced wide-ranging enforcement actions – including criminal charges, economic sanctions, seizure of criminal proceeds and civil injunction lawsuits – along with the execution of search warrants to combat a global network of mass mailing fraud schemes that collectively have defrauded millions of elderly and vulnerable victims across the United States out of hundreds of millions of dollars.  Simultaneously, a consortium of government agencies and non-profit groups led by the department’s Consumer Protection Branch and Elder Justice Initiative announced a public education campaign to heighten public awareness and educate potential victims and their families about these schemes. 

The actions announced today are part of a broader effort by the department and its international law enforcement partners to attack fraud schemes targeting older Americans and other vulnerable populations that involve individuals and entities across the globe, including Canada, France, India, the Netherlands, Singapore, Switzerland, Turkey and the United States. 

“Every year, fraudulent mail schemes target millions of Americans with false promises of wealth and riches, swindling hundreds of thousands of our fellow citizens,” said Attorney General Loretta E.  Lynch.  “Today’s actions send a clear message that the Department of Justice is determined to hold the perpetrators of these harmful schemes accountable.  And they make unmistakably clear that we are committed to protecting our people from exploitation – especially our older citizens, who are so often the focus of these shameful ruses.  I want to thank our partners across the federal government for their assistance in bringing these actions, and I pledge the department’s ongoing dedication to ending mail fraud.”

“The law enforcement and civil injunction efforts announced today are just a part of our initiative,” said Postal Service’s Chief Postal Inspector Guy Cottrell. “We believe that consumer education is the best defense against these scammers. We can’t arrest all of these con artists, so preventing the crime is critical.”

The mail schemes involve a complicated web of actors located across the world and each scheme follows a similar pattern.  Fraudulent “direct mailers” create letters falsely claiming that the recipient has won, or will soon win, cash or valuable prizes, or otherwise will come into good fortune.  In order to collect these benefits, the letters say that the recipients need only send in a small amount of money for a processing fee or taxes.  The letters appear to come from legitimate sources, typically on official-looking letterhead, and – even though they are in reality identical form letters – the letters appear to be personally addressed.  Some solicitations even use fonts that appear to be handwritten.

Today’s actions include both criminal and civil cases against multiple “direct mailers” who, collectively, are responsible for dozens of schemes involving tens of millions of dollars every year.   In addition, today’s actions also seek to shut down several other actors who work with the mailers to carry out these schemes: an India-based printer that manufactures the solicitations and arranges for bulk shipment to U.S. victims; list brokers who buy, sell or rent lists of victims from one mailer to another so that once a victim has fallen prey to one scheme, others are able to target this victim; and a Canadian payment processor that, for more than 20 years, has helped dozens of international fraudsters gain access to U.S. banks and take money from victims.

“The Civil Division’s Consumer Protection Branch is working with international and domestic law enforcement through the International Mass-Marketing Fraud Working Group to dismantle these complex frauds through both civil and criminal actions,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.   “And we will continue to work with federal partners and non-governmental organizations to educate the public about this threat to vulnerable consumers.”

“The defendants targeted the elderly and vulnerable by selling false promises of cash and lavish prizes,” said U.S. Attorney Robert L. Capers for the Eastern District of New York.  “Not surprisingly, the only good fortune befell the defendants.  We will employ every available means, including educating consumers, to protect the public from these schemes.”

Actions against Canadian Payment Processor

The Justice Department, OFAC, and USPIS took simultaneous actions today against PacNet Services Ltd. (PacNet), an international payments processor and money services business based in Vancouver, Canada, along with affiliate companies and their operators.  Today OFAC designated the PacNet Group as a significant transnational criminal organization (TCO) pursuant to Executive Order (E.O.) 13581, “Blocking Property of Transnational Criminal Organizations.”  OFAC is also designating a global network of 12 individuals and 24 entities across 18 countries.  As a result of today’s action, all property and interests in property of the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are prohibited from engaging in transactions with them.

In addition, USPIS has sought and obtained a seizure warrant in the U.S. District Court for the Eastern District of New York for the funds in a PacNet U.S. bank account that is used to process payments received through fraudulent mailings.  The matter is being investigated by the USPIS team assigned to the Consumer Protection Branch, in conjunction with the USPIS’s Newark Division, Internal Revenue Service-Criminal Investigation’s Newark Field Office and Homeland Security Investigation’s El Dorado Money Laundering Task Force.

According to court filings made public today, PacNet has a 20-year history of engaging in money laundering and mail fraud, by knowingly processing payments on behalf of a wide range of mail fraud schemes that target victims in the United States and throughout the world.  According to these records, in 2016 alone, PacNet has processed payments for the perpetrators of more than 100 different mail fraud campaigns, collectively involving tens of millions of dollars.  In doing so, PacNet provides fraudsters in other countries with unfettered access to U.S. banks.  The records also identify PacNet as the processor for each of the defendants named in the cases announced by the Department today.

“PacNet has knowingly facilitated the fraudulent activities of its customers for many years, and today’s designations are aimed at shielding Americans and the nation’s financial system from the large-scale, illicit money flows that are generated by these scams against vulnerable individuals,” said OFAC Acting Director John E. Smith.  “Treasury will continue to use its authorities to respond to the evolving nature of transnational organized crime.”

Criminal Charges and Civil Injunction Action Filed against Turkish Direct Mailer

In a criminal complaint filed in the U.S. District Court for the Eastern District of New York, the government charged Ercan Barka, 34, a resident of Turkey, with conspiracy to commit mail fraud.According to the criminal complaint, Barka arranged for fraudulent solicitations to be mass-mailed to victims across the United States.The fraudulent solicitations told recipients that they had won cash awards or lavish prize items and needed to pay a “fee” to claim their winnings.Victims allegedly received nothing in return for their fees.Barka was arrested by U.S. Postal Inspectors at JFK International Airport in New York on Sept. 3, as he was about to board a plane bound for Turkey.

The government also brought a civil injunction action under the Anti-Fraud Injunction Statute against Barka and True Vision LLC, a Delaware-based corporation through which he operates.The civil complaint seeks to preliminarily and permanently ban Barka from participating in mail fraud schemes.The complaint alleges that Barka sends millions of fraudulent mailings to potential U.S. victims each year and that, since 2012, U.S. victims have paid more than $29 million to Barka’s mailing campaigns.

Civil Action under the Anti-Fraud Injunction Statute against Swiss/Singaporean Direct Mailer, Indian Printer and Connecticut “List Broker”

In a separate civil action, the United States brought suit to shut down entities and individuals, some of whom have engaged in numerous predatory mail fraud schemes for more than a decade, targeting primarily the elderly and vulnerable.  First, the complaint names BDK Mailing GmbH, Mailing Force Pte. Ltd. and Only Three Pte. Ltd. (collectively BDK).  These entities, under common ownership, are based in Switzerland and Singapore.  The complaint also names BDK’s principals, Chantal Seguy, 58, and Marion Elchlepp, 25, both of Paris, and Aurore Jouffroy, of Zurich.  BDK acts as a “direct mailer” responsible for mailing millions of multi-piece solicitations to potential victims throughout the United States that profess to come from financial entities, scholars and world-renowned psychics, with contrived names like “Harrison Institute,” “Dr. Grant,” “Finkelstein & Partner,” and “Marie de Fortune,” among others.  The solicitations are written to give the impression that they are personalized and inform recipients that they will receive large sums of money, guaranteed money-making methods and/or powerful talismans in return for payment of a fee of $50 to $55.  In reality, the complaint alleges, the purported senders and the promised winnings are fictitious.  Although victims send in the requested fees by cash, check or credit card, they receive nothing in return.  The complaint alleges that tens of thousands of victims send approximately $50 to $60 million annually in response to the defendants’ fraudulent solicitation packets.

In addition, the complaint names Macromark Inc., a Connecticut-based list broker that has marketed BDK’s lead lists to third-party direct mailers, and Mary Ellen Meyer, 45, of Mahopac, New York, a Macromark client service manager.  The complaint alleges that Macromark and Meyer have rented lead lists to BDK and other fraudulent direct mailers who Macromark and Meyer knew would use the lists to personalize and address hundreds of thousands of solicitation packets to potential victims across the United States.  Macromark marketed the lead lists as containing the demographic information of individuals likely to send money in response to the solicitations.  The lists collectively contained approximately 750,000 potential victim names and addresses, according to the complaint. 

Finally, the complaint names Mail Order Solutions India Pvt. Ltd. (MOSI), an India-based printer and distributor, and its principals, Dharti Desai, 49, of New York County and Mumbai, India, and Mehul Desai, also of Mumbai.  As alleged in the complaint, MOSI and its principals have served as one of BDK’s printer/distributors since at least 2005.  MOSI designs, edits and proofreads BDK’s solicitations, then “lettershops” them (folds, inserts and seals the various printed elements of the solicitations into mailing envelopes).  MOSI prepares the letters for entry into the U.S. mail either as air freight to JFK (or another international airport) for delivery to a domestic mailing house, or by shipping the letters to Singapore, Fiji or Hungary for introduction via the foreign post.  The complaint alleges that since 2013, MOSI has shipped at least 24.5 million solicitation packets to the United States.

Civil Action under the Anti-Fraud Injunction Statute against New York Direct Mailer

In another civil injunction action, the department seeks to stop a collection of businesses and individuals who have operated a direct mailing scheme based out of Long Island, New York, since at least 2012.  The  complaint alleges that DMCS Inc., Direct Marketing Consulting Services Inc., Horizon Marketing Services Inc. (Horizon), Quantum Marketing Inc. (Quantum) and their principals, Sean Novis, 46; Gary Denkberg, 53; and Cathy Johnson, 34, all of Nassau County, New York, committed mail fraud in connection with their scheme.  The complaint alleges that the defendants send fraudulent solicitations styled as notifications that the recipient has won a large cash prize, typically worth more than $1 million.  The complaint alleges that the defendants mail hundreds of thousands of solicitations to potential victims throughout the United States every year and have grossed roughly $30.4 million since 2012. 

Consent Decree Entered against Dutch “Caging Service”

Also today, the department announced that the U.S. District Court for the Eastern District of New York entered a consent decree of permanent injunction against two Dutch caging businesses and their principal, Erik Dekker, 54, of Langbroek, the Netherlands, to prevent them from assisting mass-mailing fraud schemes.  The businesses – Kommunikatie Service Buitenland B.V. (KSB) and Trends Service in Kommunikatie B.V. – are known collectively as Trends.  The complaint, which was filed June 1, alleged that Trends and Dekker used P.O. boxes in the Netherlands from which they collected tens of millions of dollars in victim payments for multiple international mail fraud schemes, tracked victims’ information and forwarded proceeds to PacNet for processing.

Also on June 1, Dutch law enforcement agents executed search warrants on the business address used by both companies and on Dekker’s home address.  The Dutch authorities also took control of the Dutch P.O. boxes used by the defendants to receive victim funds.  The coordinated U.S. and Dutch enforcement actions immediately stopped the use of Dutch P.O. boxes to receive payments from fraud victims.  Further investigation revealed that Trends was providing caging services for the Barka and BDK schemes targeted in today’s actions.

Trends and Dekker agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from performing caging services for prize or psychic mailing campaigns, or any other mailing campaign that misrepresents itself to consumers.  The injunction also allows USPIS to intercept U.S. mail headed to the defendants, and to return that mail – along with any money being sent to the defendants – to U.S. victims.

Criminal Charges against Nevada Mass Mailer

On Sept. 20, pursuant to a 24-count indictment unsealed that day, Glen Burke, 56, of Las Vegas, was arrested on charges related to operating fraudulent schemes including a mass-mailing prize campaign that violated a federal court order.  According to the charges, Burke’s business mailed solicitations designed to fool recipients into believing that they had won thousands or millions of dollars.  The solicitations allegedly used fictitious names and in many cases looked like they came from law firms or financial institutions.  The indictment alleges that the solicitations advised consumers to pay a fee – usually $20 to $30 – in order to claim their winnings.  Once consumers paid, however, Burke allegedly failed to send anyone their promised winnings of thousands or millions of dollars.

The indictment also charges Burke and a co-defendant, Michael Rossi, 51, of Las Vegas, with running a fraudulent telemarketing campaign that mirrored the mass-mailing campaign.  Rossi was also arrested on Sept. 20.  According to the indictment, telemarketers hired by Burke and Rossi falsely told consumers that they had been selected to receive a valuable prize worth thousands of dollars, and that they would receive the prize if they bought certain products.  Burke and Rossi are charged with conspiracy, mail fraud and wire fraud in connection with telephone promotions. 

The indictment includes criminal contempt charges against Burke, which stem from a court order entered as part of a Federal Trade Commission (FTC) case brought in 1997, in which the FTC successfully obtained an order that barred Burke from misrepresenting material information to consumers.  Criminal contempt of court has no statutory maximum penalty.

In addition to the contempt charges, Burke and Rossi are each charged with 16 counts of wire fraud, five counts of mail fraud and one count of conspiracy.  Each of these counts carries a statutory maximum penalty of 20 years in prison.  The indictment also seeks forfeiture of criminal proceeds.

FTC Action against California Mailer, Florida Printer and Florida List Broker

The FTC filed a case today in U.S. District Court for the Central District of California against Terry Somenzi, 74, of Los Angeles, who did business through a company called International Advisory Services Inc.; David Raff, 54, of Weston, Florida, and his company, Millennium Direct Inc., also doing business as MDI Lists; and Ian Gamberg, 37, also of Weston, doing business through Printmail Corporate Solutions Inc.  As alleged in the FTC’s complaint, since at least 2013, the defendants participated in mailing hundreds of thousands of cash prize notifications from fictitious companies, including Paulson Independent Distributors, International Procurement Center, Keller, Sloan & Associates and Phelps Ingram Distributors, informing mostly elderly consumers that they won a substantial cash prize of nearly $1 million or more.  The notifications instruct consumers to pay a fee of approximately $25 to collect their prizes, but those who paid received nothing in return.  According to the complaint, Somenzi and Raff, directly and through third-parties, provided the cash prize notifications and mailing lists of consumers’ names and addresses to Gamberg, who then arranged to have the notifications printed and mailed.  Many consumers who paid the “fees” later received numerous other deceptive personalized cash prize notifications from the defendants and other companies who purchased lists containing the consumers’ personal information.

“In the 21st century, the scam in your mailbox just as likely comes from the other side of the world as from the other side of town,” said Director Jessica Rich of the FTC’s Bureau of Consumer Protection.  “The FTC’s efforts to protect consumers don’t stop at our borders; we work with partners around the world against the perpetrators of mass mailing fraud. Regardless of where the fraud comes from, we encourage consumers to let us know if they have been scam victims; we share complaint information with our law enforcement partners in the United States. and abroad.  Report your complaint at www.ftc.gov, or, for international scams, at the 36-agency joint website www.econsumer.gov.”

Iowa Attorney General Actions against List Broker and Direct Mailers

The Iowa State Attorney General took action today against fraudulent mass mailers and others facilitating their schemes.  It negotiated an Assurance of Voluntary Compliance (AVC) with list broker Macromark to resolve allegations that the company facilitated fraudulent activities on the part of operations that mailed deceptive solicitations relating to sweepstakes and psychics.  The AVC with Macromark requires it to refrain from any facilitation of such fraudulent activities affecting Iowa residents and to pay $30,000 into a fund that protects elderly Iowans against consumer fraud. 

The Iowa Attorney General also brought an action under the Iowa Consumer Fraud Act seeking an injunction, restitution and other relief against Waverly Direct Inc., and its owner, Gordon Shearer, a New York-based direct mailer.  Shearer and his company allegedly sent out deceptive mailings from the so-called “Numerological Resource Center.”  These defendants maintain lists of vulnerable people who fell prey to their schemes, according to Iowa's lawsuit, and market these lists to other mass mailers through a list broker. 

Finally, the Iowa Attorney General brought a lawsuit under the Iowa Consumer Fraud Act against Nicholas Valenti of Nevada.  Valenti has allegedly been involved in marketing the rights to send out deceptive mailings regarding techniques for winning lotteries and other chance-dominated gaming activities. 

* * *

The charges and allegations in the indictments and criminal complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.  The claims made in the civil complaints are allegations only, and there has been no determination of liability. 

Public Education

            Reflecting the government’s unified effort to combat elder financial exploitation, the Consumer Protection Branch and Elder Justice Initiative have spearheaded a multi-agency education campaign to inform the public about mass mailing fraud and how it can be avoided.  Agency partners include the USPIS, the FTC, the Consumer Financial Protection Bureau, the Social Security Administration, the Securities and Exchange Commission, the Commodities Futures Trading Commission and USA.gov.  As described in detail in the fact sheet, each agency is using its means of public outreach to broadcast information about the prevalence of mass mailing fraud.  The outreach includes messages to caregivers – such as friends, relatives, social workers and others in contact with older individuals – about the need to be vigilant against prize or psychic letters being sent to those under their care. 

In addition, and as described in detail in the fact sheet, the government has also joined forces with non-governmental organizations in the elder justice and consumer protection arena, each of which will contribute to the public education campaign.  These groups include AARP, Consumers Union, Consumer Federation of America, the Elder Justice Coalition, Meals on Wheels Association of America, National Adult Protection Services Association, National Association of Area Agencies on Aging (n4a), National Association of States United for Aging and Disabilities, National Center for Victims of Crime and National Consumers League.  Using their vast networks and communication tools, these organizations will alert their members and the public to the scourge of mass mailing fraud schemes and offer tips to combat financial exploitation.  Their tools include websites, newsletters, social media channels, training and outreach events and other means.

U.S. law enforcement’s actions against mass-mailing fraud arise out of a larger worldwide effort.  Mass-mailing fraud has been identified as a major financial threat by the International Mass-Marketing Fraud Working Group (IMMFWG), a network of civil and criminal law enforcement agencies from Australia, Belgium, Canada, Europol, the Netherlands, Nigeria, Norway, Spain, the United Kingdom and the United States.  The IMMFWG is co-chaired by the U.S. Department of Justice and FTC, and law enforcement in the United Kingdom.  Recent actions have been taken by law enforcement agencies from several working group countries, including Belgium, Canada, the Netherlands and the United Kingdom, to disrupt mass mailing fraud schemes and gather evidence for prosecution of criminal participants.  Through these efforts, the working group serves as a model for international cooperation against specific threats that endanger the financial well-being of each country’s residents.

More information on fraud against the elderly is available at https://www.justice.gov/elderjustice/.  For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.  

A settlement has been reached with the city of Seattle, Washington, to resolve its liability for injured natural resources at the Lower Duwamish Waterway Superfund Site in Seattle by funding restoration projects, the Justice Department announced today.  To restore the natural resources, the city of Seattle has purchased restoration credits from Bluefield Holdings, a company that develops restoration projects.  This is the first natural resource damages settlement to fund restoration through the purchase of credits in restoration projects developed by a restoration development company.  Each of the contemplated restoration projects address natural resource injuries at the site and the trustees will oversee and ensure the projects are constructed and implemented appropriately.

The settlement is a collaboration involving the city of Seattle, Bluefield Holdings and the Lower Duwamish Waterway Superfund Site natural resource trustees: the National Oceanic and Atmospheric Administration (NOAA), the Department of the Interior (DOI), the Washington State Department of Ecology, the Suquamish Tribe and the Muckleshoot Indian Tribe.  The city of Seattle purchased restoration credits from Bluefield to account for the city’s share of the injuries to natural resources from hazardous substances released into the Lower Duwamish Waterway.  The city’s credit purchase totals approximately $3.5 million worth of restoration, when calculated using the cost of projects developed directly by the natural resource trustees.  In addition, the city will make available a number of properties along the Lower Duwamish Waterway for potential restoration project development by Bluefield. 

“The city of Seattle is acting responsibly to resolve its liability for injuries to natural resources by acting to restore those resources by creatively utilizing restoration credits,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “Everyone comes out ahead when parties resolve their liability in this way, and the benefits of this resolution, cleaner waterways, will be enjoyed by Seattle residents and generations to come.”

Projects developed by restoration development companies can have advantages over more traditional restoration approaches.  For responsible parties that prefer not to develop restoration projects themselves, purchasing credits can be less expensive than paying the natural resource trustees to build a project.  And while natural resources trustees must certify and monitor restoration projects built by others for credits generated by those projects to be suitable to settle natural resource damages liability at the impacted site, this arrangement is much less time-intensive for the trustees than designing and constructing projects themselves.

“Settlements like this demonstrate that when trustees work with responsible parties to focus on natural resources we can restore the environment without litigation,” said Regional Director Robyn Thorson of the Interior Department’s Fish and Wildlife Service, Pacific Region 1.

 “Today's agreement shows that natural resource trustees' obligation to restore injured resources and compensate for lost use can be met by innovative approaches like the restoration credits approach used here,” said Lois Schiffer, General Counsel of NOAA.  “NOAA is pleased that the Bluefield Holdings’ projects will compensate for the natural resource injuries that occurred from the releases of hazardous substances by responsible parties into the Lower Duwamish River as well as those from Harbor Island and Lockheed West Superfund Sites.  These innovative approaches save money and that assure the public that the right kind of restoration will be implemented for each site on an expedited basis.”  

 The Lower Duwamish Waterway Superfund Site is one of the largest Superfund sites in Washington State and includes the stretch of the Duwamish River that flows into Elliott Bay in Seattle.  Over the years, a number of industrial and municipal operations have polluted the site with hazardous substances.  The natural resource trustees have previously settled with The Boeing Company for natural resource damages related to its polluting activities along the Lower Duwamish Waterway. 

The consent decree, lodged in the U.S. District Court for the Western District of Washington, is subject to a 30-day public comment period and approval by the federal court.  A copy of the consent decree is available on the Justice Department Web site at www.justice.gov/enrd/Consent_Decrees.html.

Worked With Others to Seek More Than $700,000 in Fraudulent Refunds

Two Maryland residents were sentenced today for their involvement in a far-reaching stolen identity refund fraud scheme in which they worked with others to seek over $700,000 in income tax refunds through the filing of fraudulent federal income tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, U.S. Attorney Channing D. Phillips of the District of Columbia, Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Inspector in Charge Terrence P. Mckeown of the U.S. Postal Inspection Service, Washington Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.

Wayne Gardner, 50, of Capitol Heights, Maryland, and Michael Whittaker, 32, of Cumberland, Maryland, are among approximately 20 participants in this scheme who have pleaded guilty to charges in the U.S. District Court for the District of Columbia.  According to court documents, the overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million. The two men pleaded guilty on Jan. 20, to one count each of conspiracy to commit theft of public money and theft of public money.

U.S. District Judge Ellen S. Huvelle for the District of Columbia sentenced Gardner to serve 16 months in prison, 200 hours of community service and ordered him to pay $158,160 in restitution to the IRS, and sentenced Whittaker to serve 18 months in prison and ordered him to pay $397,090.95 in restitution to the IRS.  The restitution ordered represents the value of the U.S. Treasury checks that were negotiated as a result of their conduct.  Following their prison terms, the men will be placed on three years of supervised release.

According to the government’s evidence, Gardner and Whittaker participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance.  The refunds were sought for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners.  Returns were also filed in the names of, and refunds were issued to, people who were willing participants in the scheme.  The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.

According to documents filed with the court, Gardner and Whittaker obtained the means of identification of third parties, including names and social security numbers and provided them to a co-conspirator for use in the preparation of fraudulent income tax returns.  Whittaker admitted to providing 21 means of identification from August 2010 to May 2012.  He also permitted various residential addresses that he controlled to be used as purported taxpayer addresses for the delivery of tax refund checks and deposited U.S. Treasury checks that were received as part of this scheme into his bank accounts.  Gardner admitted to providing 65 means of identification to a co-conspirator between August and December 2010, and his involvement in the filing of 116 fraudulent tax returns that sought refunds of approximately $299,984.  Whittaker admitted that he was involved in the filing of 135 fraudulent tax returns that sought refunds of approximately $494,902.

The fraudulent tax returns that were filed as part of the scheme included Schedules C or C-EZ that falsely claimed that each “taxpayer” operated a business, such as “barber” or “childcare,” as a sole proprietorship.  The returns falsely stated that the “taxpayer” had gross receipts and two or more dependent children, when, in fact, the “taxpayer” was either a victim of identity theft, was misled into providing his or her identifying information, or was a willing participant in the scheme. 

Two other defendants recently were sentenced for their roles in the conspiracy:

Bernard Rankin, 44, of Glenarden, Maryland, was sentenced to serve 15 months in prison and ordered to perform 100 hours of community service and pay $190,487 in restitution.  He pleaded guilty on Nov. 4, 2015, to conspiracy to defraud the United States with respect to claims.  Rankin admitted permitting the use of his residential address and bank account in the scheme and recruiting another individual to take part as well.

Lakisha Jackson, 40, of District Heights, Maryland, was sentenced to serve six months in a halfway house and ordered to perform 100 hours of community service and pay $175,953 in restitution.  She pleaded guilty on May 3, to one count of conspiracy to commit theft of public money. Jackson admitted that she allowed her residential address to be used in the scheme.

In announcing the sentences, Principal Deputy Assistant Attorney General Ciraolo, U.S. Attorney Phillips, Special Agent in Charge Jankowski, Inspector in Charge Mckeown and Assistant Inspector General Phillips commended those who investigated the case.  They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialists Donna Galindo, Julie Dailey, and Jessica Mundi.  Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender and Thomas F. Koelbl and former Trial Attorney Jessica Moran of the Tax Division, who prosecuted the case.

A federal grand jury sitting in Portland, Oregon returned an indictment, unsealed today, charging three individuals with federal crimes related to hundreds of false federal income tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Billy Williams for the District of Oregon.

Lawrence Collins and Icy Love Martin are charged with conspiring with Mystique Pratcher, who was charged elsewhere, to file at least 160 false federal income tax returns fraudulently claiming more than $680,000 in federal income tax refunds and theft of government funds.  The indictment alleges that from approximately January 2009 through April 2012, Collins provided identities, addresses and bank accounts to Pratcher, which Pratcher used to prepare and file false federal income tax returns.  The indictment further alleges that Collins provided Pratcher with a bank account in Martin’s name, to which Pratcher directed more than $20,000 in fraudulent refunds.

The indictment further charges Collins, Martin and Nigeria Crawford with conspiring to file at least 35 false federal income tax returns that fraudulently claimed more than $259,000 in federal income tax refunds.  The indictment alleges that from approximately January 2012 through April 2014, Crawford prepared and filed false federal individual income tax returns using identities, addresses and bank accounts obtained through Collins.  The indictment further alleges that Crawford directed more than $30,000 in fraudulently obtained tax refunds into Martin’s bank accounts and at least $32,000 in fraudulently obtained tax refunds to stored-value debit cards in Crawford’s name.  

Martin also is charged with two additional counts of theft of government funds.  Crawford also is charged with 14 counts of filing false, fictitious, or fraudulent claims, 14 counts of wire fraud, and four counts of aggravated identity theft arising out of the scheme, as well as two counts of theft of government funds for receiving $15,642 in Supplemental Nutrition Assistance Program benefits and $7,681 in Temporary Assistance for Needy Families benefits.  The indictment alleges that, in applying for these benefits, Crawford failed to disclose wages and her receipt of fraudulently obtained individual income tax refunds.

If convicted, Collins, Martin and Crawford each face a statutory maximum sentence of 10 years in prison for each count of conspiracy to defraud the government, five years in prison for each count of filing false claims, 10 years in prison for each count of theft of government funds, 20 years in prison for each count of wire fraud and a mandatory consecutive sentence of two years for each count of aggravated identity theft.  In addition, each defendant faces terms of supervised release and monetary penalties.

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

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Billy Williams thanked special agents of the Internal Revenue Service-Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorney Leslie A. Goemaat and Assistant U.S. Attorney Quinn P. Harrington, who are prosecuting the case.

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

Assistant Attorney General John C. Cruden for the Environment and Natural Resources Division made the following statement regarding President Obama’s Presidential Memorandum on Climate Change and National Security.  The memorandum announced today establishes a policy that the impacts of climate change must be considered in the development of national security-related doctrine, policies, and plans: 

“Climate change presents real and in some cases imminent consequences for our nation’s environment and natural resources, but it will also gravely impact the entire world, our weather systems, the frequency of natural disasters and infectious disease, the viability of our coastal cities and the sustainability of our food, water resources and wildlife.  It is nothing short of a threat to national security, world order and the rule of law.  We must meet this threat to the planet we all share with courageous and far-sighted action.”

The Departments of Justice and the Interior joined with the state of Montana today to announce a proposed settlement with ExxonMobil Pipeline Company to resolve claims stemming from the July 2011 oil spill into the Yellowstone River.

ExxonMobil Pipeline Company has agreed to pay $12 million in natural resource damages to the federal government and the state of Montana as trustees for the natural resources injured by the spill.  A proposed consent decree was filed in federal court today.  The state and federal government have also issued a draft restoration plan which sets forth proposed actions to restore the river and wildlife habitat, and improve public lands and recreational resources.

 “This proposed settlement will restore this great natural resource for the people and the environment of Montana and its benefits will flow for generations to come,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “This agreement will require Exxon Mobil Pipeline Company to make this river – upon which both people and wildlife depend for enjoyment and sustenance – whole again.” 

“This settlement is an important part of the work being done to ensure that the 2.7 million miles of oil, gas and liquid chemical pipeline in this country remain safe and that when incidents occur, the operators assume responsibility for cleanup,” said U.S. Attorney Mike Cotter for the District of Montana.  “This settlement was the product of significant collaborative work by federal and state negotiators over a number of years and sends a strong message to operators in this field that they must assume the costs and risks, as well as reaping the benefits, of extracting natural resources.”

“Montanans deserve and expect ExxonMobil Pipeline Company to be held accountable for the damages they caused to Montana’s Yellowstone River, our communities and our economy,” said Governor Steve Bullock for the state of Montana.  “This proposed settlement goes a long way in protecting Montana’s Yellowstone River, one of the last, great, free-flowing rivers in the United States that plays a vital role in our strong $6 billion outdoor economy.”

“This settlement was reached through the efforts of the Montana Department of Justice’s Natural Resource Damage Program and the U.S. Departments of Justice and the Interior,” said Attorney General Tim Fox for the state of Montana.  “Under a joint State-Federal restoration plan, also issued today for public comment, these funds will be used to restore and improve the environmental and recreational resources of this great river.”

The state and federal government are seeking public comment on both the proposed consent decree and the draft restoration plan.

On July 1, 2011, a 12-inch diameter Silvertip pipeline owned by ExxonMobil Pipeline Company ruptured near Laurel, Montana, resulting in the discharge of crude oil into the Yellowstone River and floodplain.  The discharge is estimated to have been approximately 63,000 gallons (about 1,500 barrels) of oil.  The discharge occurred during a high-flow event, affecting approximately 85 river miles and associated floodplain.  Oil from the spill, along with the cleanup activities, harmed natural resources including fish and other aquatic life, birds (including migratory birds), wildlife, large woody debris piles, aquatic habitat, terrestrial habitat, recreational use and the services provided by these natural resources.  These public natural resources are under Trusteeship of the state of Montana and the U.S. Department of the Interior under the Oil Pollution Act and other laws.

The primary goal of the Oil Pollution Act is to make the environment and public whole for injuries to natural resources and services resulting from a discharge of oil or other hazardous substances to the environment.  In the restoration plan, the trustees have presented an evaluation of injuries to the natural resources, restoration alternatives and projects that benefit the same or similar resources injured by the oil spill.  

Projects include:

• Acquiring terrestrial/riparian bottomland to conserve and restore terrestrial habitat with some acquisitions focusing on habitat requirements for injured birds;
• Acquiring and restoring terrestrial/riparian habitat;
• Controlling invasive woody species on state and federal lands;
• Acquiring channel migration or other easements or fee title land acquisitions to provide areas for large woody debris recruitment;
• Removing flanked riprap from the river;
• Removing side channel blockages;
• Providing fish passage around fish barriers;
• Restoring and stabilizing river banks using soft bank restoration techniques;
• Increasing American white pelican production through improvement of breeding and nesting areas;
• Improving city parks and public lands bordering the Yellowstone River;
• Improving urban fishing opportunities adjacent to the Yellowstone River;
• Developing new and preserving existing public access on the Yellowstone River.

The trustees evaluated a range of restoration alternatives that would provide resource services to compensate the public for losses pending natural recovery of resources injured by the oil spill.  The trustees have identified preferred restoration alternatives designed to address the resource injuries.  The trustees plan to work with project partners such as local, state and federal agencies and nonprofit organizations and landowners to implement the projects.

The trustees will host a public meeting to summarize key components of the restoration plan and hear public comment.  The public meeting will be held on Wednesday, Oct. 12, at the Montana Fish, Wildlife and Parks conference room at 2300 Lake Elmo Drive in Billings, Montana, from 6:00 PM to 8:00 PM.  The trustees will review and consider comments received during the public comment period when preparing the final restoration plan.

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

The Justice Department reached a resolution agreement today with Wheaton College in Massachusetts to ensure the college implements a swift and effective response to allegations of sexual assault and harassment involving students. 

In August 2015, after receiving a complaint regarding Wheaton’s handling of a report of sexual assault, the department initiated an investigation and compliance review under Title IX of the Education Amendments of 1972, which prohibits sex discrimination in education programs and activities receiving federal financial assistance.  The department reviewed Wheaton’s handling of sexual assault and harassment complaints over an approximately three and a half-year period, as well as its policies, grievance procedures, training and student education efforts.

The agreement details specific steps Wheaton will take to:

• revise its policies, procedures and investigative practices to provide a grievance process that ensures prompt and equitable resolution of sexual assault and harassment allegations; 
• adequately investigate and respond to allegations of retaliation by students who have alleged sexual harassment or assault;
• take sufficient action to fully eliminate a hostile environment based on sex, prevent its recurrence and remedy its effects; and
• ensure that the individuals designated to coordinate its Title IX efforts receive adequate training and coordinate these efforts effectively. 

“We commend Wheaton College and President Hanno for their cooperation in our review as well as their work to foster a safe and healthy campus environment where all students can achieve their full potential,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “This agreement will protect the civil rights of all students and ensure the college uses a prompt, fair and reliable process for responding to allegations of sexual assault.  We look forward to continuing our collaborative work.”

The prevention of sex-based discrimination is a top priority of the Justice Department’s Civil Rights Division.  Additional information about the Civil Rights Division is available at www.justice.gov/crt. 

FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced Attorney General Loretta E. Lynch’s appointment of MaryBeth Keller to the position of chief immigration judge. In this capacity, Judge Keller is responsible for overseeing the administration of EOIR’s 58 immigration courts across the United States.

“After a very careful selection process, I am pleased to announce EOIR’s next chief immigration judge,” said Director Juan P. Osuna. “Judge Keller’s 28 years of experience at EOIR provide her with an in-depth knowledge of the agency’s history and operations, which will greatly assist her in leading our immigration judge corps during this time of tremendous change, challenge, and opportunity for the Nation’s immigration court system.”

Biographical information follows.

MaryBeth Keller, Chief Immigration Judge

Attorney General Loretta E. Lynch appointed MaryBeth Keller as the chief immigration judge in September 2016. Immediately prior to her current position, and beginning in February 2008, Judge Keller served EOIR as the assistant chief immigration judge (ACIJ) for issues of judge conduct and professionalism. She also supervised courts and served as the agency representative and chief negotiator dealing with the National Association of Immigration Judges employee union. Judge Keller received a Bachelor of Arts degree in 1984 from the Catholic University of America and a Juris Doctor in 1987 from the University of Virginia School of Law. From July 2004 to February 2008, Judge Keller served as general counsel at EOIR. During that time, from July 2006 to February 2008, she served as acting ACIJ for Conduct and Professionalism, and from October 2004 to April 2006, she served as acting chief administrative hearing officer. From 1988 to 2004, Judge Keller served as a senior manager and as an attorney at the Board of Immigration Appeals, EOIR. From 1987 to 1988, she served as a judicial law clerk in the 5th Judicial District of Iowa, in Des Moines, Iowa. Judge Keller is a member of the Iowa State Bar.

The U.S. District Court for the Eastern District of Texas entered a stipulated order for permanent injunction and civil penalty judgment against David J. Devany, former vice president of Commercial Recovery Systems Inc. (CRS), of Plano, Texas, to prevent future deceptive and abusive debt collection practices, the Department of Justice announced today.

“Deceptive debt collection practices are an all too common problem,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We at the Department of Justice will continue to work with the Federal Trade Commission and others to ensure that these practices stop and that those who engage in them are held accountable.”

CRS is a third-party debt collector that primarily collects auto loan and credit card debts on behalf of creditors.  On Jan. 21, 2015, the United States filed a complaint against CRS, its president, Timothy Ford, and its former vice president, Devany.  The complaint alleges that, in numerous instances, collectors at CRS called consumers and falsely claimed to be attorneys or judicial employees.  According to the complaint, collectors also falsely stated that lawsuits had already been filed against consumers and offered to resolve the fictitious lawsuits “out of court.”  They left voicemail messages falsely representing that a failure to return the collector’s call would result in a waiver of rights.  The government alleges that, in some instances, collectors told consumers that their wages, taxes and 401(K) plans would be garnished if they did not pay.  In reality, CRS had neither the intent nor the authority to file lawsuits against the consumers or attempt to have their wages garnished.

Prompted by numerous consumer complaints of deceptive and abusive debt collection practices, the U.S. Federal Trade Commission (FTC) launched an investigation.  The complaint was filed in the U.S. District Court for the Eastern District of Texas at the request of the FTC and alleges violation of the Federal Trade Commission Act and the Fair Debt Collection Practices Act.  The government sought civil monetary penalties and a permanent injunction to prevent the defendants from further engaging in such violations.

In previous rulings, U.S. District Judge Amos L. Mazzant III for the Eastern District of Texas found that CRS had engaged in numerous, widespread violations of the law and entered a permanent injunction against the company and its president, Ford.  U.S. District Judge Mazzant further found Ford liable for civil penalties, to be determined by the court in a later proceeding. 

On Sept. 9, the United States and Devany filed a proposed stipulated order for permanent injunction and civil penalty judgment, by which they agreed to resolve the litigation as between those two parties.  The stipulated order, entered by the district court, permanently bans Devany from engaging in debt collection and other related activities.  It assesses a partially suspended judgment in the amount of $496,000, which approximates Devany’s earnings from 2011 to 2014, during which Devany served as vice-president and numerous violations took place.  The stipulated order also assesses an immediate civil penalty payment of $10,000, which is based upon Devany’s current ability to pay.  The partial suspension of judgment is to remain in effect as long as Devany abides by the all requirements of the stipulated order. 

The government is represented by Trial Attorney Heide L. Herrmann of the Civil Division’s Consumer Protection Branch, with the assistance of Attorneys Anne D. LeJeune and Reid A. Tepfer of the FTC’s Southwest Region.

A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.

Defendant to Pay Full Restitution to IRS and Civil Penalty of More Than $850,000

A Weston, Connecticut man, who used a Panamanian bank account to conceal over $1.5 million in income from the sale of duty-free alcohol and tobacco products pleaded guilty today to one count of conspiring to conceal assets and income from 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 Paul J. Fishman for the District of New Jersey.       

Saul Hyatt, 53, pleaded guilty today before U.S. District Judge Freda L. Wolfson of the District of New Jersey to an Information charging him with conspiracy to conceal assets in an undeclared bank account held in Panama for his benefit.  According to documents filed with the court, Hyatt conspired with another individual in the United States and others to conceal his assets and income derived from the sale of duty-free alcohol and tobacco products.  To execute the scheme, Hyatt used a registered Panamanian corporation, Centennial Group, to buy and sell the duty-free products.  The alcohol shipped through a customs-bonded warehouse in the Foreign Trade Zone in Fort Lauderdale, Florida.  The tobacco products, Chinese-brand cigarettes sold under the names “Chung Hwa” and “Double Happiness,” passed through a customs-bonded warehouse in North Bergen, New Jersey.  From 2006 to 2012, Hyatt directed that $1,627,832 in profits from the sale of duty-free alcohol and tobacco products be wired to his undeclared bank account in Panama.  Hyatt repatriated money from the Panamanian bank account to buy a Mercedes Benz SL 550R automobile and to pay for $19,000 in interior design goods and services. 

U.S. persons are required to report to the IRS on Schedule B of a U.S. Individual Income Tax Return any financial interest in, or signature authority over, a financial account in a foreign country by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained.  U.S. persons also must report all income earned from foreign financial accounts and, if the accounts have an aggregate value of more than $10,000 at any time during the calendar year, file with the Department of the Treasury a Report of Foreign Bank and Financial Accounts (FBAR).

Hyatt failed to report income earned on his Panamanian account, and failed to file an FBAR for the years at issue.  Hyatt admitted that this scheme resulted in a tax loss of $521,986.

“The Department continues to vigorously pursue and prosecute those who conceal their assets and income in offshore accounts in an effort to evade paying their fair share of taxes,” said Principal Deputy Assistant Attorney General Ciraolo. “Nearly eight years after the IRS announced its first offshore voluntary disclosure program, individuals who fail to disclose their interests in foreign accounts and report income earned on these accounts should be well aware that there are significant consequences for this criminal conduct.” 

“The Panamanian banking system should not be a haven to hide profits made from United States businesses,” said U.S. Attorney Fishman.  “When American taxpayers use foreign bank accounts to hide their assets, we will investigate and prosecute them to the fullest extent of the law.”

“Concealing income and assets offshore is not tax planning,” said Special Agent in Charge Jonathan D. Larsen of IRS-Criminal Investigation, Newark Field Office.  “Plain and simple, this is international tax fraud. The facts in this case are clear.  Mr. Hyatt earned income through the sale of duty-free alcohol and tobacco products and intentionally had over $1.6 million of profits wired into an undeclared offshore bank account in Panama.  Today’s plea shows how determined we are at the IRS and Department of Justice in uncovering this type of international tax fraud and putting a stop to it.”

Judge Wolfson set sentencing for Jan. 6, 2017.  Hyatt faces a statutory maximum sentence of five years in prison, as well as a term of supervised release and monetary penalties. Hyatt has agreed to file true and accurate tax returns and to pay the IRS all taxes and penalties owed, in addition to paying an $854,465.50 penalty for failure to disclose his foreign accounts.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Fishman commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Joseph Mack and Tax Division Trial Attorney Michael C. Vasiliadis, who are prosecuting the case.  

More Than 100 Charged in Wide-Spread Auto Parts Investigation

A federal grand jury in the U.S. District Court for the Eastern District of Michigan returned an indictment charging one current automotive parts industry executive and one former automotive parts industry executive with conspiring to obstruct a federal investigation.  The current executive also was charged with attempted obstruction of justice, the Justice Department announced today.

The indictment, filed today in Detroit, charges Futoshi Higashida and Mikio Katsumaru with conspiring to obstruct a federal investigation.  Higashida is also charged with attempted obstruction of justice.  During the charged conspiracy, Katsumaru was employed by an automotive parts company in Japan, and Higashida worked there and in Novi, Michigan, as president of that company’s U.S. joint venture with another company.

According to the indictment, the defendants, along with their co-conspirators, conspired from at least as early as June 2008 until at least September 2012 to delete emails and electronic records and to destroy documents referring to communications with competitors.  In addition, according to the indictment, Higashida instructed another individual on or about September 25, 2012, to ensure that no phone numbers or call records remained on his cellular telephone and that no data remained on his computer that would reflect competitor communications.  The charges contained in the indictment are allegations and not evidence of guilt.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

“Individuals will not escape prosecution by covering up or destroying evidence of their own or their company’s wrong-doing,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division.  “Obstructing a federal antitrust investigation – criminal or civil – is a serious criminal violation that the Antitrust Division will vigorously pursue.”

“Federal investigations are serious matters, and we will pursue any individuals who are involved in destroying evidence to keep it from the FBI,” said Howard S. Marshall, Special Agent in Charge of the Louisville office of the FBI.  “The FBI is committed to aggressively investigating companies and individuals who engage in criminal conduct that corrupts the global marketplace.  We will continue our work with the Department of Justice’s Antitrust Division to uncover schemes aimed at creating an unfair competitive advantage by way of price fixing, bid rigging or other illegal means."

A total of 65 individuals and 46 companies have been charged in the Antitrust Division’s investigations into the automotive parts industry.  This indictment was brought by the Antitrust Division’s Chicago Office and the FBI’s Louisville Field Office, Covington Resident Agency, with the assistance of the FBI’s International Corruption Unit and the U.S. Attorney’s Offices for the Eastern District of Michigan and the Eastern District of Kentucky.  Anyone with information about anticompetitive conduct in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or contact the FBI’s Louisville Field Office at 502-263-6000.

Higashida Indictment

A Nashville, Tennessee, resident and a LaVergne, Tennessee, resident pleaded guilty in separate cases this week to assisting in the preparation of false tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney David Rivera for the Middle District of Tennessee. 

According to documents filed with the court, Tracey Brown, 48, of Nashville, operated a tax return preparation business, Total Tax Services, from her residence.  Brown admitted that from at least January 2006 through December 2010, she routinely filed false tax returns on behalf of her clients in order to increase their refunds, without her clients’ knowledge or permission.  She further admitted that on these false returns she claimed a variety of false items, such as false medical expenses, charitable contributions and business losses, with an intended tax loss of approximately $443,605. 

According to court documents, Michelle Theus, 42, of LaVergne, was a tax return preparer operating under the name Cole Tax Services in LaVergne.  Theus admitted that from 2009 through 2012 she filed false tax returns on behalf of her clients for the 2008 through 2011 tax years.  Unbeknownst to her clients, Theus routinely reported false items on the tax returns she prepared, such as false dependents and false education and childcare credits, in order to increase her clients’ refunds.  Theus further admitted that often she would prepare and provide the client with an accurate return and then prepare and file a false tax return in the client’s name that claimed an inflated refund.  In most cases, Theus directed the Internal Revenue Service (IRS) to split the fraudulently-inflated refunds into separate bank accounts, having the portion expected by the client deposited into the clients’ bank accounts and having the inflated portion of the refund deposited into one of her or her family members’ accounts.  Theus took steps to conceal her wrongdoing from the IRS and her clients by not signing the tax returns she prepared, which gave the IRS the impression that the clients prepared the tax returns themselves and by listing her and her family members’ addresses on the tax returns to divert correspondence from the IRS away from the clients.  Theus admitted that she prepared approximately 206 tax returns for her clients and that the intended tax loss for these returns is approximately $450,959.

In addition to preparing false tax returns for her clients, Theus admitted that she prepared and filed false 2009 and 2010 income tax returns for herself that substantially underreported the income she earned from her tax preparation business.  Theus failed to report more than $95,000 in income for 2009 and 2010, which resulted in additional tax loss of $37,275.

Brown is scheduled to be sentenced on Dec. 21 and Theus is scheduled to be sentenced on Jan. 11, 2017.  They each face a statutory maximum sentence of three years in prison, as well as a term of supervised release and monetary penalties.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rivera commended special agents of IRS-Criminal Investigation, who conducted the investigations and Assistant U.S. Attorneys Tom Jaworski and S. Carran Daughtrey and Trial Attorneys Alexander Effendi and Nathan Brooks of the Tax Division, who are prosecuting these cases.

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

The Department of Justice today announced awards totaling over $4 million to 13 state and local jurisdictions to help them use evidence-based principles and practices to rehabilitate and ultimately reduce recidivism among military veterans.

The awards, funded under the Bureau of Justice Assistance’s 2016 Adult Drug Court Discretionary Grant Program, provide government court systems with financial and technical assistance to develop and implement Veterans Treatment Courts that tailor substance abuse treatment, mandatory drug testing, sanctions and incentives, and other transitional services for military veterans who are substance abusers.  One in six veterans who served in either Operation Enduring Freedom or Operation Iraqi Freedom suffer from substance abuse, according to the nonprofit Justice for Vets.

“Our military veterans often risk life and limb for their country,” said Principal Deputy Associate Attorney General Bill Baer.  “We owe our very best to help those who struggle with substance abuse get back on their feet, stay sober and successfully and productively integrate into civilian life.”

Veterans Treatment Courts enable participants’ likelihood of successful rehabilitation through early, continuous and intense judicially-supervised treatment.  Veterans Treatment Courts also serve as a “one-stop-shop” to link veterans with services, benefits and program providers, including the Department of Veterans Affairs, Veterans Service Organizations and volunteer veteran mentors.

Today’s awardees include: Kansas 10th Judicial District Court ($314,494); the 14th Judicial District Attorney’s Office in Louisiana ($350,000); Roseau County ($305,501) and Anoka County ($300,000), both in Minnesota; Miami-Dade County, Florida ($350,000); City of Norfolk, Virginia, Community Service Board ($300,000); the Judiciary Courts of the State of Montana ($300,000); Missouri 22nd Judicial Circuit, St. Louis City Drug Court ($300,000); the Riverside, California, County Probation Department ($300,000) and the Superior Court of California, County of Solano ($296,875); Denton County, Texas ($299,732); La Crosse, Wisconsin, Area Veterans Court ($300,000); and the Administrative Office of Pennsylvania Courts ($300,000).

An additional $144,499 was provided to the National Institute of Corrections to supplement a project to develop, pilot and evaluate a risk assessment tool for justice-involved veterans. 

Vu Johnnie Nguyen of Virginia Beach, Virginia, pleaded guilty today in U.S. District Court in Asheville, North Carolina, to federal charges for unlawfully trafficking in American black bear gall bladders and other American black bear parts, the Justice Department announced.  The conviction arose from a year-long investigation into Nguyen’s unlawful purchase, sale and transportation of American black bear parts from the Western District of North Carolina.  Bear gall bladders and paws are often used in Asian traditional medicine markets.

“The American Black Bear is a beautiful sight to behold by hikers and campers in the Blue Ridge Mountains and elsewhere in North America, and we will not allow their parts, such as gall bladders, to be taken and sold,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division.  “Black bears are a protected species under both U.S. and North Carolina laws and we will prosecute those who attempt to deal illegally in their parts."

“Nguyen repeatedly engaged in the illegal trafficking of American black bear gall bladders and other parts, a crime that is both reprehensible and a violation of federal and state laws,” said U.S. Attorney for the Western District of North Carolina Jill Westmoreland Rose. “The abundance of American black bears in western North Carolina mountains often attracts the attention of traffickers looking for a steady source of supply of bear parts to satisfy the ever growing demand in domestic and foreign black markets.  Nguyen’s prosecution speaks to our commitment to protect our wildlife resources and to apply stringent punishment to those who ignore the law for profit.”

“When we think of the victims of wildlife trafficking, it’s elephants and rhinos in Africa, tigers in India and parrots in South America that usually come to mind; but there are many animals and plants here in the United States that are also repeatedly subjected to poaching for illegal international trade, including black bear,” said U.S. Fish and Wildlife Service Director Dan Ashe.  “This case shows our continued commitment to bringing criminals who deprive our children of the chance to see these magnificent creatures to justice.”

Nguyen entered his guilty plea before U.S. District Court Judge Dennis Howell for the Western District of North Carolina —specifically, a felony charge under the Lacey Act.  The Lacey Act is the federal law that makes it illegal to transport or sell wildlife taken, possessed, transported or sold in violation of state law.  Animal parts, like American black bear gall bladders, paws, claws and meat are considered wildlife under both the Lacey Act and North Carolina law and under North Carolina law, it is illegal for anyone to possess for sale or buy any bear or bear parts.

According to the documents filed with the court, Nguyen illegally engaged in conduct that involved the sale and purchase and intent to sell 18 American black bear gall bladders, 16 American black bear claws, two American black bear paws and approximately 50 pounds of American black bear meat in 2014.  Nguyen further admitted that on three separate occasions—Jan. 6, 2014, March 5, 2014, and Dec. 17, 2014—he knowingly transported or caused to be transported American black bear parts when he knew that they were sold in violation of North Carolina law.

Nguyen faces a maximum sentence of five years in prison and a $250,000 fine.  As part of the agreement, he has agreed to publish a statement apologizing for his illegal conduct.

The case is prosecuted by the Justice Department’s Environmental Crimes Section Trial Attorney Shennie Patel and the U.S. Attorney’s Office for the Western District of North Carolina in Asheville.  The case was investigated by the U. S. Fish and Wildlife Service’s Office of Law Enforcement and the North Carolina Wildlife Resources Commission Division of Law Enforcement. 

          Alicia A.G. Limtiaco, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to be speak at the Association of Government (AGA) 8th Biennial Guam Professional Development Conference held on September 12-14, 2016, at the Westin Resort Guam.  The theme of the conference was “Tools, Trends, and Techniques in Today’s Financial Environment.”

          U.S. Attorney Limtiaco’s presentation was on Cybersecurity Awareness.  U.S. Attorney Limtiaco shared that cybersecurity is a top priority for the U.S. Government and that securing the nation’s networks and information from exploitation and damage requires improved information-sharing and enhanced coordination between the private and public sectors.  To that end, the U.S. Department of Justice (DOJ) meets with companies like those in attendance at the conference to discuss the potential cybersecurity threats they face and what DOJ and its federal partners can do to help defend, respond, enforce, prevent and protect our community and our country.  U.S. Attorney Limtiaco also discussed cybercrimes such as identity theft and other online fraud schemes and the importance of protecting one’s privacy on social media.

          The training was attended by over 130 participants from Guam and our neighboring islands of Saipan, Northern Mariana Islands, Pohnpei, Federated States of Micronesia, the Republic of Palau and the Republic of the Marshall Islands.  

Chairman of the Board and Senior Vice President of Reimbursement Analysis to Pay an Additional $1.5 Million

North American Health Care Inc. (NAHC), its chairman of the board, John Sorenson, and its senior vice president of Reimbursement Analysis, Margaret Gelvezon, have agreed to pay a total of $30 million to resolve allegations that they violated the False Claims Act by causing the submission of false claims to government health care programs for medically unnecessary rehabilitation therapy services provided to residents at NAHC’s skilled nursing facilities (SNFs), the Department of Justice announced today.  Under the settlement agreement, NAHC has agreed to pay $28.5 million. Mr. Sorensen has agreed to pay $1 million and Ms. Gelvezon has agreed to pay $500,000. 

“Medicare patients and those insured by TRICARE are entitled to receive care necessary for their clinical needs and not the financial needs of their health providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Health care providers will be held accountable if they bill for unnecessary services or treatment.”    

NAHC is a private, for-profit company headquartered in Orange County, California, that has service agreements to operate 35 SNFs, most of them in California.  The SNFs provide inpatient rehabilitation services, including physical, occupational, and speech therapy, to patients.  The United States contends that NAHC caused false claims to be submitted to Medicare and TRICARE, seeking payment for medically unnecessary rehabilitation therapy services provided to residents at the NAHC facilities.  

The United States further contends that Gelvezon, in her capacity as an officer of NAHC, contributed to this conduct by creating the improper billing scheme.  The government also contends that Sorensen, in his capacity as chairman of the board of NAHC, reinforced this scheme at the NAHC facilities.  The United States contends that this conduct occurred during the period from Jan. 21, 2005, to Oct. 31, 2009, for all of the NAHC SNFs and continued during the period of Nov. 1, 2009, to Dec. 3, 2011, for three of the SNFs in the Northern District of California area. 

“This office is committed to safeguarding the federal health care programs and the patients who are enrolled in them,” said U.S. Attorney Brian J. Stretch for the Northern District of California.  “Skilled nursing facilities such as NAHC treat some of the most vulnerable patients in the health care system.  These facilities, and the individuals who run them, will be held accountable when they provide treatment based on financial motivations instead of the patients’ needs.”       

 “Providing medically unnecessary services to this fragile population can be taxing both for the patient and the program,” said Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Special Agent in Charge Steven Ryan.  “Today’s settlement should send a message to others who may be engaging in these schemes that we will pursue justice for our beneficiaries and the programs.”

As part of this settlement, NAHC has also entered into a five-year Corporate Integrity Agreement (CIA) with the HHS-OIG.  The CIA applies to all facilities managed by NAHC and requires an independent review organization to annually review therapy services billed to Medicare.

This 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 $30.6 billion through False Claims Act cases, with more than $18.5 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 Northern District of California, HHS-OIG and the FBI.     

The claims resolved by the settlements are allegations only and there has been no determination of liability.   

Defendant Deceived Investors, Diverted Funds and Dodged Tax Obligations

A Watertown, New York, food and restaurant entrepreneur and franchisor pleaded guilty today to one count of wire fraud and one count of tax evasion announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Richard Hartunian for the Northern District of New York.

According to the criminal information and plea agreement filed with the U.S. District Court in Utica, New York, between 2005 and 2015, Christopher Swartz, 46, engaged in a promissory note scheme to defraud lenders and investors, as well as a scheme to evade taxes and obstruct the Internal Revenue Service (IRS). 

“Mr. Swartz used his business enterprises to steal from lenders, investors, and the United States, hiding behind an elaborate web of entities and financial transactions,” said Principal Deputy Assistant Attorney General Ciraolo.  “This case serves as clear notice that no one is above the law, and those individuals who seek to evade their tax obligations will face prosecution and incarceration, regardless of the complexity of their schemes or economic status.” 

“The defendant’s wide-ranging, persistent, and lengthy fraud and tax evasion schemes cost investors and the IRS millions of dollars,” said U.S. Attorney Hartunian.  “My office is pleased to be part of the efforts by the Tax Division and IRS-Criminal Investigation to hold him accountable for his brazen conduct.”     

“As highly trained and experienced financial investigators, IRS special agents are particularly adept at tracing the flow of funds and uncovering hidden assets,” said Special Agent in Charge Shantelle P. Kitchen of IRS Criminal Investigation, New York Field Office.  “Mr. Swartz’s conviction serves as warning to anyone who schemes to divert money from a business in order to conceal income and evade taxes.”

Swartz, using his multiple interests in various food and restaurant businesses, raised money by fraudulently inducing lenders with the promise of repayment at high interest rates and ownership interests in his companies.  Swartz misappropriated and diverted funds received and when lenders and investors sought the return of their funds, Swartz attempted to lull them with false and fraudulent excuses, assurances, and partial payments, including payments by checks that he knew would bounce.  Swartz also concealed his assets and income to avoid seizure and collection by lenders, investors, and judgment creditors, thereby attempting to prevent recovery of their funds.

As one part of the scheme, in 2009, Swartz used a promissory note and the offer of an equity interest in the Jreck Subs franchise to induce an investor group from New York City to provide $1.5 million in funds, including funds for the construction of new stores and the growth of the chain.  Swartz misappropriated and diverted a substantial portion of the funds.  Swartz then solicited additional loans from this same group, fraudulently inducing them with a series of additional promissory notes, which he failed to honor while misappropriating funds.  Swartz purported to secure some of the notes with fictitious and forged rebate agreements.

Swartz admitted that between 2005 and 2015, he also engaged in a 10-year tax evasion scheme, filing false tax returns that understated his personal income.  Swartz diverted money from business accounts and disguised these diversions in the company records as, among other things, loans and business expenses.  He made extensive use of cash to diminish the traceability of funds and concealed his ownership of various assets using multiple entities and nominees.  Swartz also falsified partnership tax returns and attempted to impede the IRS’s ability to collect employment taxes.

U.S. District Judge David N. Hurd scheduled sentencing for Jan. 19, 2017.  Swartz faces a statutory maximum sentence of 20 years in prison for his conviction on the wire fraud count, and five years in prison on the tax evasion count, as well as a period of supervised release and monetary penalties.  As a condition of the plea agreement, Swartz agreed to an order of restitution payable to any individuals and entities determined to be, at the time of sentencing, victims of his schemes. 

The district court entered a preliminary order of forfeiture of assets, including forfeiture of Swartz’s interests in the Jreck Subs franchisor corporate business, which receives royalty payments from store owners based on a percentage of store sales.  Under current law, if a final forfeiture order is entered, criminally forfeited assets may be used as a source of funds to pay restitution to victims.  According to court documents, the number of victims may be in excess of 130.    

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Hartunian thanked special agents of IRS-Criminal Investigation and the FBI, and an IRS revenue agent, who conducted the investigation, as well as Assistant Chiefs John N. Kane, Jr. and Andrew Kameros, and Trial Attorney Abigail Burger Chingos 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.

The Justice Department filed a proposed consent decree today with 30 Hop restaurant and bar in Coralville, Iowa, resolving claims that the establishment violated the new construction requirements of Title III of the Americans with Disabilities Act (ADA).

The ADA requires newly constructed facilities to comply with the ADA Standards for Accessible Design.  30 Hop, which opened for business in 2014, is a newly constructed multi-story restaurant and bar with a rooftop patio.  The department’s complaint alleges that 30 Hop does not provide an accessible route to the rooftop patio or lower level, has an inaccessible entrance, has no accessible dining tables and has inaccessible bathrooms.

“All newly constructed restaurants and bars must be readily accessible to and usable by individuals with disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “We commend the owners of 30 Hop for cooperating with the Justice Department and for taking swift action to remedy the alleged ADA violations.”

Under the consent decree, which is subject to court approval, the owners of 30 Hop will, among other things, install an elevator between the ground floor and rooftop patio, install a platform lift between the ground floor and the lower level, provide accessible dining surfaces in each area of the restaurant and bar, provide closed risers on the staircase to the rooftop patio, increase the maneuvering clearance at the entrance door, bring the bathrooms into compliance with the ADA requirements for newly constructed facilities, pay a $17,500 civil penalty and pay $3,500 to compensate an individual with a disability who is not able to access the rooftop patio.

The agreement will last for two years.  To learn more about the ADA, call the Justice Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or visit www.ada.gov.

30 Hop Consent Decree

Deputy Attorney General Sally Q. Yates today announced awards totaling more than $10.8 million to assist 162 state, tribal and local government agencies to improve evidence-based substance abuse treatment programs for incarcerated inmates, as well as to prepare justice-involved individuals for reintegration into local communities. The grants were announced during a visit by Deputy Attorney General Yates to a Bureau of Prisons Community Treatment Services Program as part of Prescription Opioid and Heroin Epidemic Awareness Week.

“Cooperation and community partnerships like the ones supported by the Residential Substance Abuse Treatment Program help incarcerated individuals transitioning back to the community receive the support they need to break the cycle of addiction and have the tools they need for successful reentry” said Deputy Attorney General Yates.  “These grants are a critical part of the department’s ongoing work to combat the prescription opioid and heroin epidemic and provide treatment to those in need.”

The grants are funded under the Office of Justice Programs Bureau of Justice Assistance’s Residential Substance Abuse Treatment for State Prisoners Program.  This annual award provides for the development and implementation of treatment programs and aftercare services in correctional and detention facilities in all 50 states, the District of Columbia and five U.S. territories.

“Treating justice-involved individuals for substance abuse must extend beyond incarceration treatment programs to be successful,” said Assistant Attorney General Karol V. Mason. “These grants reward those state, tribal and local agencies that seek to leverage community partnerships and interagency cooperation as well to help these individuals reenter society.”

The program’s framework allows award recipients to implement three types of programs: residential, jail-based and aftercare. Awardees are required to coordinate treatment programs with state correctional professionals and alcohol and drug abuse agencies to receive grant funding. They are also encouraged to partner with community-based organizations to help continue care as justice-involved individuals reenter local communities.

An additional $485,000 was awarded to Advocates for Human Potential, Inc., to provide training and technical assistance in the development and implementation of substance abuse treatment programs.

For a complete monetary and geographical breakdown of the grants awarded under this program, visit https://www.bja.gov/Funding/16RSATAllocations.pdf. 

Attorney General Lynch will Travel to Lexington, Kentucky, as Part of the Justice Department’s Awareness Campaign to Address the Rising Public Health Crisis of Drug Addiction

The Obama Administration has designated the week of Sept. 18-23, 2016, as Prescription Opioid and Heroin Epidemic Awareness Week.  As part of this effort, the Department of Justice is announcing a “week of action” to raise awareness about the rising public health crisis caused by drug overdoses.  Senior Department of Justice officials, members of the President’s Cabinet and other federal agencies will hold events focused on the work being done to address the national prescription opioid and heroin epidemic.

Attorney General Loretta E. Lynch will travel to Lexington, Kentucky, tomorrow, TUESDAY, SEPTEMBER 20, 2016, to hold a youth town hall at a local high school; meet with parents who have lost their children due to overdoses and now work with the Heroin Education Action Team (H.E.A.T.); and deliver a policy speech regarding the actions and resources the Justice Department is bringing to bear on this issue.  

“The heroin and opioid epidemic is one of the most urgent law enforcement and public health challenges facing our country,” said Attorney General Lynch.  “Through Prescription Opioid and Heroin Epidemic Awareness Week, the Department of Justice seeks to raise awareness and prevent new victims from succumbing to addiction; to highlight the department’s ongoing commitment to holding accountable traffickers and others responsible for this epidemic; and to help provide treatment to those grappling with addiction.  To be successful in this important endeavor, we need the help of all our federal, tribal, state and local partners.  In the months ahead, we will continue working to erase this scourge from our communities and to ensure a brighter future for all Americans.”

Prescription Opioid and Heroin Epidemic Awareness Week will reinforce the Justice Department’s three-fold approach to the opioid and heroin epidemic: prevent further tragedies by raising awareness regarding the Opioid and Heroin epidemic; focus on enforcement priorities and highlight best practices; and deploy resources for treatment.  As part of the initiative, over 70 U.S. Attorneys around the country have already committed to doing over 160 different events around the country and over 90 events are planned at Bureau of Prison (BOP) facilities.

As part of the week of action, the Attorney General is expected to announce a new strategy memo directed to the department that focuses on the three-fold prevention, enforcement and treatment approach to combatting the opioid epidemic.  The President issued a proclamation designating Sept. 18-23, 2016, as Prescription Opioid and Heroin Epidemic Awareness Week on Friday, Sept. 16. 

ATTORNEY GENERAL LYNCH HOSTS TOWN HALL AT MADISON CENTRAL HIGH SCHOOL

WHO:           Attorney General Loretta E. Lynch

U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky

WHEN:         TUESDAY, SEPTEMBER 20, 2016

9:15 a.m. EDT

WHERE:       Madison Central High School

Auditorium

705 North 2nd St

Richmond, KY 40475

OPEN PRESS (Camera Preset: 7:30 a.m. EDT for an 8:00 a.m. EDT K9 sweep; Media Access: 8:30 a.m. EDT; Final Access: 9:00 a.m. EDT)

NOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials.  Members of the media must RSVP for the above events to press@usdoj.gov by Monday, Sept. 19, at 5:00 p.m. EDT.  Space is limited and not guaranteed.  Press inquiries regarding logistics should be directed to Rebecca.L.Stewart@usdoj.gov. 

MEDIA AVAILABILITY

WHO:           Attorney General Loretta E. Lynch

U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky

WHEN:         TUESDAY, SEPTEMBER 20, 2016

10:30 a.m. EDT

WHERE:       Madison Central High School

Lecture Lab

705 North 2nd Street

Richmond, KY 40475

OPEN PRESS (Camera Preset: 7:30 a.m. EDT for an 8:00 a.m. EDT K9 sweep; Media Access: 9:30 a.m. EDT; Final Access: 10:00 a.m. EDT)

NOTE: All cameras planning to attend the media availability must be preset in the auditorium prior to the Town Hall as there will be only one K9 sweep.  All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials.  Members of the media must RSVP for the above events to press@usdoj.gov by Monday, Sept. 19, at 5:00 p.m. EDT.  Space is limited and not guaranteed.  Press inquiries regarding logistics should be directed to Rebecca.L.Stewart@usdoj.gov. 

ATTORNEY GENERAL LYNCH DELIVERS REMARKS AT UNIVERSITY OF KENTUCKY

WHO:           Attorney General Loretta E. Lynch

WHEN:         TUESDAY, SEPTEMBER 20, 2016

3:45 p.m. EDT

WHERE:       University of Kentucky

BioPharm Complex

Lecture Hall 124

789 S. Limestone St

Lexington, KY 40508

OPEN PRESS (Camera Preset: 2:00 p.m. EDT for a 2:30 p.m. EDT K9 sweep; Media Access: 3:00 p.m. EDT; Final Access: 3:30 p.m. EDT)

NOTE:  Media parking is available in the UK HealthCare Parking Garage, 140 Transcript Avenue, located south of the Pharmacy Building (789 South Limestone St).  All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials.  Members of the media must RSVP for the above events to press@usdoj.gov by Monday, Sept. 19, at 5:00 p.m. EDT.  Space is limited and not guaranteed.  Press inquiries regarding logistics should be directed to Rebecca.L.Stewart@usdoj.gov.

Senior Administration, DOJ Officials Events for National Prescription Opioid and Heroin Epidemic Awareness Week of Action:

Monday, Sept. 19, 2016

Deputy Attorney General Sally Q. Yates will visit a BOP Community Treatment Services program at the Renaissance Medical Group in Washington, D.C.  The Community Treatment Program is the final stage of BOP’s Residential Drug Abuse Program, as the inmates completing their sentences transition through Residential Reentry Centers.  This visit will highlight BOP’s efforts to provide treatment to inmates with substance abuse issues, particularly prescription and other forms of opioids.

Monday, Sept. 19, 2016

Acting Bureau of Prisons Director Thomas Kane will meet participants in a Residential Drug Abuse Program (RDAP) at the Federal Correctional Institution in Cumberland, Maryland.  This event is in conjunction with other special programming created during the administration’s week of action within the 90 RDAPs around the country to help raise awareness about the severity of heroin and prescription opioid abuse.  Activities will also include presentations by mental health service providers, inmate panel discussions and observing moments of silence during community meetings for lives lost to opioid addiction.

Tuesday, Sept. 20, 2016

Attorney General Lynch will travel to Lexington, Kentucky to hold a student town hall at a high school, meet with H.E.A.T. parents that have lost their children to heroin abuse, and then close the day at the University of Kentucky for a policy speech on how the department is addressing the issue through prevention, enforcement and treatment.

Tuesday, Sept. 20, 2016

Organized Crime Drug Enforcement Task Forces Director Bruce Ohr will travel to New Mexico to hold a meeting with the leaders of three pueblo communities in the Espanola Valley, which has the highest heroin overdose death rate in the country on a per capita basis.  He will also do additional outreach meetings with tribal leaders to discuss DOJ assistance to address the heroin/opioid crisis in Indian Country and best practices for first responders to carry naloxone.

Tuesday, Sept. 20, 2016

Secretary of the Veteran’s Administration Robert McDonald, Principal Associate Attorney General Bill Baer, and Office of National Drug Control Policy Director Michael Botticelli will participate in a roundtable discussion on the administration's efforts to assist our nation's veterans suffering from opioid abuse. 

Wednesday, Sept. 21, 2016

Attorney General Lynch will deliver welcoming remarks prior to a screening of the “Chasing the Dragon” documentary, a film created jointly by the FBI and the Drug Enforcement Administration (DEA).  FBI Director James Comey and DEA Acting Administrator Chuck Rosenberg will also participate in a question and answer session.

Thursday, Sept. 22, 2016
Office of Community Oriented Policing Services (COPS Office) Director Ron Davis will participate in a joint event at the Indiana State Police headquarters to announce grant funding to support law enforcement efforts to combat the distribution and trafficking of heroin, methamphetamine and other harmful opioids.  The COPS Office will also release a new report, “Building Successful Partnerships Between Law Enforcement and Public Health Officials to Address Opioid Abuse” to serve as a resource to better assist law enforcement strategies in addressing the complex challenges posed by opioid overdoses.  

A North Carolina businessman pleaded guilty today to one count of failing to pay over employment taxes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division. 

According to documents filed with the court, Paul Harvey Boone, 54, operated Boone Audio Inc. in Burlington, North Carolina, since 2004.  For much of 2008 through 2011, Boone used Boone Audio to pay thousands of dollars in personal expenditures even though he did not pay over the employment taxes withheld from his employees’ paychecks.  Boone also failed to file personal income tax returns and pay income tax for tax years 2008 through 2011.  

The sentencing hearing is set for Jan. 19, 2017.  Pursuant to the plea agreement, Boone faces a potential statutory maximum sentence of five years in prison, as well as a period of supervised release and monetary penalties.

Principal Deputy Assistant Attorney General Ciraolo commended special agents of Internal Revenue Service’s Criminal Investigation, who investigated the case and Trial Attorneys Lauren Castaldi and Nathan Brooks of the Tax Division, who are prosecuting this case.  Principal Deputy Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the Middle District of North Carolina for their assistance.

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

A former tax return preparer and resident of New Orleans, Louisiana was sentenced today to 36 months in prison, announced Principal Deputy Assistant Attorney General Caroline Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney Kenneth A. Polite for the Eastern District of Louisiana. 

According to court-filed documents, Donald Stewart, 60, previously pleaded guilty to one count of theft of public funds and one count of aggravated identity theft. From approximately 2001 through 2008, Stewart acted as a return preparer under the business names Stewart’s Tax Service and Stewart LTD, before the Internal Revenue Service (IRS) suspended his Electronic Filing Information Number.  From January 2011 through February 2012, Stewart admitted causing federal tax refunds in the names of others to be electronically deposited into bank accounts under his control.  Stewart also admitted to cashing or depositing U.S. Treasury checks made payable to others, which represented federal income tax refunds totaling approximately $539,393, at a bank in the New Orleans area.  In addition, Stewart obtained and used the means of identification of another individual, including their social security number, during and in relation to wire fraud, when he filed a false tax return using another individual’s name and took the resulting refund for himself.

In addition to his prison sentence, Stewart was sentenced to serve one year of supervised release and ordered to pay restitution in the amount of $577,202.97 to the IRS.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Hayden Brockett and Tax Division Trial Attorney Lauren Castaldi, who are prosecuting the case.

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

Alpha Corporation (Alpha) has agreed to plead guilty and to pay a $9 million criminal fine for its role in a price-fixing and bid-rigging conspiracy involving automotive access mechanisms for installation in cars manufactured and sold in the United States and elsewhere, the Justice Department announced today.

According to a one-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Japan-based Alpha conspired from at least as early as 2002 until at least September 2011 to fix prices and rig bids for automotive access mechanisms sold to Nissan Motor Co. Ltd. and certain of its subsidiaries, including Nissan North America Inc.  Access mechanisms consist of inside and outside door handles, tailgate or trunk handles, keys, lock sets (also called key sets), door locks and electrical and mechanical steering column locks.

“Alpha is the 46th corporation to be charged with participating in an anticompetitive scheme involving auto parts,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division.  “The Antitrust Division is committed to uncovering each and every conspiracy to fix prices in the auto parts industry.”

 “Crimes of this nature weaken the integrity of the bidding process and deny consumers the benefit of free and open competition in the marketplace,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.  “The FBI will continue to work with the Antitrust Division to ensure fair bidding practices are employed across all sectors of our economy.”

The Antitrust Division charges that Alpha and its co-conspirator engaged in meetings and conversations to discuss and agree upon the bids and price quotations to be submitted to Nissan for the sale of access mechanisms.  As part of its plea, Alpha has agreed to cooperate in the Division’s ongoing investigation.  The plea agreement is subject to court approval.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI.  Including Alpha, 46 companies and 64 executives have been charged in the division’s investigation and have agreed to pay a total of more than $2.8 billion in criminal fines. 

Alpha is being prosecuted by the Antitrust Division’s New York Office and the FBI’s New York Field Office.  Anyone with information on price fixing, bid rigging or other anticompetitive conduct related to other products in the automotive parts 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’s New York Field Office at 212-384-1000.

Alpha Corporation Information

A Durham, North Carolina, tax return preparer was sentenced today to 12 months and one day in prison for aiding in the preparation of false tax returns, 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. 

According to documents filed with the court, Reyna Nembiu Montes, operated “Su Manu Amiga,” a tax return preparation business in Durham.  Montes admitted that she prepared multiple false individual income tax returns for clients, claiming false dependents in order to generate fraudulent refunds.  She further admitted that she failed to disclose the existence of her tax return preparation business on her personal income tax returns. 

Montes pleaded guilty on June 26.  In addition to serving her prison sentence, Montes was ordered to serve one year of supervised release and to pay restitution in the amount of $115,287 to the Internal Revenue Service (IRS).

Principal Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS-Criminal Investigation, who conducted the investigation and Assistant U.S. Attorney Anand Ramaswamy and Trial Attorney Nathan Brooks of the Tax Division, who prosecuted the case.

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

The Office of Justice Programs’ Bureau of Justice Assistance today awarded grants totaling $5.7 million to create safer neighborhoods through a sustained reduction in gang violence and gun crime.  The awards are funded under the 2016 Violent Gang and Gun Crime Reduction (Project Safe Neighborhoods) Program.  The goal of PSN is to create safer neighborhoods through a sustained reduction in gang violence and gun crime.

The program's effectiveness is based on a cooperative approach and unified strategies led by the local U.S. Attorney, a collaborative PSN task force of federal, state, and local law enforcement, community members, and other key partners.  The partners work to implement gang crime and gun violence enforcement, intervention, and prevention initiatives, using data and research with a local research partner.

"Gang violence and gun crime are two of the most formidable obstacles we face in ensuring that every American lives in safe and secure communities," said Attorney General Loretta E. Lynch. "These vital grants give jurisdictions the resources they need to develop comprehensive, collaborative responses to the most serious and destructive crimes.  By combining more effective enforcement with closer cooperation, better data and expanded prevention initiatives, Project Safe Neighborhoods helps communities make meaningful strides towards ending violence, promoting peace, and restoring hope."

“Although crime rates remain at historically low levels nationally, some communities – and particularly, certain segments of those communities – continue to struggle with gun crimes and gang violence,” said Assistant Attorney General Karol V. Mason. “The funding provided through Project Safe Neighborhoods gives these jurisdictions the resources they need to improve outreach and education, prosecute gun and gang cases, and restore peace to their streets and homes.”

This year’s recipients of approximately $500,000 each include Black Family Development, Inc. of Michigan;  the California Governor’s Office of Emergency Services; the Denver Police Department; City of Brookhaven, Georgia; the Governor’s Office of Crime Control Prevention in Maryland; the Ohio Office of Criminal Justice Services; and Texas’ Safe City Commission.  Awards of approximately $300,000 went to the City of Greensboro, North Carolina; The Justice Education Center, Inc. of Connecticut; the Wisconsin Department of Justice; City of Columbia, South Carolina; and the Indiana Criminal Justice Institute (two awards).  The City of Memphis, Tennessee, the City of Omaha, Nebraska and Louisiana State University each received awards of $150,000. 

Each applicant addressed the required PSN design features in its application: (1) Partnerships; (2) Strategic Planning, Crime Analysis, and Research Integration; (3) Training; (4) Outreach; and (5) Accountability and Data-Driven efforts.

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 bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information about OJP and its components can be found at www.ojp.gov.

          Alicia A.G. Limtiaco, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to be the honorary guest speaker at the 9/11 Memorial Ceremony and 1st National Patriot Day & National Service and Remembrance Day, which was held at the Guam Community College on September 11, 2016, and hosted by the Guam Community College Veterans Club (GCCVC) and AmeriCorps. 

          U.S. Attorney Limtiaco spoke about the events of September 11, 2001 remaining forever engrained and deeply rooted in our memories and in our national consciousness, and honoring the many heroes and paying tribute to the survivors and to the family members of those whose lives were lost.  She spoke about the true patriotism these men and women displayed in the face of unconscionable and horrific violence, death and destruction.

          U.S. Attorney Limtiaco thanked the veterans and service members for their unwavering commitment and service to ensuring our nation’s security and protecting our freedoms, and for  inspiring us to persevere, even in the darkest of times, in our pursuit of freedom and justice for all.

More than $6 Million in Fines and Restitution Imposed

Ten Eastern California real estate investors were sentenced yesterday for their participation in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Eastern California, the Department of Justice announced.

The primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Joaquin County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties.

“These defendants rigged foreclosure auctions to profit at the expense of mortgage holders and homeowners,” said Acting Assistant Attorney General Renata Hesse of the Department of Justice’s Antitrust Division.  “Yesterday’s sentences send a strong message that conspiracies to eliminate competition in any area of our economy will not be tolerated.” 

“My office will continue to fight real estate fraud in all its forms, including bringing to justice those who would subvert public foreclosure auctions for their own personal gain,” said Acting United States Attorney Phillip A. Talbert of the Eastern District of California.

The following individuals were sentenced in the U.S. District Court for the Eastern District of California in Sacramento:

• Anthony B. Ghio, of Stockton, California, was sentenced to serve five months in prison and ordered to pay a $1 million criminal fine and $214,544 in restitution to the victims of the crime.

• John R. Vanzetti, of Stockton, California, was sentenced to serve five months in prison and ordered to pay a $1 million criminal fine and $271,454 in restitution to the victims of the crime. 

• Theodore B. Hutz, of Stockton, California, was sentenced to serve five months in prison and ordered to pay a $250,000 criminal fine and $76,670 in restitution to the victims of the crime. 

• Richard Northcutt, of Stockton, California, was sentenced to serve seven months in prison and ordered to pay a $1 million criminal fine and $614,982 in restitution to the victims of the crime. 

• Kennen A. Swanger, of Alta, California, was sentenced to serve five months in prison and ordered to pay a $5,000 criminal fine.

• Wiley C. Chandler, of Stockton, California, was sentenced to serve seven months in prison and ordered to pay a $500,000 criminal fine and $614,982 in restitution to the victims of the crime.

• Walter Daniel Olmstead, of San Francisco, California, was sentenced to serve eight months in prison and ordered to pay a $29,687 in restitution to the victims of the crime.

• Gregory L. Jackson, of Lodi, California, was sentenced to pay a $150,000 criminal fine and $20,900 in restitution to the victims of the crime. 

• Robert Rose, of Danville, California, was sentenced to pay a $100,000 criminal fine and $24,128 in restitution to the victims of the crime.

• Anthony B. Joachim, of Stockton, California, was sentenced to pay a $175,000 criminal fine and $94,154 in restitution to the victims of the crime.

Two other real estate investors, Andrew B. Katakis and Donald M. Parker, were convicted at trial of bid rigging in March 2014.  

A total of thirteen individuals pleaded guilty or were convicted in the U.S. District Court for the Eastern District of California in connection with this investigation.  The sentences announced yesterday resulted from an ongoing investigation being conducted by the Antitrust Division’s San Francisco office, the U.S. Attorney’s Office for the Eastern District of California, the FBI’s Sacramento Division and the San Joaquin County District Attorney’s Office.  Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-934-5300, visit www.justice.gov/atr/contact/newcase.htm, contact the U.S. Attorney’s Office for the Eastern District of California at 916-554-2700 or contact the FBI’s Sacramento Division at 916-481-9110.

Yesterday’s action was brought in connection with the President’s Financial Fraud Enforcement Task Force.  The president established the task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. 

Regions Bank (Regions) has agreed to pay $52.4 million to the United States to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Department of Justice announced today.  Regions is headquartered in Birmingham, Alabama.                                                         

“Mortgage lenders that participate in the FHA insurance program must follow the requirements intended to safeguard its integrity and to protect homeowners,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will continue to hold responsible lenders that knowingly violate these important requirements.”

“The FHA insurance program plays a critical role in the stability of the housing market,” said U.S. Attorney for the Middle District of Florida A. Lee Bentley III.  “Lender misconduct that puts this program at risk will not be tolerated.”

Since at least January 2006, Regions has participated as a direct endorsement lender (DEL) in the FHA insurance program.  A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance.  If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan.  Under the DEL program, the FHA does not review a loan before it is endorsed for FHA insurance but instead relies on the efforts of the DEL to verify compliance.  DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance.

As part of the settlement announced today, Regions admitted that between Jan. 1, 2006, and Dec. 31, 2011, it certified for FHA insurance certain mortgage loans that did not meet certain HUD underwriting requirements regarding borrower creditworthiness.  In addition, between Jan. 1, 2006 and Dec. 31, 2011, Regions did not maintain a quality control (QC) program that fully complied with the requirements established by HUD.  Regions’ QC Department did not consistently review an adequate sample of FHA-insured loans.  Moreover, to the extent that Regions’ QC Department identified deficiencies during the course of its loan review, Regions engaged in a pattern of “curing” QC findings by obtaining documentation that was not available to the underwriter at the time the loan was approved.  As a result, the defect rate reported to senior management was understated.  Regions also failed to review Early Payment Default (EPD) loans in accordance with HUD guidelines.  Regions was required to review all loans that became 60 days past due within the first six months.  Nevertheless, at certain times prior to 2011, as part of its EPD review, Regions reviewed only those loans that became 90 days past due.

Additionally, Regions did not fully adhere to HUD’s self-reporting requirements.  During the period between Jan. 1, 2006, and Dec. 31, 2011, the HUD Handbook required lenders to report “findings of fraud” or “other serious violations” or “serious material deficiencies” to HUD.  Although Regions’ monthly QC reviews identified numerous FHA-insured loans for that period that contained material deficiencies, Regions did not begin self-reporting these materially deficient loans to HUD until 2011.

As a result of Regions’ conduct and omissions, HUD insured hundreds of loans approved by Regions that were not eligible for FHA mortgage insurance under the DEL program and that HUD would not otherwise have insured.  HUD subsequently incurred substantial losses when it paid insurance claims on those loans.

“FHA-approved lenders have a responsibility to ensure that FHA-insured loans meet our standards, which are in place for the protection of FHA’s insurance fund,” said Helen Kanovsky, HUD’s General Counsel.  “The agreement we announce today should serve as a reminder that sustainable homeownership starts with compliance with underwriting requirements.”

“This settlement resolves allegations that a financial institution, trusted to comply with FHA loan origination, underwriting and quality control requirements, failed to meet its obligations as a participant in the FHA program,” said Inspector General David A. Montoya for HUD.  “The bank’s actions impact the solvency of the FHA insurance fund.  It is through the combined efforts of the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, HUD and the Office of Inspector General that we continue to ensure the integrity of this important FHA program to American homeowners.”

The settlement was the result of a joint investigation conducted by HUD, the HUD Office of Inspector General, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Middle District of Florida.  The claims asserted against Regions are allegations only, and there has been no determination of liability.

The Department of Justice today announced awards totaling more than $13 million to 41 state, local and tribal jurisdictions and courts to help improve drug court programs through evidence-based principles and practices.

The awards, funded under the 2016 Adult Drug Court Discretionary Grant Program, provide government court systems financial and technical assistance to develop and implement programs for substance abuse treatment, mandatory drug testing, sanctions and incentives, and transitional services for substance abusers.

“Adult drug court” is a court program managed by a multidisciplinary team that responds to the offenses and treatment needs of participants who have a drug addiction.

“Drug court is an effective and cost-efficient alternative to incarceration that encourages accountability, promotes rehabilitation, and gives individuals with a history of substance abuse a meaningful second chance at life,” said Attorney General Loretta E. Lynch.  “With these grants, the Department of Justice is deepening its investment in these vital programs, and we are reaffirming our vision of a criminal justice system that is not just an instrument of punishment, but also an agent of positive change.”

Adult Drug Courts enable a participant’s likelihood of successful rehabilitation through early, continuous, and intense judicially-supervised treatment; mandatory periodic drug testing; community supervision; appropriate sanctions and other services.

Additional information about the Drug Court Program is available at http://go.usa.gov/xZHrY.

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 bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information about OJP and its components can be found at www.ojp.gov.

The Department of Justice today announced awards totaling more than $17.5 million to state justice agencies and technical assistance partners to improve public safety and more effectively manage correctional populations and costs.

This year’s awards include $5.85 million to four state agencies (Nebraska, Ohio, Oregon, and South Dakota) and two organizations that will assist these agencies: the Center for Effective Public Policy, Inc., and the University of Cincinnati. The remaining $11.6 million is being awarded to two non-government partner organizations—the Council of State Governments Justice Center and the Crime and Justice Institute—to provide technical assistance to the 20 states currently receiving support with their data analysis, policy development, and implementation efforts.

“Correctional reform is a vital part of our efforts to make our criminal justice system more efficient, more effective, and more fair,” said Attorney General Loretta E. Lynch. “These awards advance that goal by reducing states’ prison populations and encouraging them to use proven strategies in their approach to criminal justice – changes that will not only ease public finances, but also improve public safety.”

The Justice Reinvestment Initiative provides participating states with a means for all three state government branches and other stakeholders to work together and implement results-oriented, data-driven justice systems reform. This funding also enable state leaders, with the input of stakeholders, to examine their states’ unique sentencing and corrections systems, investments and outcomes and make better-informed decisions about treatment, programs and prison/jail resources. Savings from these reforms are reinvested in high-performing public safety strategies. To date, 30 states have used the Justice Reinvestment Initiative to take a comprehensive look at their criminal justice systems.

The site-based awards, funded under the JRI: Maximizing State Reforms Program, supports states that have already adopted justice reinvestment policies to implement one or more strategies to further the goals of a state’s justice reinvestment reform efforts, including the commitment to data-driven decision making and investment in evidence-based practices and programs.

For more information about the Justice Reinvestment Initiative visit http://go.usa.gov/xZsqe.

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 bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information about OJP and its components can be found at www.ojp.gov.

Changes Include New Code of Professional Responsibility for Practice of Forensic Science

The Department of Justice announced new steps today as part of its ongoing commitment to strengthening and advancing forensic science.  The department will implement a number of steps that will promote professional responsibility among forensics practitioners, institute best practices and advance the relationship between the academic research of forensic science and implementation in the field.

“Today’s announcement marks yet another step forward in the department’s efforts to strengthen the practice of forensic science in our nation’s laboratories and courtrooms,” said Deputy Attorney General Sally Q. Yates.  “We are continually looking at ways to ensure that forensic evidence is collected, analyzed and presented in a responsible and scientifically rigorous manner.”

The new policies include adopting a new code of professional responsibility that builds upon existing policies and accreditation requirements for departmental forensic examiners and laboratories. The department believes the code will improve education and guidance on professional responsibility while establishing a process for identifying and addressing violations of professional conduct.

Department forensic laboratories will also review their policies and procedures to ensure that forensic examiners are not using the expressions “reasonable scientific certainty” or “reasonable (forensic discipline) certainty” in their reports or testimony.  Department prosecutors will also abstain from using these expressions when presenting forensic reports or questioning forensic experts in court unless required by a judge or applicable law.  This decision complements the department’s efforts, announced earlier this year, to provide better guidance to forensic examiners and federal prosecutors on how to properly characterize the strength of forensic evidence in the courtroom.

The department also announced policies to implement greater transparency and access to forensic laboratory quality assurance documents and a plan to explore a grant funding of multiyear post-doctoral fellowships at federal, state and local forensic science service providers and forensic medicine service providers.

The new policies arose out of recommendations made by the National Commission of Forensic Science, which was established to advance the field of forensic science and make suggestions to the Attorney General on how to ensure that reliable and scientifically valid evidence is used when solving crimes.  The Attorney General’s decision to implement several of the commission’s recommendations was announced at a meeting of the commission today.  A memo was also sent to all department component heads directing the implementation of the recommendations.  Additional information on the department’s ongoing work to strengthen forensic science can be found at www.justice.gov/forensics.

The Department of Justice, U.S. Environmental Protection Agency (EPA), U.S. Department of Interior and the state of Ohio announced today that Rutgers Organics Corporation (Rutgers) has agreed to complete the cleanup of the Nease Chemical Superfund Site (site) near Salem, Ohio, estimated to cost $18.75 million.  The agreement is memorialized in a consent decree lodged in federal court today in Youngstown, Ohio.  Under the consent decree, Rutgers also agrees to restore injured natural resources at the site and nearby areas, at a cost of approximately $500,000.   Further, Rutgers will reimburse federal and state agencies their past response and assessment costs of about $1 million.     

“Today’s consent decree is a significant milestone in our efforts to make the environment cleaner and safer for the citizens of Salem and to protect and restore our valuable natural resources in that region” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “I want to thank our state partners, as well as recognize the cooperation of defendant Rutgers, for joining us on a path forward to clean up the contaminated Nease Site while preserving undeveloped land and protecting local drinking water sources.”

“This agreement will undo the damage done in the past while preserving creeks and the watershed for future generations,” said U.S. Attorney Carole S. Rendon for the Northern District of Ohio. 

“This settlement will protect human health and the environment in northeast Ohio by reducing the risk of exposure to potentially harmful chemicals,” said U.S. EPA Acting Regional Administrator Robert Kaplan.  “EPA looks forward to working with our federal and state partners to clean up the site and restore the Little Beaver Creek watershed.”

“The U.S. Fish and Wildlife Service is looking forward to continuing the cleanup and restoration of injured natural resources at the Nease Chemical Site,” said Service Deputy Midwest Regional Director Charlie Wooley.  “This settlement enables the Service and other trustees to work together to restore lost resources and protect valuable habitat in the Little Beaver Creek watershed.”

In a complaint filed today simultaneously with the lodging of the consent decree, the federal and state agencies allege that, between 1961 and 1973, portions of the site were owned and operated by a chemical manufacturing plant known as the Nease Chemical Company (Nease Chemical).  Nease Chemical produced specialty products including pesticides such as Mirex, a probable human carcinogen no longer produced in the United States.   Hazardous substances derived from these specialty products were detected in the soil, ground water, sediments and flood plains/wetlands in the area, as well as in the fish in the nearby main surface water body, the Middle Fork Little Beaver Creek.  Rutgers acquired the assets of Nease Chemical, which ceased operations in 1973.  Since 1988, Rutgers has cooperated with EPA to investigate and clean up the site.

Under the consent decree, Rutgers will complete EPA’s Operable Unit 2 remedy at the site by, among other things, capping soil and treating the ponds and ground water.  Rutgers will also complete EPA’s Operable Unit 3 remedy at the site, by, among other things, removing contaminated sediment and floodplain soil and replacing with clean material.  The total cleanup, including long term operations and maintenance, is estimated to cost $18.75 million.

The contamination released from the chemical plant over time has injured natural resources in and around the site, including the underlying groundwater aquifers which have become unusable as a source of potable water.  As part of the settlement, Rutgers will remove a low-head dam, known as the Lisbon Dam on the Middle Fork Little Beaver Creek and restore adjacent streamside habitat.   Those projects, estimated to cost up to $150,000, are expected to help establish a free-flowing stream with a healthy and diverse fish population. 

Rutgers will also fund a $366,000 trust to conserve a variety of lands in the Little Beaver Creek watershed, especially lands that are subject to pressures from new development in the area, to help provide valuable habitat.  The trust will also seek to conserve property to protect local drinking water source areas from further contamination.    

Further, Rutgers will reimburse the federal and state agencies for their past response and assessment costs, totaling approximately $1 million and agrees to fund all future oversight and assessment costs. 

“This settlement will help protect the environment and Ohio families,” said Ohio Attorney General Mike DeWine.  “It requires the cleanup of a long-contaminated site and the restoration and preservation of natural resources.”

“About 280-acres of habitat were contaminated by hazardous substances injuring surface and ground waters at the former Nease Chemical site,” said Ohio EPA Director Craig W. Butler.  “Healthy streams and waterways are critical to Ohio’s citizens and our economy.  This consent decree is a welcome step forward after many years of work to bring the area stream habitats back to healthy, functioning waterways and protecting drinking water resources into the future.“

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

For more information about the Nease Site: https://cumulis.epa.gov/supercpad/cursites/csitinfo.cfm?id=0504619]

A Cranston, Rhode Island, resident pleaded guilty yesterday to aiding and assisting in the preparation of false tax returns, wire fraud, theft of government funds and aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney Peter F. Neronha for the District of Rhode Island.

According to documents filed with the court, Belkis M. Guzman, 48, a tax return preparer who worked at El Centro Multiservicios LLC in Providence, Rhode Island, admitted to preparing false individual income tax returns for clients for tax years 2009 through 2011, which included false dependents, exemptions, tax credits, deductions or expenses.  She also admitted to depositing more than 100 fraudulently obtained U.S. Treasury checks totaling more than $800,700 into her personal bank account, which were generated by the filing of false tax returns prepared by others.  Guzman distributed a portion of these ill-gotten proceeds to others and received a percentage of the negotiated checks as payment for depositing the checks into her account.

U.S. District Judge William E. Smith for the District of Rhode Island scheduled sentencing for Dec. 2.  Guzman faces a statutory maximum sentence of 20 years in prison for the wire fraud count, 10 years in prison for each count of theft of government funds, three years in prison for each count of assisting in the preparation of false tax returns for clients and a mandatory two years in prison for each count of aggravated identity theft, as well as a period of supervised release and monetary penalties.  

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Neronha commended the hard work of special agents of Internal Revenue Service’s Criminal Investigation, who conducted the investigation and Assistant U.S. Attorney Richard Rose and Tax Division Trial Attorney Christopher O’Donnell, who are prosecuting this case.

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

The Justice Department reached a comprehensive settlement agreement today with the California Department of Education (CDE) and the California State Board of Education to improve their compliance monitoring systems and ensure language instruction services to the approximately 1.4 million English Learner (EL) students in the state’s public schools. 

The settlement resolves the department’s May 2015 findings that California’s system for monitoring its public schools’ provision of language services to EL students did not satisfy the state’s obligations under the Equal Educational Opportunities Act (EEOA) of 1974.  The state cooperated fully during the review.

The department concluded that the state had failed to respond appropriately to schools’ certified reports showing that over 20,000 EL students were not receiving instructional language services each school year since 2007 to 2008.  The two-year agreement requires the state to undertake several actions, including:

• respond in a timely and effective manner to credible evidence that schools are failing to serve EL students, including notifying them of violations and providing a protocol by which they must submit to CDE documented evidence that resolves the violations;
• when selecting schools for monitoring reviews, consider their reports of unserved EL students and include charter schools in the selection process for such reviews each year;
• improve CDE’s online monitoring tool and require that schools found to be out of compliance with specific requirements in this online tool receive onsite monitoring if they fail to provide adequate evidence that the noncompliance has been resolved; and
• develop and implement policies and training on the monitoring, review and corrective action processes of CDE’s monitoring of schools for EL service violations, and ensure that all EL monitoring consultants receive such training.

“We applaud the state of California for working cooperatively with the Justice Department to ensure that all English Learner students can access the language services they need to learn,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “We look forward to working with state officials to implement this important agreement and ensure full compliance in the months ahead.”

The agreement addresses many of the legal principles discussed in the United States’ statement of interest filed in July 2014 in a related private EEOA case in state court, D.J. v. State of California.  The state case resulted in a private settlement whose obligations are unaffected by the agreement reached today between the department and the state.

The EEOA requires state and local education agencies to take appropriate action to overcome language barriers that impede students’ equal participation in instructional programs.  Enforcement of the EEOA 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.

California EL Settlement Agreement

The Department of Justice, the Department of the Army and the Department of the Interior issued the following statement regarding Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers:

“We appreciate the District Court’s opinion on the U.S. Army Corps of Engineers’ compliance with the National Historic Preservation Act.  However, important issues raised by the Standing Rock Sioux Tribe and other tribal nations and their members regarding the Dakota Access pipeline specifically, and pipeline-related decision-making generally, remain.  Therefore, the Department of the Army, the Department of Justice, and the Department of the Interior will take the following steps.

The Army will not authorize constructing the Dakota Access pipeline on Corps land bordering or under Lake Oahe until it can determine whether it will need to reconsider any of its previous decisions regarding the Lake Oahe site under the National Environmental Policy Act (NEPA) or other federal laws.  Therefore, construction of the pipeline on Army Corps land bordering or under Lake Oahe will not go forward at this time.  The Army will move expeditiously to make this determination, as everyone involved — including the pipeline company and its workers — deserves a clear and timely resolution.  In the interim, we request that the pipeline company voluntarily pause all construction activity within 20 miles east or west of Lake Oahe.

“Furthermore, this case has highlighted the need for a serious discussion on whether there should be nationwide reform with respect to considering tribes’ views on these types of infrastructure projects.  Therefore, this fall, we will invite tribes to formal, government-to-government consultations on two questions:  (1) within the existing statutory framework, what should the federal government do to better ensure meaningful tribal input into infrastructure-related reviews and decisions and the protection of tribal lands, resources, and treaty rights; and (2) should new legislation be proposed to Congress to alter that statutory framework and promote those goals.

“Finally, we fully support the rights of all Americans to assemble and speak freely.  We urge everyone involved in protest or pipeline activities to adhere to the principles of nonviolence.  Of course, anyone who commits violent or destructive acts may face criminal sanctions from federal, tribal, state, or local authorities.  The Departments of Justice and the Interior will continue to deploy resources to North Dakota to help state, local, and tribal authorities, and the communities they serve, better communicate, defuse tensions, support peaceful protest, and maintain public safety. 

“In recent days, we have seen thousands of demonstrators come together peacefully, with support from scores of sovereign tribal governments, to exercise their First Amendment rights and to voice heartfelt concerns about the environment and historic, sacred sites.  It is now incumbent on all of us to develop a path forward that serves the broadest public interest.”

Defendant convicted of failing to pay over more than $790,000 in payroll taxes 

A Pittsburgh, Pennsylvania, man was convicted today by a federal jury in the U.S. District Court for the Western District of Pennsylvania of 16 counts of failing to collect, 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 evidence presented at trial, between 2004 and 2015, Steven Lynch, a tax attorney, co-owned and operated the Iceoplex at Southpointe, a recreational sports facility located in Washington County, Pennsylvania.  The Iceoplex included a fitness center, ice rink, soccer court, restaurant and bar.  Lynch controlled the finances for these businesses and was responsible for collecting income and employment taxes withheld from employee wages, accounting for these taxes and filing Forms 941, payroll tax returns, and paying these taxes over to the Internal Revenue Service (IRS).  The jury found that between 2012 through 2015, Lynch failed to timely pay over to the IRS more than $790,000 in taxes withheld from the wages of the employees for these businesses. 

“Employers are entrusted with collecting the taxes withheld from their employees’ wages, and they have an absolute legal obligation to pay that money over to the IRS,” said Principal Deputy Assistant Attorney General Ciraolo.  “The conviction of Steven Lynch serves as a strong reminder to all employers that failure to comply with employment tax obligations has significant consequences, including prosecution and incarceration.  The department, together with its partners within the IRS, will continue to vigorously pursue those who violate our nation’s tax laws and threaten the integrity of our tax system.”

“The jury’s verdict is a clear signal that the criminal tax laws of our country are being enforced and upheld for the benefit of all citizens,” said Chief Richard Weber of IRS-Criminal Investigation (CI).  “Those who attempt to skirt the law will be held accountable.”

Sentencing is scheduled for Jan. 11, 2017.  Lynch faces a statutory maximum sentence of up to five years in prison for each count of willfully failing to collect, account for and pay over employment tax, as well as a period of supervised release and monetary penalties. 

Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-CI, who conducted the investigation, and Trial Attorneys Jeffrey Bender and Brittney Campbell of the Tax Division, who prosecuted the case.  Principal Deputy Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office in the Western District of Pennsylvania for their substantial assistance.

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

The U.S. Departments of Justice and Education released today new tools to improve school climates, ensure safety, and support student achievement in our nation's schools.

To the extent a local decision is made to use school resource officers (SROs) in community schools, these resources will help state and local education and law enforcement agencies responsibly incorporate SROs in the learning environment.  Additionally, the departments have highlighted tools available for law enforcement agencies that also apply to campus law enforcement agencies.

“With the release of these vital resources, the Obama Administration is furthering its commitment to ensuring that schools and SROs follow best practices, ensuring a positive and supportive classroom environment,” said Attorney General Loretta E. Lynch.  “By fostering relationships of trust and respect between students and school resource officers, we can continue to build safer schools where our young people can learn and thrive – a vital effort that the Department of Justice will continue to advance with our partners at the federal, state, and local levels in the months to come.”  

“As educators, we are all bound by a sacred trust to protect the well-being, safety, and extraordinary potential of the children, youth and the young adults within the communities we serve,” said U.S. Secretary of Education John B. King Jr.  “School resource officers can be valuable assets in creating a positive school environment and keeping kids safe.  But we must ensure that school discipline is being handled by trained educators, not by law enforcement officers.  At the college level, the President's Task Force on 21st Century Policing has important recommendations that can help campus and local law enforcement both keep students safe and safeguard students' civil rights.”

To assist states, schools and their law enforcement partners in assessing the proper role of SROs and campus law enforcement professionals, both the Justice Department's Office of Community Oriented Policing Services and the Education Department released letters to states and districts emphasizing the importance of well-designed SRO programs and calling on leaders of institutions of higher education to commit to implementing recommendations from the President's Task Force on 21st Century Policing in the campus policing context.

To assist in the K-12 context, the departments also jointly released the Safe, School-based Enforcement through Collaboration, Understanding, and Respect (SECURe) Rubrics.  These new resources can help education and law enforcement agencies that use SROs to review and, if necessary, revise SRO-related policies in alignment with common-sense action steps that can lead to improved school safety and better outcomes for students while safeguarding their civil rights.

Letters:

Campus letter from DOJ

P-12 letter from DOJ

Campus letter from Education

P-12 letter from Education

Rubrics:

State and local policy

Local implementation

The release of these materials builds on the Obama Administration's work with states and districts to improve discipline practices and climate in the nation's schools.  The departments have worked collaboratively to recognize states and districts leading the way on these issues as well as to provide states and districts with effective alternatives to exclusionary discipline practices and continue to call upon a broad array of stakeholders to rethink approaches to school discipline in order to keep kids in school and out of the justice system.  Highlights from the Administration's supportive school discipline efforts include:

Joint Federal Policy and Legal Guidance: Education and Justice jointly released a School Climate and Discipline Guidance Package in 2014 to provide schools with a roadmap to reduce the usage of exclusionary discipline practices and clarify schools' civil rights obligation to not discriminate on the basis of race, color or national origin in the administration of school discipline.

#RethinkDiscipline Convening and Public Awareness Campaign: Education and Justice launched Rethink Discipline at the White House in July of 2015, convening school district teams, including some law enforcement practitioners and justice officials from across the country and sparking a national dialogue around punitive school discipline policies and practices that exclude students from classroom instruction and targeted supports.

Rethink School Discipline: Resource Guide for Superintendent Action: As a part of Rethink Discipline, the Department of Education developed a resource guide with a set of potential action items to help school leaders implement safe, supportive school climate and discipline by engaging stakeholders, assessing the results and history of existing school climate and discipline systems and practices; implementing reform; and monitoring progress.

Support for State and Local Educational Leaders and Partners from Other Systems: In 2015, the Department of Justice launched the National Resource Center for School Justice Partnerships to advance school discipline reform efforts and serve as a dynamic resource hub for schools, law enforcement agencies, and others to support school discipline reform efforts at the local level.

Fostering Safe and Supportive Learning Environments: In 2016, the Department of Education released the ED School Climate Surveys and the Quick Guide on Making School Climate Improvements to help foster and sustain safe and more nurturing environments that are conducive to learning for all students.

Addressing Implicit Bias and Discipline Disparities in Early Childhood Settings: In 2016, the Departments of Education and Health and Human Services recently announced a new investment of $1 million in the Pyramid Equity Projectto establish national models for addressing issues of implicit bias, and uneven implementation of discipline, including expulsions and suspensions, in early learning programs.

Providing Guidance to Schools on Ensuring Equity and Providing Behavioral Supports to Students with Disabilities: In 2016, the Department of Education announced the release of a significant guidance document in the form of a Dear Colleague Letter, which emphasized the requirement that schools provide positive behavioral supports to students with disabilities who need them. It also clarified that the repeated use of disciplinary actions may suggest that many children with disabilities may not be receiving appropriate behavioral interventions and supports. Also included was a Summary for Stakeholders.

The new resources and letters released today build on the work of the My Brother's Keeper Initiative and the Council on Women and Girls, and respond to recommendations put forth by the President's Task Force on 21st Century Policing to support schools in developing more positive school climates and strengthening the relationship between law enforcement and the communities they serve. These efforts help districts, schools, and communities build credible and sustainable systems, structures, and partnerships that provide safe, supportive learning environments that uplift students and nurture them when they do well and when they need support to do better.

Goodman Company L.P. has agreed to pay a $5.55 million civil penalty to settle allegations that it failed to timely inform the Consumer Product Safety Commission (CPSC) of a fire risk posed by certain air conditioning and heating units, many of which were installed in hotels, schools and hospitals, the Department of Justice and the CPSC jointly announced today.  The settlement also resolves allegations that, when Goodman ultimately reported the fire risk to the CPSC, it misrepresented the number of fires that had occurred.  Goodman is a Delaware corporation based in Houston, Texas.

The delay and misrepresentation violated the Consumer Product Safety Act, the government asserted in a complaint filed today in the U.S. District Court for the Southern District of Texas.  To resolve the complaint, Goodman agreed to the $5.55 million civil penalty and other terms of a consent decree, which is subject to judicial approval. 

“Goodman knew of a fire risk but waited roughly two years to inform the CPSC,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Companies must report these safety issues immediately, as the law requires, to protect the public from an unnecessary risk of injury.  The Department of Justice will continue to take enforcement action against companies that do not meet their consumer product safety obligations.”

“Goodman’s conduct was illegal, dangerous and unacceptable,” said CPSC Chairman Elliot F. Kaye.  “Goodman’s decision to hide information about serious fires for years, while continuing to profit from sales, slowed down the announcement of a recall and put the safety of many families at real risk.  CPSC will continue to work closely with the Department of Justice to enforce the law and hold violators accountable.”

The government’s complaint concerns through-the-wall air conditioning and heating products known as packaged terminal air conditioner/heaters, or PTACs.  The United States alleged that Goodman knew in 2008 that certain PTACs it manufactured between January 2007 and April 2008 (Subject PTACs) had improperly-crimped power cords that could pose a fire risk.   

Goodman had been receiving reports about the Subject PTACs catching fire, smoking and overheating.  Among the reports, Goodman learned in May 2011 of a fire at a lodging facility in New York.  At that hotel, the complaint alleged that Goodman replaced the control boards and power cords for over 100 Subject PTACs.  Goodman made similar large-scale replacements in 2013, replacing the power cords and control boards for more than 335 Subject PTACs at seven hotels, following two hotel fires in Indiana and Idaho.  But Goodman did not report the fire risk to the CPSC until Nov. 26, 2013, at least six months after it learned of these fires.

When it ultimately reported to the CPSC, Goodman identified only three reports of overheating.  In fact, by that time, the complaint alleged that Goodman had received scores of additional reports of overheating, including reports of fire, potentially attributable to the Subject PTACs’ power cord.

After reporting to the CPSC, Goodman learned of additional fires involving the Subject PTACs, but failed to timely report six of them to the CPSC, as set forth in the complaint.  At least 10 months passed between when Goodman learned of each of those fires and when the fire was reported to the CPSC.

The consent decree requires Goodman to maintain a compliance program to ensure that the company complies with the Consumer Product Safety Act and to maintain internal controls and procedures designed to ensure timely, truthful, complete, and accurate reporting to the CPSC as required by law.  Goodman is subject to liquidated damages if the company is not in compliance with the consent decree.

In agreeing to settle this matter, Goodman has not admitted that it violated the law.                                                   

The government is represented by Trial Attorney Daniel Zytnick of the Civil Division’s Consumer Protection Branch, with the assistance of Patricia Vieira of the CPSC’s Office of the General Counsel.

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

Attorney General Lynch to hold a 9/11 commemoration event at the Department of Justice and Travel to New York to attend Memorial Services

Attorney General Loretta E. Lynch will lead a moment of silence as part of a commemoration ceremony with Department of Justice employees on FRIDAY, SEPT., 9, at 9:00 a.m. EDT to recognize the 15th anniversary of the 9/11 terrorist attack.  Following the moment of silence, the Attorney General will deliver remarks and dedicate a commemorative plaque for the “Survivor Tree” seedling that was planted in the Department of Justice’s courtyard on the anniversary last year.  

On SATURDAY, SEPT. 10, at 3:00 p.m. EDT, the Attorney General will attend the New York City Fire Department’s (FDNY) 15th Anniversary Memorial Mass at St. Patrick’s Cathedral.  The memorial mass is closed to press but livestreamed on the St. Patrick’s Cathedral website.  On SUNDAY, SEPT. 11, AT 8:46 A.M. EDT Attorney General Lynch will attend the 15th anniversary ceremony at the National September 11 Memorial Plaza, and will tour the 9/11 Memorial Museum.  Attorney General Lynch will then deliver remarks at a memorial service hosted by the First Presbyterian Church of Brooklyn on SUNDAY, SEPT. 11 AT 11:00 A.M. EDT, which she attended as a member during the years she lived in Brooklyn. 

DEPARTMENT OF JUSTICE MOMENT OF SILENCE AND SURVIVOR TREE PLAQUE UNVEILING

WHO:           Attorney General Loretta E. Lynch

Deputy Attorney General Sally Q. Yates,

Principal Deputy Associate Attorney General Bill Baer

FBI Director James Comey

Assistant Attorney General John P. Carlin of the National Security Division

Assistant Attorney General Leslie R. Caldwell of the Criminal Division

WHEN:          FRIDAY, SEPTEMBER 9, 2016

9:00 a.m. EDT

WHERE:       U.S. Department of Justice

Courtyard

950 Pennsylvania Ave., N.W.

Washington, D.C.                                   

OPEN PRESS (Media Gather Time: 7:50 a.m. EDT; Final Access: 8:40 a.m. EDT)

NOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials.  Space is limited and not guaranteed.  Press inquiries regarding logistics should be directed to Rebecca.L.Stewart@usdoj.gov or press@usdoj.gov.   

FDNY 15th ANNIVERSARY MEMORIAL MASS AT ST. PATRICK’S CATHEDRAL

WHEN:         SATURDAY, SEPTEMBER 10, 2016

3:00 p.m. EDT

WHERE:       St. Patrick’s Cathedral

5th Ave and 51st Street

New York, NY 10022                                   

OPEN TO PRINT MEDIA

LIVESTREAMED AT: http://saintpatrickscathedral.org/live.

Note: NYCTV will also provide a livestream for media cameras outside the cathedral.

9/11 COMMEMORATION CEREMONY

WHEN:         SUNDAY, SEPTEMBER 11, 2016

8:46 a.m. EDT

WHERE:       9/11 Memorial Plaza

180 Greenwich Street

New York, NY 10007                             

OPEN TO REGISTERED PRINT MEDIA & BROADCAST POOL CAMERA

LIVESTREAMED AT: www.911memorial.org.

NOTE: Print media should register here.  Space is limited and not guaranteed.  Please note that registration for this event closes today, Thursday, Sept. 8, at 11:30 a.m. EDT.  Press inquiries regarding logistics should be directed to Michael Frazier or Kate Monaghan at press@911memorial.org or (212) 312-8800; or the 9/11 Memorial Media Center.

9/11 MEMORIAL SERVICE AT FIRST PRESBYTERIAN CHURCH OF BROOKLYN

WHO:           Attorney General Loretta E. Lynch

WHEN:         SUNDAY, SEPTEMBER 11, 2016

11:00 a.m. EDT

WHERE:       First Presbyterian Church of Brooklyn

124 Henry Street

Brooklyn, NY 11201

OPEN TO REGISTERED MEDIA (Media Gather Time: 9:30 a.m. EDT; Final Access: 10:30 a.m. EDT)

NOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials.  Members of the media must RSVP to Rebecca.L.Stewart@usdoj.gov and press@usdoj.gov by FRIDAY, SEPTEMBER 9, 2016, at 5:00 p.m. EDT.  Space is limited and not guaranteed.  Press inquiries regarding logistics should be directed to Rebecca.L.Stewart@usdoj.gov or press@usdoj.gov.   

Background on the Survivor Tree:

Hundreds of trees grace the plaza of the 9/11 Memorial, but one is unlike the rest.  It’s a Callery pear tree that once stood on the original World Trade Center Plaza.  The collapse of the Twin Towers on Sept. 11, 2001 nearly destroyed it, but it was nursed back to health, and today it stands strong again at the Memorial, where it is often adorned with tributes from the Memorial’s millions of visitors. It is known around the world as the “Survivor Tree.”

Fruit from the Survivor Tree was harvested in the fall of 2011 by Bartlett Tree Experts.  In the summer of 2013, the students of John Bowne High School in Flushing, Queens, New York, took custody of the seedlings and have continued to care for them.  The project is a learning experience for the students, teaching about the agriculture of the trees and the history of 9/11.

Each year the 9/11 Memorial donates a Survivor Tree Seedling to a community who has overcome tragedy.  These communities represent the spirit of the Survivor Tree and their tree will serve as an inspirational landmark conveying resiliency and hope within the community, just as the Survivor Tree does at the 9/11 Memorial.  In 2015, the 9/11 Memorial graciously donated one of these unique seedlings to DOJ, and today, it continues to flourish in the courtyard of Main Justice.

The United States has filed a False Claims Act case against Vanguard Healthcare LLC, Vanguard Healthcare Services LLC, Boulevard Terrace LLC, Vanguard of Crestview LLC, Glen Oaks LLC, Imperial Gardens Healthcare and Rehabilitation LLC, Vanguard of Memphis LLC, Vanguard of Manchester LLC and Vanguard’s Director of Operations, Mark Miller, the Department of Justice announced today.  The lawsuit alleges that the defendants were responsible for the submission of false claims to Medicare and Medicaid for skilled nursing home services that were either non-existent or grossly substandard.  The lawsuit also alleges that the defendants submitted required nursing facility Pre-Admission forms with forged physician and nurse signatures.  Vanguard Healthcare LLC is headquartered in Brentwood, Tennessee, and has 14 long-term care nursing home providers operating around the United States.

“Our seniors rely on the Medicare and Medicaid programs to help care for them with dignity and respect,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice's Civil Division.  “It is critically important that we confront nursing home operators who put their own economic gain over the needs of their residents.  Operators who bill Medicare and Medicaid while failing to provide essential services will be held accountable.”

The United States’ complaint alleges that between Jan. 1, 2010, and Dec. 31, 2015, the six Vanguard facilities failed to provide the most basic and essential skilled nursing services to their residents.  The lack of adequate care at the Vanguard facilities included chronic staffing and critical medical supplies shortages, failure to provide standard infection control, failure to administer medication to residents as prescribed by their physicians, failure to provide wound care as ordered by physicians, failure to adequately manage residents’ pain and providing unnecessary and excessive psychotropic medications to residents and using unnecessary physical restraints on residents.  As a result, Vanguard residents suffered pressure ulcers, falls, dehydration and malnutrition, among other harms.  The United States’ complaint further alleges that Miller, who served as the Director of Operations for Vanguard from September 2011 through August 2014, knew that resident care at the Vanguard facilities was non-existent or grossly substandard but failed to correct these problems.

The United States’ Complaint also alleges that from September 2012 through April 2014, Boulevard Terrace LLC, Glen Oaks LLC, Vanguard of Memphis LLC and Vanguard of Manchester LLC fraudulently submitted falsified Pre-Admission forms to Tennessee Medicaid.

On May 6, the Vanguard corporate entities named in the government's complaint filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code, which were administratively consolidated in the Middle District of Tennessee.

“We are committed to combating elderly abuse, neglect and financial exploitation,” said U.S. Attorney David Rivera for the Middle District of Tennessee.  “We will continue to hold accountable those who profit from the care of elderly Medicare and Medicaid beneficiaries, including nursing home operators, while providing non-existent or grossly substandard care.”

This case 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 $30.6 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal health care programs.  Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

This matter was investigated by the Commercial Litigation Branch of the Justice

Department’s Civil Division, the U.S. Attorney’s Office for Middle District of Tennessee, the Department of Health and Human Services’ Office of Inspector General, and the Tennessee Attorney General’s Office and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit.  This action is supported by the Elder Justice and Nursing Home Initiative, which coordinates the department’s activities combating elder abuse, neglect and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid and other federal health care programs.  For more information about the Department’s Elder Justice Initiative, see https://www.justice.gov/elderjustice/. 

The claims asserted against the defendants are allegations only and there has been no determination of liability.

The lawsuit is captioned United States vs. Vanguard, et al., CA 3:16 -cv-02380 (M.D.Tenn 2016).

 A Cumberland County, New Jersey, man allegedly connected to and living with an individual involved in a dog fighting conspiracy was arrested today for possessing dogs for the purpose of dog fighting, announced Assistant Attorney General John C. Cruden, head of the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Paul Fishman for the District of New Jersey.

Robert A. Elliott Sr., 47, of Millville, New Jersey, was charged by complaint with two counts of possessing pit bull-type dogs for dog fighting ventures in New Jersey and elsewhere.  He is expected to appear before U.S. District Judge Joel Schneider for the District of New Jersey in Camden, New Jersey, federal court.

According to documents filed in this case and statements made in court: the federal Animal Welfare Act makes it a felony to fight dogs or to possess, train, sell, buy, deliver, receive, or transport dogs intended for use in dog fighting. 

On June 1, Frank Nichols and other individuals were charged by complaint with violations of the federal Animal Welfare Act pertaining to dog fighting.  That day law enforcement officers executed a search warrant of a residence on a multi-acre property in Millville where Nichols lived.   Elliott, also lived at the residence.

During the search of the residence, law enforcement officers seized 13 live pit bull-type dogs.  Seven of the dogs were housed on heavy chains in a wooded area behind the house.  The dogs were spaced so that they could not reach one another.  Two additional dogs were housed individually in pens in the wooded area near the chained dogs.  Law enforcement officers found three more dogs in shipping crates in the unfinished basement.  One of the 13 dogs, who appeared ill, was found in a crate in a room on the first floor.

Several of the dogs had scars and other signs of injury and all of the dogs had untreated veterinary conditions. Law enforcement also found other indications that the dogs were used in dog-fighting ventures, such as:

• Break sticks, which are used to pry open a dog’s mouth in order to release a hold that the dog has on another dog;
• A stand often called a “rape rack,” or “breeder stand” as referred to by defendant Elliott, designed to hold a female dog off the ground and immobilize her while a male dog mounts her.  The device is used where the female dog is too dog-aggressive to mate otherwise;
• A box containing veterinary medications, a skin stapler, numerous needles and syringes, catheters, IV bags and tubing, sutures and suture removing tools;
• Testosterone boosting supplements, which are often used by dog fighters to increase muscle mass and aggression of dogs before a fight;
• Dog pedigrees and printouts of dogs from dog fighting registries, including pedigrees related to the pit bull-type dogs found at his residence.

Elliott claimed ownership of several of the dog fighting paraphernalia found in his home and indicated that he and his family owned 10 of the 13 pit bull-type dogs found at his residence.

The counts of possession of an animal for participation in an animal fighting venture each carry a maximum potential penalty of up to five years in prison.

This case is part of Operation Grand Champion, a coordinated effort across numerous federal judicial districts to combat organized dog fighting.  The phrase “Grand Champion” is used by dog fighters to refer to a dog with more than five dog-fighting “victories.”

Operation Grand Champion is a continuing investigation by the U.S. Department of Agriculture, Office of the Inspector General, under the direction of Special Agent in Charge William G. Squires; Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola; and the FBI, under the direction of Special Agent in Charge Timothy Gallagher, in coordination with the Department of Justice.

The government is represented by the Justice Department’s Environmental Crimes Section Trial Attorneys Ethan Eddy and Shennie Patel and Assistant U.S. Attorneys Jihee Suh and Kathleen O’Leary of the District of New Jersey.

The Humane Society of the Unites States is assisting with the care of the dogs seized by federal law enforcement.

The charges and allegations in the complaint are merely accusations and the defendant is considered innocent unless proven guilty.

The Justice Department reached an agreement today with Cumberland Staffing Inc., doing business as AtWork Cumberland Staffing (ACS), to resolve the department’s investigation into whether the company discriminated against work-authorized immigrants and naturalized U.S. citizens in violation of the Immigration and Nationality Act (INA).  ACS is a temporary staffing agency with an office located in Cookeville, Tennessee.

The department initiated its investigation after a Tennessee resident notified the department of an ACS job posting that included a U.S. birth certificate requirement.  The department’s investigation found that between December 2015 and February 2016, ACS’s Cookeville office created and published a job posting stating that applicants for machine operator positions at a client company must present a U.S. birth certificate, even though there was no legal authorization for such requirement.  The discriminatory posting was published on several job search engine websites during this time period.

The INA’s anti-discrimination provision prohibits employers from discriminating in hiring, recruiting or referring for a fee based on a person’s citizenship, immigration status or national origin.  In the absence of a legal basis to do so (such as a law, regulation or government contract that requires U.S. citizenship restrictions), employers, recruiters and referrers for a fee may not limit job opportunities or otherwise impose barriers to obtaining employment based on an individual’s citizenship, immigration status or national origin.  By requiring a U.S. birth certificate – a document that only non-naturalized U.S. citizens possess – to be considered for an employment opportunity, ACS’s job posting created a discriminatory barrier for work-authorized individuals, such as naturalized U.S. citizens, U.S. nationals, lawful permanent residents, asylees and refugees. 

Under the settlement agreement, ACS will pay a civil penalty, remove all specific document requirements from its job postings except where required by law, train staff on proper employment verification and reverification procedures and ensure that trained staff or legal counsel review future job advertisements.

“Staffing agencies, which are in the business of making employment opportunities available to job seekers, cannot create unlawful and discriminatory employment barriers,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “The department commends ACS for its cooperation during the investigation and its willingness to address the situation.” 

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA.  The statute prohibits, among other things, citizenship, immigration status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices in employment eligibility verification; retaliation; and intimidation.

To learn more about the protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email osccrt@usdoj.gov; or visit OSC’s website at www.justice.gov/crt/about/osc.

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

AtWork Settlement Agreement

The Justice Department announced today that it has terminated its January 2012 settlement agreement with the Mercer County, West Virginia, School District following the district’s successful implementation of programs and services for its English Learner (EL) students, as required by the Equal Educational Opportunities Act (EEOA) of 1974.

After entering into the settlement agreement, the district implemented a process whereby every new student completed a home language survey so that all students with non-English speaking backgrounds were timely identified; had their English proficiency assessed; and if they were not proficient, were provided with individualized English language services and supports.  The district also implemented a new curriculum for the instruction of EL students, improved its teacher training, carefully monitored the academic progress of current and former EL students and enhanced its communications with limited-English proficient families.

As a result of its efforts, the district has successfully integrated dozens of EL students into its student body, enabling them to access the curriculum and develop strong relationships with their teachers and peers.  EL students and their parents have credited the district’s individualized programs and the dedication of EL teachers in furthering the students’ progress.

“We commend the Mercer County School District for successfully implementing the settlement agreement and for showing dedication and care to its English Learner students and their families,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “We hope other rural districts with growing EL populations will learn from Mercer County’s positive example and significant progress.”

The EEOA requires state and local education agencies to take appropriate action to overcome language barriers that impede students’ equal participation in instructional programs.  Enforcement of the EEOA is a top priority of the Civil Rights Division.  Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.

James Powers, 59, of Washington, D.C., pleaded guilty today to violating the Clean Air Act for his role in a scheme to improperly remove asbestos from a historic building in the District of Columbia.

The guilty plea, in the U.S. District Court for the District of Columbia, was announced by Assistant Attorney General John C. Cruden, head of the Justice Department’s Environment and Natural Resources Division, U.S. Attorney Channing D. Phillips of the District of Columbia and Acting Special Agent in Charge Jennifer Lynn of the Environmental Protection Agency’s (EPA) criminal enforcement program in the Mid-Atlantic States. 

Asbestos, a once-popular fireproofing insulation, is now known to cause lung cancer, asbestosis and mesothelioma in people who inhale the fibers released when asbestos is disturbed.  Congress has determined that there is no safe level of exposure to asbestos.  The Clean Air Act requires that renovation in asbestos-containing properties follow specific protocols designed to safely remove asbestos from the property prior to any renovation or demolition activity, so as not to expose workers to the risk of deadly respiratory diseases.

“Our nation’s Clean Air Act requires strict adherence to the practices that protect the public from exposure to asbestos and includes criminal liability for those who do not comply with the law,” said Assistant Attorney General Cruden.  “This prosecution is part of the Justice Department’s continuing commitment to protect the public and workers who are particularly vulnerable to harm from irresponsible, unsafe and illegal practices in the work place.” 

“James Powers put a work crew and the public at risk by not taking the proper steps to safely renovate a building containing asbestos,” said U.S. Attorney Phillips.  “The Clean Air Act specifically establishes standards for the safe handling of this dangerous material.  This prosecution holds this businessman accountable for his recklessness and shows we will enforce laws that protect the health and safety of workers and citizens in the District of Columbia.”

“Exposure to asbestos poses serious risks to public health and our communities, so it’s imperative that it be handled properly and disposed of safely,” said Acting Special Agent in Charge Lynn.  “This case demonstrates EPA and its law enforcement partners will hold accountable those who put the public at risk through unsafe practices.”

The development project at issue involved renovating the historic Friendship House, located at 619 D Street SE in Washington, D.C., into condominiums, a development known as the Maples.  According to a statement of offense submitted as part of the guilty plea, in March 2010, Powers formed a partnership with a local real estate development firm to purchase and renovate the property.  An asbestos survey of the property documented asbestos throughout the property, including in floor tiles, wall board and pipe insulation.

After the survey, the partnership received bids from licensed professional asbestos abatement and renovation firms in the area.  Despite knowing that the building contained asbestos, Powers hired Larry Miller, 58, of Palmetto, Georgia, a general contractor from Atlanta with no training, certification, or experience in asbestos abatement, to conduct interior demolition and renovation of the building.  The written contract with Miller specifically excluded removal of asbestos from the property.  Powers told Miller that the asbestos would be abated by another contractor after Miller’s work and did not fully inform Miller about the extent of asbestos in the property.  Powers represented to his partners that a qualified entity would conduct appropriate asbestos abatement at the property. He emailed them a proposed asbestos abatement contract from a corporation that, unbeknownst to his partners, was simply an alter-ego for Powers.

During the period between August 2011 and October 2011, according to the statement of offense, Miller and his crew of workers conducted interior demolition at the Maples, without any asbestos abatement having occurred as required under the Clean Air Act.  Powers also contracted with a waste disposal company to haul construction debris from the Maples off-site.  Powers failed to inform the waste disposal company that the construction debris contained asbestos and the debris was not taken to a site qualified to receive asbestos waste.

Even after an inspection by local environmental authorities revealed asbestos in the building, Powers had Miller and his crew members proceed with demolition.  Over the course of the project, the workers disturbed substantial quantities of asbestos, exposing themselves to a substantial risk of serious illness later in life.

U.S. District Judge Amy Berman Jackson for the District of Columbia scheduled sentencing for Dec. 16.  The charge carries a statutory maximum of five years in prison and potential financial penalties.

Miller pleaded guilty on Nov. 19, 2015, to one count of negligent endangerment under the Clean Air Act.  He is awaiting sentencing in the U.S. District Court for the District of Columbia.  The charge carries a maximum sentence of not more than one year of imprisonment, a fine of up to $100,000 and a term of supervised release and/or probation.

After the acts described in the statement of offense, a licensed asbestos abatement firm conducted abatement at the Maples.  The District of Columbia Department of the Environment subsequently conducted inspections and found the property to be free of all asbestos-containing materials.

In announcing the plea, Assistant Attorney General Cruden, U.S. Attorney Phillips and Acting Special Agent in Charge Lynn expressed appreciation for the work performed by Special Agents from EPA and the Department of Transportation.  They also acknowledged the efforts of Trial Attorney Cassandra J. Barnum and Paralegal Specialist Cynthia Longmire of the Environmental Crimes Section and those who worked on the case at the U.S. Attorney’s Office, including Paralegal Specialists Kaitlyn Krueger, former Paralegal Specialists Krishawn Graham and John Lowell and former Assistant U.S. Attorney Jonathan Hooks and Assistant U.S. Attorneys Virginia Cheatham and Zia Faruqui.

U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc. and the two owners and presidents of those companies have agreed to pay the United States more than $12.2 million to resolve allegations that they violated the federal False Claims Act by using a fictitious entity to make unsolicited telephone calls to Medicare beneficiaries in order to sell them durable medical equipment, the U.S. Department of Justice announced.  U.S. Healthcare Supply LLC, based in Milford, New Jersey, has agreed to pay more than $5 million, and Jon P. Letko, its owner and president, has agreed to pay more than $1 million.  His brother, Edward J. Letko, the owner and president of Oxford Diabetic Supply Inc., a medical equipment supplier that allegedly also participated in the scheme, has agreed to pay $6 million plus interest. 

“We will continue to hold health care providers accountable for attempting to circumvent Medicare statutes and regulations that help prevent the submission of claims for medically unnecessary services and supplies,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Arrangements which clearly disregard program requirements in order to enhance the financial interests of health care providers will not be tolerated.”

“Cold-calling people to sell them expensive medical equipment is prohibited for a reason: unsuspecting patients shouldn’t be coerced into making medical decisions about devices and equipment – which they may not even need – on the basis of a sales pitch,” said U.S. Attorney Paul J. Fishman for the District of New Jersey.

The settlement announced today resolves allegations that U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc. set up and controlled an entity called Diabetic Experts Inc., which they used to make unsolicited telephone calls to Medicare beneficiaries in order to sell them durable medical equipment.  The companies submitted claims to Medicare for the equipment that they sold based on these unsolicited calls.  This conduct violated the Medicare Anti-Solicitation Statute. 

This 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 $30.5 billion through False Claims Act cases, with more than $18.4 billion of that amount recovered in cases involving fraud against federal health care programs.

This case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of New Jersey and the U.S. Department of Health and Human Services’ Office of the Inspector General.  The claims resolved by the settlement are allegations only and there has been no determination of liability.

A Greenville, Texas, resident pleaded guilty today to one count of aiding and assisting in the preparation of false tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney John R. Parker for the Northern District of Texas. 

According to documents filed with the court, Lourdes Ramirez, 39, was a tax return preparer operating under the names TX ASAP Tax Services and Fiesta Tax Service in Greenville.  Ramirez admitted that from at least 2011 through 2014, she willfully prepared and filed individual income tax returns for clients that reported materially false information, including false business income and losses, false credits and false deductions in order to produce fraudulently inflated refunds.  Ramirez prepared approximately 1,163 tax returns and caused an intended tax loss to the United States of approximately $1,155,383.

Ramirez is scheduled to be sentenced on Dec. 21.  She faces a statutory maximum sentence of three years in prison, as well as a term of supervised release and monetary penalties.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Parker commended special agents of Internal Revenue Service-Criminal Investigation, who conducted the investigation and Trial Attorneys Melanie A. Smith and Alexander R. Effendi 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.

A federal grand jury sitting in Charlotte, North Carolina, returned an indictment on Aug. 16, which was unsealed today, against a Monroe, North Carolina, resident charging him with one count of attempting to interfere with the due administration of the internal revenue laws and five counts of filing a false income tax return, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.

According to the indictment, between approximately October 2007 through at least September 2011, Billy D. Floyd attempted to obstruct and impede the due administration of the internal revenue laws by filing numerous false Internal Revenue Service (IRS) Forms 1040X, Amended Individual Income Tax Returns, in an attempt to reduce his tax liability to zero.  The indictment further alleges that Floyd submitted fictitious “Surety Bonds” to the IRS that falsely purported to satisfy his outstanding tax liabilities.  Floyd also attempted to disrupt the public sale of property that the IRS previously seized by attempting to intimidate IRS employees conducting the sale as well as potential buyers.  Following the termination of the public sale due to his actions, Floyd also filed a lien against the property in an effort to encumber it and prevent any sale by the IRS.

If convicted, Floyd faces a statutory maximum sentence of three years in prison for each count in the indictment.  He also faces a term of supervised release and monetary penalties.

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

Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who conducted the investigation and Trial Attorney Gregory Bailey of the Tax Division, who is prosecuting the case.         

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

Department Will Continue to Carefully Monitor ABI’s Compliance with Distribution Obligations and Competitive Effects of ABI’s Craft Acquisitions

Deputy Assistant Attorney General Juan Arteaga of the Justice Department’s Antitrust Division released the following statement today on the division’s decision to close its investigation into Anheuser-Busch InBev’s (ABI) acquisition of Virginia-based craft brewer, Devils Backbone.

“Over the past 30 years, the American beer industry has experienced a renaissance that has resulted in the most diverse, innovative and dynamic brewing culture in the world.  This revival of the U.S. beer industry – an industry in which millions of Americans spend over $100 billion per year – is largely due to the hard work and growth of craft and other high-end brewers, which have provided consumers with a large number of new and high quality beer options.

“In addition to enhancing the diversity and quality of beer sold in the U.S., high-end brewers have served as an important constraint on the ability of large brewers – such as ABI and MillerCoors – to raise the prices on their premium beers.  High-end beers such as craft beers constrain the ability of ABI and MillerCoors to continue to raise the prices on their beers because consumers are increasingly willing to trade-up from premium to high-end beers if the prices for premium brands come too close to the prices of high-end brands.  

“In recent years, the division has successfully fought to preserve the competitive role that high-end brewers play in the U.S. beer industry.  In 2013, for example, the division sued to challenge ABI’s acquisition of Mexican brewer Grupo Modelo, which resulted in the companies’ agreeing to divest Grupo Modelo’s entire U.S. business – including the rights to sell popular beer brands such as Corona and Pacifico in the U.S. – to an independent competitor.  Since this divesture, these popular beer brands have continued to grow and vigorously compete for the hard earned dollars of consumers. 

“Earlier this year, the division approved ABI’s acquisition of SABMiller only after ABI agreed to divest SABMiller’s entire U.S. business – including SABMiller’s ownership interest in MillerCoors – and to cease business practices and programs that restrict the ability and incentive of independent beer distributors to sell and promote the beers of ABI’s rivals.  The division insisted on ABI’s agreement to distribution-related relief because craft and other brewers cannot grow in scale and effectively compete in the U.S. beer industry without meaningful access to efficient beer distribution networks, such as the network that distributes ABI beer.

“After careful consideration, the division has determined that, in light of the distribution relief secured in the ABI/SABMiller settlement, the competitive implications of ABI’s acquisition of Devils Backbone are too uncertain at this time to warrant further investigation.  However, the division will be carefully monitoring ABI’s compliance with its distribution obligations under this settlement.  The division will also carefully scrutinize any future craft acquisitions by ABI.  The ABI/SABMiller settlement provides the division the opportunity to review certain of ABI’s future craft acquisitions – including acquisitions that may fall below the Hart-Scott-Rodino Act’s reporting thresholds. 

“In reviewing any such future acquisitions, the division will consider whether these transactions, either singularly or collectively, are likely to harm competition by, among other things, giving ABI the ability to prevent its craft rivals from effectively getting their products to the market or the ability to increase high-end beer prices which, in turn, would enhance ABI’s ability to raise prices in the premium and sub-premium beer segments.  If the division sees evidence that ABI may be circumventing its distribution obligations or has used multiple craft acquisitions to impair competition, it will consider all its enforcement options – including re-opening its investigation of ABI’s acquisition of Devils Backbone – and all appropriate relief.”

On Tuesday, September 6th, INTERPOL Washington officially joined the world of social media. The launch of the official USNCB Twitter account at https://twitter.com/INTERPOL_USA marks a new phase in expanding our communications tools. We encourage you to "follow us" to stay up to date with the latest INTERPOL Washington news.

A federal jury in Greenville, North Carolina, has convicted Oceanic Illsabe Limited, Oceanfleet Shipping Limited and two of their employees of violating the Act to Prevent Pollution from Ships (APPS), obstruction of justice, false statements, witness tampering and conspiracy, announced Assistant Attorney General John C. Cruden, head of the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina.  Oceanic Illsabe Limited is the owner of the M/V Ocean Hope, a large cargo vessel that was responsible for dumping tons of oily waste into the Pacific Ocean last year.  Oceanfleet Shipping Limited was the managing operator of the vessel.  Both companies operate out of Greece.  Also convicted at trial were two senior engineering officers who worked aboard the vessel, Rustico Ignacio and Cassius Samson.  The jury convicted on each of the nine counts in the indictment.

The operation of marine vessels, like the M/V Ocean Hope, generates large quantities of oil sludge and oil-contaminated waste water.  International and U.S. law require that these vessels use pollution prevention equipment, known as an oil-water separator, to preclude the discharge of these materials.  Should any overboard discharges occur, they must be documented in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.  The evidence presented to the jury showed that in June 2015, the vessel discharged around ten metric tons of sludge into the ocean.  The vessel was also regularly pumping contaminated water directly overboard.  None of these discharges were disclosed as required.

“Our office was pleased to partner with the Department of Justice’s Environment and Natural Resources Division in this significant case,” said U.S. Attorney Bruce.  “We will continue to vigorously enforce federal laws designed to prevent the pollution of the world’s oceans.”

“While the vast majority of vessel owners, operators, and crews who do business in the United States follow our environmental laws, every year, a few unscrupulous commercial mariners obstruct justice in an attempt to hide from the Coast Guard the intentional discharge of large quantities of pollutants into the oceans,” said Rear Admiral Meredith Austin, commander of the Fifth Coast Guard District.  “Coast Guard Marine Inspectors and the Coast Guard Investigative Service, in concert with the Department of Justice, will continue to aggressively investigate and prosecute those who do this.”

The evidence presented during the nine-day trial demonstrated that the companies were aware that the ship had not offloaded any oil sludge from the vessel since September 2014 and that the ship rarely used its oil-water separator.  Instead, the vessel’s second engineer, Samson, ordered crewmembers to connect what is known in the industry as a “magic pipe” to bypass the vessel’s oil-water separator and pump oil sludge overboard.  In addition, crewmembers were ordered to pump oily water from the vessel’s bilges directly into the ocean up to several times per week.  The dumping occurred with the knowledge and approval of the ship’s chief engineer,  Ignacio.  Finally, the engineers used a tank designated for oily wastes to store diesel fuel for sale on the black market.

Upon arriving at the Port of Wilmington, Oceanic, Oceanfleet, Ignacio and Samson attempted to hide these discharges by presenting a false and fictitious oil record book to U.S. Coast Guard inspectors.  When inspectors uncovered evidence of dumping, the defendants ordered lower-level crewmembers to lie to Coast Guard personnel.  Samson also made several false statements to a Coast Guard inspector regarding the bypass of the oil-water separator.

At the conclusion of trial, defendants Oceanic and Oceanfleet were convicted of one count of conspiracy, one count of violating APPS, two counts of obstruction of justice, one count of false statements and four counts of witness tampering.  Ignacio was convicted of one count of conspiracy, one count of violating APPS, one count of obstruction of justice and two counts of witness tampering.  Samson was convicted of one count of conspiracy, one count of violating APPS, two counts of obstruction of justice, one count of false statements and three counts of witness tampering.  The companies could be fined up to $500,000 per count, in addition to other possible penalties.  Ignacio and Samson face a maximum penalty of 20 years in prison for the obstruction of justice charges.

This case was investigated by the U.S. Coast Guard Sector North Carolina, the Coast Guard Investigative Service and U.S. Coast Guard District Five.  Civil Chief Norman Acker and Assistant U.S. Attorney Michael Anderson of the U.S. Attorney’s Office for the Eastern District of North Carolina provided additional expertise and assistance with the pretrial phase of the case.  The attorneys prosecuting the case were Senior Trial Attorney Kenneth Nelson and Trial Attorney Brendan Selby, of the Department of Justice’s Environmental Crimes Section and Banu Rangarajan of the U.S. Attorney’s Office for the Eastern District of North Carolina.