District Not Recorded

A New Jersey man was sentenced to 30 months in prison for orchestrating an eight-year scheme to falsify employment certifications to facilitate the illegal entry of Indian nationals into the United States and for filing a false tax return.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey, Chief Richard Weber of the Internal Revenue Service–Criminal Investigation (IRS-CI) and Director Bill A. Miller of the State Department’s Diplomatic Security Service (DSS) made the announcement.

Sandipkumar Patel, 42, of Edison, New Jersey, was sentenced by U.S. District Court Judge William H. Walls of the District of New Jersey.  The court also ordered Patel to pay a fine of $50,000, and restitution in the amount of $423,452 to the IRS.

On Sept. 4, 2014, Patel pleaded guilty to a two-count information charging him with conspiring to defraud the United States and subscribing to a false federal income tax return.

According to court documents filed in connection with his plea, from 2001 until 2009, Patel sponsored the visa applications of Indian nationals by falsely claiming that he would provide employment for them in the United States.  Patel falsely certified on the visa applications that he would employ the migrants in various technical fields at several New Jersey companies, thereby facilitating their illegal entry into the United States.  Over the course of the scheme, migrants paid Patel tens of thousands of dollars for the false certifications.  To disguise the scheme, Patel issued payroll checks and other payroll forms.  Patel required the migrants to return the proceeds of the payroll checks to him and to further reimburse him for the payroll tax expenses he incurred.  Patel used the fraudulent pay stubs and payroll checks to support false applications to extend the visas, and charged the migrants fees for the visa extensions.

As a result of falsely carrying the migrant employees on his payrolls, Patel overstated his payroll expenses on his federal income tax returns by more than $1.4 million over four years, and thereby underreported his tax obligation by over $400,000 for those years. 

This case was investigated by the IRS-CI and DSS.  The case is being prosecuted by Senior Trial Attorney Hope S. Olds of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Michael Robertson of the District of New Jersey, with assistance from the Criminal Division’s Asset Forfeiture and Money Laundering Section.

DENVER – Jill M. Evans, age 49, of Littleton, Colorado was arrested last week on charges of wire fraud and money laundering, the United States Attorney’s Office, IRS – Criminal Investigation (IRS CI) and the Federal Bureau of Investigation (FBI) announced. Evans was indicted by a federal grand jury on May 21, 2015.  The indictment remained under seal until her arrest on May 27, 2015.  Evans appeared on that date in federal court where she was advised of her rights as well as the charges pending against her.  She was then ordered released on May 29, 2015, by a U.S. Magistrate Judge on a 50 percent secured bond, where she needs to pay 10 percent of the bond (or $5,000).

According to the indictment, in September 2011 and continuing through May 2015, Evans devised a scheme to defraud at least eight individuals whom she solicited to invest in alleged oil transactions.  Evans informed or caused others to inform potential investors that she or one of her companies, Paramount Mortgage or Evcom, had rights or agreements related to the purchase and resale of petroleum products, including diesel oil or jet fuel.  She claimed that the oil deals could not be completed until certain fees or other expenses related to the deals could be paid.

Evans falsely told investors they would receive a return on their investment ranging from fifty percent to fifty times their original investment within a matter of days or weeks.  She told investors that their funds would be held in an escrow account and would be fully refundable if the oil deal did not close. Evans instructed investors to transfer funds to bank accounts.  Some investors’ funds were not used as represented and were also sent to personal bank accounts that Evans controlled.  Of those funds transferred to personal accounts she controlled, she used those funds for her own personal expenses.

She would tell investors that oil deals were nearing successful completion and that disbursements of profits were imminent.  She sent e-mails attaching fabricated court documents regarding the status of civil litigation purporting to award Evans or related parties substantial sums of money.  When the oil deals failed to close, she told investors that she would be able to pay investors from these proceeds.

Furthermore, Evans concealed from investors her December 2011 criminal indictment by a State of Colorado grand jury and her subsequent March 2013 criminal conviction for theft and forgery.  Evans’s bond conditions prohibited her from entering into any financial transactions in excess of $1,000, and the terms of her subsequent state sentence prohibited her from investing money, entering into any financial contracts or arrangements, and having access to or control of any funds of any individual.

Evans was charged with eight counts of wire fraud and six counts of money laundering.  Wire fraud carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000.  Money laundering carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000.  Included in the indictment is a notice of forfeiture for any property traceable to the money laundering charges alleged in the indictment.

This case was investigated by IRS – Criminal Investigation and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Anna K. Edgar.

The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.

United Nations (AP) -- A growing number of extremist groups from Africa to southeast Asia are shifting their allegiance to the Islamic State group, leading to greater risks for "cross-pollination" among conflicts beyond Syria and Iraq, the head of Interpol said Friday.

Jurgen Stock cited this shift as an emerging trend at a U.N. Security Council meeting along with changing travel methods being used by foreign fighters seeking to join groups like the Islamic State and al-Qaida.

Stock was a keynote speaker at a meeting attended by half a dozen ministers including U.S. Secretary of Homeland Security Jeh Johnson to assess progress in implementing a U.S.-sponsored resolution adopted last September requiring all countries to prevent the recruitment and transport of would-be foreign fighters preparing to join extremist groups.

Johnson said the United States will be developing a new passenger data-screening and analysis system within the next 12 months which will be made available to the international community at no cost for both commercial and government organizations to use.

In a report obtained by The Associated Press on April 1, the panel of experts monitoring U.N. sanctions against al-Qaida said the number of fighters leaving home to join al-Qaida and the Islamic State group in Iraq, Syria and other countries has spiked to more than 25,000 from over 100 nations. The panel said its analysis indicated the number of "foreign terrorist fighters" worldwide increased by 71 percent between mid-2014 and March 2015.

Secretary-General Ban Ki-moon said most are young men motivated by extremist ideologies but he called for an examination of the reasons why more women and girls are joining the groups as well. He said he plans to present a plan of action to prevent violent extremism to the General Assembly later this year.

The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a final settlement with Millard Refrigerated Services that resolves alleged violations of the Clean Air Act, Emergency Planning and Community Right-to-Know Act and Comprehensive Environmental Response, Compensation, and Liability Act violations for an airborne release of ammonia from Millard’s Theodore, Alabama, facility in 2010.  Millard will pay a $3 million penalty for the violations that sickened 152 people responding to the BP oil spill.

“The release of ammonia from Millard's facility created significant health problems,” said Assistant Attorney General John C. Cruden for the Environment and Natural Resources Division.  “This settlement underscores how lapses in environmental management can have serious consequences, and today we are holding Millard accountable for this failure to ensure the safety of its workers and the surrounding community.”

“The Clean Air Act exists to protect all of us from preventable threats to our health and safety, such as what happened in this case,” said Keyon R. Brown, U.S. Attorney for the Southern District of Alabama. “On behalf of the citizens of our district, I commend the hard work of the EPA and the Department of Justice’s Environmental and Natural Resources Division in achieving such a significant settlement that vindicates these interests."

“EPA is serious about holding companies that threaten people’s health and safety accountable,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “It’s imperative that companies that use and store potentially-hazardous materials like ammonia ensure their operations do not pose a health risk to their employees or the public.”  

On Aug. 23, 2010, the Millard Refrigerated Service warehouse in Theodore, Alabama, released approximately 32,000 pounds of anhydrous ammonia, to which exposure can be lethal, into the air after refrigeration equipment malfunctioned.  The ammonia travelled directly over a site where more than 800 people were working on decontaminating ships responding to the Deepwater Horizon oil spill in the Gulf of Mexico.  The Mobile, Alabama, Emergency Management Agency ordered an evacuation of the surrounding area and a one mile shelter in place situation following the ammonia release. 

One hundred fifty-two people working at the site and on ships were treated for symptoms of ammonia exposure at hospitals in the Mobile area, four of whom were admitted into intensive care units.  One Millard employee sustained injuries after briefly losing consciousness from ammonia inhalation.

During its investigation of the warehouse after the ammonia release, EPA discovered that Millard failed to adequately address a well-known risk for ammonia production systems called hydraulic shock, which can cause catastrophic equipment failures.  These failures can lead to hazardous releases of anhydrous ammonia.  The company’s failure to address this risk, in addition to other deficiencies in its production and safety systems, amounted to 37 distinct violations of the Clean Air Act’s Risk Management Program and General Duty Clause.  These requirements compel companies that store or use potentially-hazardous substances like ammonia to identify the hazards posed by their operation, design and maintain a safe facility and minimize the consequences of any releases that might occur. The company’s failure to immediately report a release of anhydrous ammonia above the reportable quantity to the National Response Center amounted to one CERCLA violation.  The company’s failure to immediately report a release of anhydrous ammonia to the local and state emergency planning commissions and to file a follow-up reports for two releases amounted to three EPCRA violations.

EPA also discovered that Millard had two prior smaller ammonia releases caused by hydraulic shock, which should have signaled a need to take steps to prevent a catastrophic release like the one that occurred at the Theodore warehouse.  Millard sold the Theodore warehouse facility, which is no longer in operation.

The settlement was entered in the District Court in Mobile, Alabama.

To read the settlement, or for more information about the case, visit: www.justice.gov/enrd/consent-decrees

DENVER – Ronald Odean Bryant, age 22, of Denver, Colorado, has been indicted on May 20, 2015 by a federal grand jury in Denver on charges of being a felon in possession of a firearm and being a felon in possession of ammunition, U.S. Attorney John Walsh  and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Denver Division Special Agent in Charge Luke Franey announced.  Prior to the indictment, Bryant was charged by Criminal Complaint on May 15, 2015.  On May 29, 2015 the court ordered that both the original Complaint and the formal charging document, the indictment, be unsealed.  The defendant is currently in state custody on unrelated charges.  No date has yet been set for when Bryant will be brought to federal court for his initial appearance.

According to court documents, including the original affidavit in support of the Criminal Complaint, on May 11, 2015, at approximately 11:30 p.m. uniformed officers in a marked Denver Police Department patrol vehicle noticed a gold in color Range Rover, with severe damage, including a heavily damaged windshield, damage to the headlight/bumper area, with the turn signals not appearing to work.  The break light on the driver’s side was not functioning either.  The car was pulled over by the Denver Police patrol vehicle near the intersection of East Bruce Randolph and North York Street.

When the officers approached the car they observed a female driver, a male sitting in the front passenger seat, and two females in the back seat.  Each individual provided their identification information.  When the officers checked the information, they determined that one of the females, and the male, now identified as Bryant, provided false information.  As officers approached the vehicle to discuss the false information the car started to move forward as if it was about to flee.  The driver stopped the car after being ordered by an officer to stop.  Bryant was then observed to have his hands in his lap, concealed by a leather jacket.  He was asked to step out of the car.  When he complied, he dropped a plastic baggie of what appeared to be narcotics.  It was later determined that the baggie contained methamphetamine.

As Bryant was about to be frisked he fled on foot.  Officers gave chase, but did not immediately capture him.  The Denver Police Department established a perimeter, and summoned a Police K-9 to the scene.  Once the K-9 arrived and the area within the perimeter was searched, Bryant was apprehended without incident.  When searched subsequent to arrest a round of ammunition was found in Bryant’s pocket.  An inventory search of the vehicle Bryant was in revealed a Ruger .22 caliber pistol loaded with 7 rounds of ammunition.  This firearm was located under the rear seat.  A small revolver was also located, loaded with one round, in a beer box in the vehicle.  Additional investigation determined that one of the females in the vehicle had purchased the Ruger pistol for Bryant several days earlier.

On May 14, 2015, agents and officers reviewed Bryant’s criminal history.  Anyone with a felony criminal conviction is prohibited by both federal and state law of possessing a firearm or ammunition.  Bryant has been identified as a CMG Blood.  He has a prior conviction in Denver District Court for possession of a Schedule II Controlled Substance.  Bryant is currently on probation in that case.

Bryant has been charged with one count of being a felon in possession of firearm or ammunition, and one count of being a felon in possession of ammunition.  If convicted, the defendant faces not more than 10 years in federal prison, and up to a $250,000 fine on each of the two total counts.

“This case is an example of the close partnership between the Department of Justice, the ATF and the Denver Police Department to combat gun violence on our streets,” said U.S. Attorney John Walsh.  “Working together with all levels of law enforcement and the community itself, we are making significant progress in those efforts, and will continue to move forward effectively.”

“ATF and our partners will continue to pursue felons who possess firearms and endanger members of the community,” said ATF Denver Division Special Agent in Charge Luke Franey.

Denver Police Chief Robert White said:  “The significant arrest of an individual like Ronald Bryant goes a long way toward making our community safer and addressing violent crime.  With zero tolerance for violent crime and a collaborative effort between law enforcement and the community, we can make communities safer and Denver a better place to live.”

This case was investigated by Denver Police Department and the ATF, as part of Project Safe Neighborhood, an initiative which includes the Denver, Aurora and Lakewood Police Departments working in concert with the ATF and the U.S. Attorney’s Office.

The defendant is being prosecuted by Assistant U.S. Attorney Peter McNeilly.

The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.

Two individuals pleaded guilty today for their roles at fraudulent debt relief services companies that offered to settle credit card debts but instead took victims’ payments as undisclosed up-front fees, the Justice Department and U.S. Postal Inspection Service (USPIS) announced.

Athena Maldonado, 30, and Christopher Harati, 31, both of Orange County, California, pleaded guilty to a one-count information alleging conspiracy in connection with debt relief companies known as Nelson Gamble & Associates (Nelson Gamble) and Jackson Hunter Morris & Knight LLP (Jackson Hunter).  According to the information filed in the case, the defendants and their co-conspirators portrayed the debt relief companies as law firms and attorney-based companies that would negotiate favorable settlements with creditors.  Clients made monthly payments expecting the money to go toward settlements.  The companies instead took an amount equal to at least 15 percent of clients’ total debt as company fees, with the first six months of payments going almost entirely toward undisclosed up-front fees. 

“Debt relief service scams prey on vulnerable consumers trying to climb out of tough financial situations,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Justice Department will aggressively pursue the criminals who operate these schemes.”

Maldonado admitted that she acted as the “legal department” for both companies, and used multiple aliases when responding to complaints submitted by state attorney general offices, the Better Business Bureau and private attorneys.  Maldonado admitted that, after Nelson Gamble changed its name to Jackson Hunter, she responded to consumer complaints by falsely stating, among other things, that the two companies were not related and that Jackson Hunter could not refund money paid to Nelson Gamble.

Harati admitted that he worked as a client relations manager for the companies and handled complaint calls from clients.  He admitted he told customers that Nelson Gamble and Jackson Hunter were separate companies, falsely stated that Jackson Hunter was a nationwide law firm with years of experience and made other misrepresentations designed to convince customers to stay with the company.

The defendants each face a statutory maximum sentence of five years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, along with mandatory restitution.  Their sentencing dates have not been set.

On Dec. 3, 2014, a grand jury in Santa Ana, California, returned a 22-count indictment charging Jeremy Nelson, Elias Ponce and John Vartanian, all of Orange County, for mail fraud, wire fraud, and conspiracy to commit mail and wire fraud in the same fraudulent scheme.  The trial in that case is scheduled to begin on Feb. 16, 2016, in Los Angeles.

The Federal Trade Commission (FTC) brought a civil case against Nelson Gamble, Jackson Hunter and other defendants in September 2012, alleging that the defendants falsely claimed they would reduce consumers’ unsecured debt by 50 percent or more, made unauthorized charges to their bank accounts and called phone numbers listed on the National Do Not Call Registry.  For more information about debt relief firms, the FTC encourages consumers to review this page on their website.

Principal Deputy Assistant Attorney General Mizer commended the USPIS team assigned to the Civil Division’s Consumer Protection Branch for their investigative efforts, and thanked the U.S. Attorney’s Office of the Central District of California for their contributions to the case.  The case is being prosecuted by Trial Attorney Alan Phelps of the Consumer Protection Branch. 

A Staten Island, New York, tax return preparer and business owner pleaded guilty today in U.S. District Court in the Eastern District of New York to preparing false federal income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

According to court documents and statements, Alabi Gbangbala, 51, was the operator of Broadfield, a tax return preparation business located in Staten Island.  For tax years 2008 and 2009, Gbangbala prepared false individual income tax returns for Broadfield clients by, among other things, falsifying self-employment business receipts and losses on Schedules C and inflating or fabricating charitable contributions and unreimbursed employee expenses on Schedule A.  Gbangbala was responsible for filing false tax returns on behalf of his clients that resulted in at least a $178,000 tax loss to the U.S. Treasury. Gbangbala also filed false personal individual income tax returns for tax years 2008 through 2010, in which he failed to report his total income for each calendar year. 

Gbangbala faces a statutory maximum sentence of three years in prison and a fine of $250,000 for one count of aiding and assisting the preparation of a false return at his Sept. 24 sentencing.

Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Christopher O’Donnell and Mark McDonald of the Tax Division, who are prosecuting the case.  Ciraolo also thanked the U.S. Attorney’s Office of the Eastern District of New York for their assistance. 

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

The Department of Justice announced an agreement with Pennington County, South Dakota, today to resolve accessibility issues in the county’s services, programs, activities and facilities under Title II of the Americans with Disabilities Act (ADA).  This year marks the 25th anniversary of the ADA, which the Civil Rights Division plays a critical role in enforcing.  In honor of the anniversary, each month the Department of Justice has been highlighting efforts that are making full participation and equal opportunity for people with disabilities a reality.

Pennington County and the department reached an agreement under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the ADA.  One of the hallmarks of the agreement is the requirement that the county hire an independent licensed architect (ILA) who is knowledgeable about the architectural accessibility requirements of the ADA.  The ILA will certify that the accessibility modifications done to the county’s facilities comply with the ADA Standards for Accessible Design. 

The agreement with the county will allow people with disabilities to participate in and benefit from the services provided in Pennington County’s facilities including its New Administration Building, Courthouse Complex, Jail, Jail Annex, Public Safety Building, Public Health Building, Juvenile Services Center and the Pennington County Fairgrounds.  The county will renovate and remediate everything from entrances, service areas, counters, restrooms and parking so that people with disabilities can get into county buildings and use the services and programs offered by the county in each of its buildings.  In addition, the agreement calls for implementing a comprehensive plan to improve the accessibility of sidewalks, transportation stops and pedestrian crossings by installing accessible curb ramps throughout the county.

“As we continue to celebrate the ADA’s 25th Anniversary this year, today’s agreement is the sixth PCA agreement the Department of Justice has signed in six months and exemplifies our continuing commitment to ensure that citizens with disabilities enjoy the same services, programs and activities that all others enjoy,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “Equal access to local government is the cornerstone of Project Civic Access in its quest to protect the civil rights of municipalities’ citizens with disabilities.”

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

The United States filed a complaint seeking to bar a Newberry County, South Carolina, woman from preparing federal tax returns for others, the Justice Department announced today.

The civil complaint against Julie E. Hueble, which was filed in the U.S. District Court for the District of South Carolina, alleges that Hueble owned and operated three Liberty Tax Service franchise locations in Greenwood and Clinton, South Carolina.  According to the complaint, Hueble and the employees of her tax preparation stores prepared federal income tax returns that improperly understated customers’ tax liabilities or increased customers’ claims for refundable tax credits.

The complaint alleges that Hueble and her employees prepared returns for customers that, among other things, falsely reported on Schedule Cs (Profit or Loss From Business) non-existent businesses and/or inflated income or deductions.  The suit further alleges that Hueble and her employees fabricated other deductions, claimed improper filing statuses and falsely claimed dependents, all of which resulted in fraudulently maximizing refunds and/or refundable credits. 

In one example detailed in the complaint, Hueble falsely increased a customer’s taxable income by reporting a fabricated “childcare” business, even though the customer did not own a child care business and gave Hueble no documentation showing that she did.  The increased income enabled the customer to receive an inflated Earned Income Tax Credit.

The complaint states that Hueble’s tax-preparation stores prepared 2,165 federal income tax returns between 2012 and 2014, and Hueble prepared 904 returns during this period.  An analysis of returns filed between 2012 and 2014 revealed that the harm to the U.S. Treasury caused by Hueble’s conduct could be more than $1 million, according to the suit. 

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015.  The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters.  Information about these cases is available on the Justice Department’s website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

First Tennessee Bank N.A. has agreed to pay the United States $212.5 million 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 Justice Department announced today.  First Tennessee is headquartered in Memphis, Tennessee. 

“First Tennessee’s reckless underwriting has resulted in significant losses of federal funds and was precisely the type of conduct that caused the financial crisis and housing market downturn,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “We will continue to hold accountable lenders who put profits before both their legal obligations and their customers, and restore wrongfully claimed funds to FHA and the treasury.” 

Between January 2006 and October 2008, First Tennessee, through its subsidiary First Horizon Home Loans Corporation (First Horizon), participated in the FHA insurance program as a Direct Endorsement Lender (DEL).  As a DEL, First Tennessee had the authority to originate, underwrite and endorse mortgages for FHA insurance.  If a DEL such as First Tennessee 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, neither the FHA nor HUD reviews a loan before it is endorsed for FHA insurance.  DELs such as First Tennessee are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices and to self-report any deficient loans identified by their quality control program.  In August 2008, First Tennessee sold First Horizon to MetLife Bank N.A. (MetLife), a wholly-owned subsidiary of MetLife Inc., which thereafter originated FHA-insured mortgages under the MetLife name.  In February 2015, MetLife agreed to pay $123.5 million to resolve its False Claims Act liability arising from its FHA originations after it acquired First Horizon from First Tennessee.

“First Tennessee admitted failings that resulted in poor quality FHA loans,” said Acting U.S. Attorney John A. Horn of the Northern District of Georgia.  “While First Tennessee profited from these loans, taxpayers incurred substantial losses when the loans defaulted.  The settlement, as well as the investigation that preceded it, illustrates that the Department of Justice will closely scrutinize entities that cause financial injury to the government, and, in turn, the American taxpayer.”

The settlement announced today resolves allegations that First Tennessee failed to comply with FHA origination, underwriting and quality control requirements.  As part of the settlement, First Tennessee admitted to the following facts: From January 2006 through October 2008, it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements.  Beginning in late 2007, First Tennessee significantly increased its FHA originations.  The quality of First Tennessee’s FHA underwriting significantly decreased during 2008 as its FHA lending increased.  Beginning no later than early 2008, First Tennessee became aware that a substantial percentage of its FHA loans were not eligible for FHA mortgage insurance due to its own quality control findings.  These findings were routinely shared with First Tennessee’s senior managers.  Despite internally acknowledging that hundreds of its FHA mortgages had material deficiencies, and despite its obligation to self-report findings of material violations of FHA requirements, First Tennessee failed to report even a single deficient mortgage to FHA.  First Tennessee’s conduct caused FHA to insure hundreds of loans that were not eligible for insurance and, as a result, FHA suffered substantial losses when it later paid insurance claims on those loans.

“Our investigation found that First Tennessee caused FHA to pay claims on loans that the bank never should have approved and insured in the first place,” said HUD Inspector General David A. Montoya.  “This settlement reinforces my commitment to combat fraud in the origination of single family mortgages insured by the FHA and makes certain that only qualified, creditworthy borrowers who can repay their mortgages are approved under the FHA program.” 

“We are pleased that First Tennessee has acknowledged facts that demonstrate its failure to comply with HUD’s requirements and has agreed to settle with the government,” said HUD General Counsel Helen Kanovsky.  “We thank the Department of Justice and HUD’s Office of Inspector General for all of their efforts in helping us to make this settlement a reality.  We hope this agreement sends a message to those lenders with whom we do business that HUD takes compliance very seriously and so should they.”

The investigation of the allegations in the government’s complaint was a coordinated effort between the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Northern District of Georgia, HUD and HUD’s Office of Inspector General.

A Phenix City, Alabama, resident pleaded guilty today in the Middle District of Alabama for her role in a stolen identity refund fraud (SIRF) scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.

According to court documents, between March 2011 and May 2014, Teresa Floyd conspired with her daughter, Lasondra Miles Davis, and others to defraud the United States by filing false federal income tax returns using stolen identities.  Miles Davis obtained the means of identification of individuals without their authorization and provided the stolen identities to Floyd.  Floyd and her co-conspirators obtained Electronic Filing Identification Numbers (EFINs) from the Internal Revenue Service (IRS) in the names of tax preparation businesses, which Floyd then used to file false tax returns with the stolen identities.  All of the false returns included fraudulent claims for tax refunds.  Floyd, Miles Davis and others cashed the refund checks at several companies in Alabama and Georgia, and Floyd deposited refund checks into her bank account. 

Floyd faces a mandatory statutory sentence of two years in prison for the aggravated identity theft count and an additional statutory maximum sentence of 10 years in prison for the conspiracy count.  Both counts include a statutory maximum fine of $250,000.  Miles Davis pleaded guilty on April 10 to one count of aggravated identity theft and is scheduled to be sentenced on Aug. 12. 

Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Michael C. Boteler and Michael P. Hatzimichalis of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting the case. 

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

On May 28, a jury in the District of Wyoming convicted two Cheyenne, Wyoming, residents and a Sedona, Arizona, resident on charges of conspiracy to defraud the United States and obstructing a grand jury investigation.  The announcement was made by Acting Assistant Attorney General Caroline D. Ciraolo for the Justice Department’s Tax Division, U.S. Attorney Christopher A. Crofts for the District of Wyoming and Special Agent in Charge Gilbert R. Garza for the Internal Revenue Service (IRS) Criminal Investigations.

Joseph Ruben Hill aka Joe Hill, 56, and Lucille Kathleen Hill aka Kathy Hill, 58, both of Cheyenne, Wyoming, and Gloria Jean Reeder, 68, of Sedona, Arizona, were convicted on charges of conspiracy to defraud the United States and obstructing a grand jury investigation following a three-week trial.  In July 2014, Joe Hill, Kathy Hill and Reeder were indicted for conspiring to defraud the United States by promoting and using a sham trust scheme.  Joe Hill and Reeder were also indicted for conspiring to obstruct the grand jury investigation in the District of Wyoming by causing individuals to withhold records required to be produced by federal grand jury subpoenas.  Joe Hill was indicted on four substantive counts of obstruction with respect to four individuals that he corruptly persuaded to withhold documents from the grand jury.  The jury convicted Joe Hill, Kathy Hill and Reeder of all charges alleged in the indictment.  

“Yesterday’s verdicts demonstrate that the Tax Division is committed to identifying abusive tax schemes and pursuing and prosecuting the promoters to the fullest extent of the law,” said Acting Assistant Attorney General Ciraolo.  

The evidence at trial established that Joe Hill and Kathy Hill last filed a federal individual income tax return in 1994, while Reeder had not filed since 1985.  None of the defendants paid any income taxes from those years to the present.  Joe Hill and Kathy Hill operated the business Creative Consulting Group (CCG), which sold sham trusts that they claimed would reduce or eliminate an individual’s federal income tax liability.  Essentially, the scheme involved assigning income to the trust by using a bank account in the trust’s name that was opened with a false federal tax identification number.  The Hills, Reeder, and many other CCG clients who testified during the trial used the CCG trusts to conceal income and assets from the IRS. Kathy Hill and Reeder both had prior IRS assessments of income tax in the 1990s, which they never paid.  To prevent the IRS from seizing their homes, they both used false liens to conceal the properties’ equity.

During 2007 through 2012, Joe Hill and Kathy Hill earned almost $500,000 in income through selling the CCG trusts, while Reeder earned more than $400,000 in income from insurance commissions and a travel business.  Three trial witnesses who used the CCG trusts --Lawrence Paille, Amanda Campbell and Stephanie Maciel -- previously pleaded guilty to conspiracy to defraud the United States. The unreported income related to the scheme exceeded $2.7 million. 

Chief U.S. District Judge Nancy D. Freudenthal set sentencing on Aug 6.  The maximum penalty faced by each of the three defendants for conspiracy to defraud the United States is five years in prison and a $250,000 fine.  For their convictions for conspiracy to obstruct an official proceeding, Joe Hill and Reeder each face a maximum sentence of 20 years in prison and a $250,000 fine.

“This verdict should send a clear message, promoting or participating in a fraudulent tax scheme is unacceptable; there is no secret formula that can eliminate a person's tax obligations,” said Special Agent in Charge Garza.  “We owe it to every American taxpayer to investigate and prosecute individuals who participate in these fraudulent tax schemes.”

The case was investigated by special agents from the Cheyenne, Wyoming, and Denver, Colorado, offices of IRS Criminal Investigation and prosecuted by Assistant U.S. Attorneys Todd I. Shugart and Eric J. Heimann of the U.S. Attorney’s Office for the District of Wyoming and Trial Attorney Lori A. Hendrickson of the Tax Division.

Two Tennessee men pleaded guilty to using a firearm to kill during a home invasion robbery they conducted on May 7, 2011, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David Rivera of the Middle District of Tennessee.

Demario Winston, 27, of Clarksville, Tennessee, and Michael Massey, 26, of Lexington, Tennessee, pleaded guilty before Chief District Court Judge Kevin H. Sharp of the Middle District of Tennessee to conspiracy to commit Hobbs Act Robbery and use of a firearm in a crime of violence resulting in death.  Massey also pleaded guilty to attempted Hobbs Act Robbery.  A sentencing hearing for Massey is scheduled for Sept. 18, 2015, and a sentencing hearing for Winston will be scheduled at a later date.

According admissions reflected in the plea agreements, on May 7, 2011, Winston, Massey and others attempted to rob a home in Clarksville, and Massey used a sledge hammer to gain entry.  The conspirators previously had been advised that a large amount of cocaine and cash was stored inside a safe in the basement of the home.

The defendants further admitted that, while inside the home, Winston, who was armed with a 9mm pistol, engaged in a gun fight with the homeowner on the first floor as other conspirators attempted to force one of the occupants of the home, Raul Triana, to open the safe in the basement, and pistol-whipped him in the face in the process.  Evidence introduced in the plea hearing indicated that in response to the shooting on the first floor, some of the conspirators fled the home, and Massey, who was armed with an assault rifle, fled through the basement where he encountered Triana and shot and killed him.

In addition, according to the statement of facts in support of Massey’s plea, on Oct. 21, 2011, he and a co-defendant robbed the owner of a Clarksville-based construction company at gunpoint.

This case was investigated by the Clarksville Police Department and the DEA.  The case is being prosecuted by Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee.

The Department of Justice and the Environmental Protection Agency (EPA) today announced that it have reached an agreement with Garden Homes and its affiliated companies to settle their alleged failure to control stormwater discharges.  These failures potentially resulted in pollutant discharges to the Passaic, Hackensack, Rahway, Raritan, Saddle and Delaware River watersheds.  The agreement requires Garden Homes to pay a $225,000 penalty and implement measures to improve the company’s stormwater practices.  In addition, the company has agreed to provide 108 acres of land for preservation within the Highlands Preservation Area in Morris County, New Jersey, protecting it from possible future development.  This land contains approximately 23 acres of wetlands adjacent to the Berkshire Valley Wildlife Management Area and in the Highlands Preservation Area—a critical drinking water protection area for the state of New Jersey.

“Today’s settlement will help protect New Jersey waterways from the harmful pollutants contained in stormwater runoff from Garden Homes’ construction sites and also preserve valuable wetlands and wildlife habitat,” said Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division.  “One of the important parts of the settlement is the requirement that Garden Homes develop a corporate-wide stormwater management program which may stimulate better management practices throughout the construction business.”

“Stormwater often carries pollution and sediment into local waterways that can damage water quality,” said Regional Administrator Judith A. Enck for EPA.  “Large quantities of stormwater can run off of construction sites and it is critically important that stormwater be controlled.  The EPA takes these violations seriously and this legal settlement not only holds the company accountable, but also includes measures to preserve 108 acres of land that contains vital wetlands near a wildlife area.”

Under the federal Clean Water Act, developers and contractors responsible for operations at construction sites one acre or larger are required to implement stormwater pollution prevention plans to keep soil and contaminants from running off into nearby waterways.  These plans can include measures such as the establishment of sediment barriers, the implementation of controls to hinder stormwater flowing onto the construction site and the protection of slopes.  Water carries soil and contaminants off of construction sites at a rate typically 10 to 20 times greater than that from agricultural lands and 1,000 to 2,000 times greater than that from forested lands.

Under the settlement, Garden Homes will undertake a corporate-wide evaluation of its existing stormwater practices and develop a corporate-wide stormwater management program.  In addition, Garden Homes will designate one of its employees as its company stormwater manager, who will be responsible for preparing all stormwater pollution prevention plans, developing and overseeing stormwater compliance training and conducting unannounced site inspections, among other responsibilities.  The company will also designate individual site stormwater managers for its various sites.  EPA estimates the value of these measures to be $539,000 for the first year and approximately $380,057 annually thereafter.

The complaint alleged that Garden Homes violated numerous stormwater requirements at ten of the company’s sites in New Jersey by failing to conduct and document weekly inspections; failing to install perimeter silt fencing along the perimeter of construction sites; failing to maintain a spill kit on-site; and allowing fuel to spill on the ground uphill from an unprotected catch basin, among other allegations.  The violations at issue in this case were found at multiple construction sites owned and/or operated by Garden Homes through their affiliates.  These repetitive violations continued to persist despite two administrative penalty actions taken by Region 2 against affiliates of Garden Homes.  

Under the terms of the proposed settlement, Garden Homes will donate land within the Highlands Preservation Area as a supplemental environmental project.  This donation of land will further aid in the recovery of threatened and endangered species, particularly the Indiana Bat and bog turtle, which have a known presence in the vicinity.

The proposed consent decree has been lodged in the U.S. District Court for the state of New Jersey and is subject to a 30-day public comment period and final court approval.  A copy is available on the Department of Justice website at: http://justice.gov/enrd/Consent_Decrees.html

For more information about requirements of the Clean Water Act and how EPA protects the nation’s water, visit http://water.epa.gov/

Follow EPA Region 2 on Twitter at http://twitter.com/eparegion2 and Facebook at http://facebook.com/eparegion2

The Department of Justice announced today that following its investigation into the death of Otis James Byrd that there is no evidence to pursue federal criminal civil rights charges in the death of Byrd. 

Officials from the Justice Department=s Civil Rights Division, the U.S. Attorney=s Office for the Southern District of Mississippi and the Federal Bureau of Investigation (FBI) met today with Byrd’s family to inform them of the decision.  Byrd, a 54-year old African-American man, was discovered hanging from a tree in Port Gibson, Mississippi, on March 19, 2015.

Justice Department investigators, working alongside state and local officials, conducted a comprehensive investigation into the circumstances surrounding Byrd’s death to determine whether his death was a homicide, and therefore within the scope of the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act of 2009.    

Under the applicable federal criminal civil rights statute, prosecutors must establish, beyond a reasonable doubt, that an individual willfully caused bodily injury because of the victim’s actual or perceived race, color, religion, national origin, gender, gender identity or disability. 

After a careful and thorough review, a team of experienced federal prosecutors and FBI agents determined that there was no evidence to prove that Byrd’s death was a homicide.  Accordingly, the investigation into this incident has been closed.

The Justice Department is committed to investigations of allegations of hate crimes and will continue to devote the resources required to ensure that all allegations of serious civil rights violations are fully and completely investigated. 

A federal jury in the Eastern District of Washington returned a guilty verdict yesterday against a Spokane, Washington, man for selling industrial bleach as a miracle cure for numerous diseases and illnesses, including cancer, AIDS, malaria, hepatitis, lyme disease, asthma and the common cold, the Department of Justice announced. 

Louis Daniel Smith, 45, was convicted following a seven-day trial of conspiracy, smuggling, selling misbranded drugs and defrauding the United States. Evidence at trial showed that Smith operated a business called “Project GreenLife” (PGL) from 2007 to 2011.  PGL sold a product called “Miracle Mineral Supplement,” or MMS, over the Internet.  MMS is a mixture of sodium chlorite and water.  Sodium chlorite is an industrial chemical used as a pesticide and for hydraulic fracking and wastewater treatment.  Sodium chlorite cannot be sold for human consumption and suppliers of the chemical include a warning sheet stating that it can cause potentially fatal side effects if swallowed.

“This verdict demonstrates that the Department of Justice will prosecute those who sell dangerous chemicals as miracle cures to sick people and their desperate loved ones,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “Consumers have the right to expect that the medicines that they purchase are safe and effective.”  Mizer thanked the jury for its service and its careful consideration of the evidence.

The government presented evidence that Smith instructed consumers to combine MMS with citric acid to create chlorine dioxide, add water and drink the resulting mixture to cure numerous illnesses. Chlorine dioxide is a potent agent used to bleach textiles, among other industrial applications.  Chlorine dioxide is a severe respiratory and eye irritant that can cause nausea, diarrhea and dehydration.  According to the instructions for use that Smith provided with his product, nausea, diarrhea and vomiting were all signs that the miracle cure was working.  The instructions also stated that despite a risk of possible brain damage, the product might still be appropriate for pregnant women or infants who were seriously ill.

According to the evidence presented at trial, Smith created phony “water purification” and “wastewater treatment” businesses in order to obtain sodium chlorite and ship his MMS without being detected by the U.S. Food and Drug Administration (FDA) or U.S. Customs and Border Protection.  The government also presented evidence that Smith hid evidence from FDA inspectors and destroyed evidence while law enforcement agents were executing search warrants on his residence and business. 

Before trial, three of Smith’s alleged co-conspirators, Chris Olson, Tammy Olson and Karis DeLong, Smith’s wife, pleaded guilty to introducing misbranded drugs into interstate commerce.  Chris Olson, along with alleged co-conspirators Matthew Darjanny and Joseph Lachnit, testified at trial that Smith was the leader of PGL.

In all, the jury convicted Smith of one count of conspiracy to commit multiple crimes, three counts of introducing misbranded drugs into interstate commerce with intent to defraud or mislead and one count of fraudulently smuggling merchandise into the United States.  The jury found Smith not guilty on one out of four of the misbranded drug counts. He faces a statutory maximum of 34 years in prison at his Sept. 9 sentencing.

The case was investigated by agents of the FDA’s Office of Criminal Investigations and the U.S. Postal Inspection Service.  The case was prosecuted by Christopher E. Parisi and Timothy T. Finley of the Civil Division’s Consumer Protection Branch in Washington, D.C.

A Louisiana man was charged in a two-count information with conspiracy to commit wire fraud and conspiracy to commit trademark counterfeiting using the “Silk Road” online marketplace, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Polite Jr. of the Eastern District of Louisiana.

“Anonymous online marketplaces have provided criminals with the ability to conduct illegal operations worldwide while seemingly insulating them from apprehension and prosecution,” said Assistant Attorney General Caldwell.  “The Criminal Division is determined to peel back the veil of anonymity and prosecute criminals of all stripes who attempt to use the ‘dark web’ to cloak their illegal conduct.”

According to allegations in the information, Beau Wattigney, 30, of New Orleans, Louisiana, created counterfeit coupons and used Silk Road to sell them.  Silk Road was a worldwide Internet forum used to anonymously sell illegal drugs, goods and services.  Wattigney allegedly used Silk Road 1.0 until it was dismantled by federal officials in October 2013, and Silk Road 2.0 until it was dismantled in November 2014.

According to the information, Wattigney designed the coupons to look like print-at-home manufacturers’ coupons.  The coupons included counterfeit trademarks for many prominent coupon distribution services, including Hopster, Coupons.com, SmartSource and RedPlum.  Wattigney allegedly sold a selection of counterfeit coupons entitled “The Original S.R. Exclusive Coupon Collection” for approximately $50.00.  Additionally, one counterfeit coupon Wattigney allegedly created and sold allowed users to purchase $50.00 Visa Gift Cards for $.01 each.  The coupons Wattigney allegedly sold on Silk Road 1.0 and 2.0 affected more than 50 manufacturers, retailers and online coupon distributors.  If redeemed, the counterfeit coupons could have resulted in a loss of more than $1,000,000 to the affected businesses.

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

The case is being investigated by the FBI’s Philadelphia Division, with assistance from the FBI’s New Orleans Division.  The case is being prosecuted by Senior Counsel Marie-Flore Johnson, Gavin Corn and Robert Wallace of the Criminal Division’s Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Jordan Ginsberg of the Eastern District of Louisiana.

Wattigney Information

The Department of Justice announced today that this June, 77,795 service members will begin receiving $60 million in compensation for having been charged excess interest on their student loans by Navient Corp., the student loan servicer formerly part of Sallie Mae.  The payments are required by a settlement that the department reached with Navient last year to resolve the federal government’s first ever lawsuit filed against owners and servicers of student loans for violating the rights of service members eligible for benefits and protections under the Servicemembers Civil Relief Act (SCRA).  The United States’ complaint in that lawsuit alleged that three defendants (collectively Navient) engaged in a nationwide pattern or practice, dating as far back as 2005, of violating the SCRA by failing to provide members of the military the 6 percent interest rate cap to which they were entitled for loans that were incurred before the military service began.  The three defendants are Navient Solutions Inc. (formerly known as Sallie Mae, Inc.), Navient DE Corporation (formerly known as SLM DE Corporation), and Sallie Mae Bank.

The settlement covers the entire portfolio of student loans serviced by, or on behalf of, Navient.  This includes private student loans, Direct Department of Education Loans, and student loans that originated under the Federal Family Education Loan (FFEL) Program.  Approximately 74 percent of the $60 million that is about to be distributed is attributable to private loans, 21 percent to loans guaranteed by the Department of Education and five percent to loans owned by the Department of Education.

The checks, which are scheduled to be mailed on June 12, 2015, will range from $10 to over $100,000, with an average of about $771.  Check amounts will depend on how long the interest rate exceeded 6 percent and by how much, and on the types of military documentation the service member provided.

In addition to the $60 million in compensation, the settlement contains several other key provisions.  It required Navient to pay the United States a civil penalty of $55,000.  Navient must also request that all three major credit bureaus delete negative credit history entries caused by the interest rate overcharges and improper default judgments.

The settlement also required Navient to streamline the process by which service members may notify Navient of their eligibility for SCRA benefits.  The revised process includes an SCRA online intake form for service members, and the availability of customer service representatives specially trained on the rights of those in military service.  

“This compensation will provide much deserved financial relief to the nearly 78,000 men and women who were forced to pay more for their student loans than is required under the Servicemembers Civil Relief Act,” said Acting Associate Attorney General Stuart F. Delery.  “The Department of Justice will continue using every tool at our disposal to protect the men and women who serve in the Armed Forces from unjust actions and illegal burdens.”

“We are pleased about how quickly we will be able to get this money back into the hands of the service members who were overcharged on their student loans while they were in military service,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “The department will continue to actively protect our service members and their families from such unjust actions.”

The department’s investigation of Navient was the result of a referral of service member complaints from the Consumer Financial Protection Bureau’s Office of Servicemember Affairs, headed by Holly Petraeus.  The Department of Justice worked closely with the department of Education during the investigation to ensure that aggrieved service members with federally owned and federally guaranteed student loans would be fully compensated, and be able to receive the SCRA benefit of a reduced 6 percent interest rate through a streamlined process going forward.  The Department of Education is now using a U.S. Department of Defense database to proactively identify borrowers who may be eligible for the lower interest rate under the SCRA, rather than requiring service members to apply for the benefit.

Beginning on June 12, service members with questions about their eligibility for monetary relief under the settlement should call (855) 382-6421.  Other service members and their dependents who believe that their SCRA rights have been violated should contact an Armed Forces Legal Assistance office.  To find the closest office, consult the military legal assistance office locator at http://legalassistance.law.af.mil and click on the Legal Services Locator.  Additional information about the Justice Department’s enforcement of the SCRA and the other laws protecting service members is available at www.servicemembers.gov.

Settlement Provides $9 Million in Compensation to African-American and Hispanic Borrowers

The Justice Department and Consumer Financial Protection Bureau (Bureau) filed a consent order today to resolve allegations that Provident Funding Associates (Provident) engaged in a pattern or practice of discrimination that increased loan prices for African-American and Hispanic borrowers who obtained residential mortgages between 2006 and 2011 from Provident’s nationwide network of mortgage brokers.

The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the Northern District of California.  The complaint alleges that Provident violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA) by charging thousands of African-American and Hispanic borrowers higher fees on mortgage loans not based on borrower risk, but because of their race or national origin.  Provident cooperated fully with the agencies’ investigation into its lending practices and agreed to settle this matter without contested litigation. 

“The Civil Rights Division is committed to ensuring that all types of lending institutions, including wholesale mortgage lenders, comply with the fair lending laws,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “We look forward to further collaboration with the Consumer Financial Protection Bureau in protecting consumers from illegal and discriminatory lending practices.”

“The settlement demonstrates this U.S. Attorney’s office will devote the resources necessary to root out and address unfair lending practices that affect citizens of this district,” said U.S. Attorney Melinda Haag of the Northern District of California.  “The law is clear: access to mortgage loans may not be made more difficult because of an applicant’s race or national origin.  We are glad that Provident has agreed to put an end to this practice without engaging in protracted litigation.” 

“Consumers should never be charged higher fees because of their race or national origin,” said Consumer Financial Protection Bureau Director Richard Cordray.  “We will continue to root out illegal and discriminatory lending practices in the marketplace.  I look forward to working closely with our partners at the Department of Justice to ensure consumers are treated fairly.”

The lawsuit originated from a 2011 referral by the Federal Trade Commission (FTC) to the Justice Department’s Civil Rights Division.  In 2012, the Bureau joined the Justice Department’s investigation.

Under the terms of the proposed settlement, Provident will pay $9 million into a fund for the benefit of victims of its alleged mortgage lending discrimination.  The proposed settlement provides for an independent administrator to contact and disburse payments to borrowers whom the agencies identify as victims of Provident’s discrimination, at no cost to the borrowers.  Provident will pay all costs and expenses of the administrator.  Borrowers who are eligible for compensation will be contacted by the administrator.  The department will make a public announcement and post contact information on its website once the administrator begins contacting victims.

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 39 lending matters under the Fair Housing Act, ECOA, and the Servicemembers Civil Relief Act.  The settlements in these matters provide over $1.2 billion in monetary relief for impacted communities and individual borrowers.  The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.

The Civil Rights Division, the U.S. Attorney’s Office for the Northern District of California, the Consumer Financial Protection Bureau, and the FTC are members of the Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  For more information on the task force, visit www.StopFraud.gov.

A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at http://www.justice.gov/fairhousing.

The Department of Justice today filed a complaint and settlement agreement in the district court of the Middle District of Alabama to protect prisoners at the Julia Tutwiler Prison for Women in Wetumpka, Alabama, from sexual victimization by correctional officers.  The agreement filed is designed to resolve the Justice Department’s findings of sexual abuse and sexual harassment at Tutwiler.

In January 2014, the Justice Department issued a findings letter concluding that Tutwiler subjects its women prisoners to a pattern and practice of sexual abuse in violation the Eighth Amendment of the U.S. Constitution.  The findings identified several systemic failures that led to the pattern of abuse, including ineffective reporting and investigations and no grievance policy.  Tutwiler also failed to hold culpable staff accountable for abuses. 

“Prisoners are entitled to be safe from sexual predation by staff, and to live in an environment free from sexual assault, sexual harassment and the constant fear of these abuses,” said the head of the Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta.  “Our agreement uses gender-responsive and trauma-informed principles designed to address and eliminate the culture of abuse that Tutwiler’s women prisoners have suffered from and endured for years.”

Alabama has already begun to put in place important reforms to address the department’s findings including the Governor’s creation of an agency-level position of Deputy Commissioner of Women’s Services.  Wendy Williams, Ed.D., has been appointed to the position, and is charged with implementing gender-responsive practices at Tutwiler and with leading long overdue culture change.  The department looks forward to continuing to work with the Warden, the Commissioner and the dedicated Tutwiler staff who will be part of the solution going forward. 

Alabama’s willingness to engage in this cooperative resolution also eliminates the expense of a protracted lawsuit and offers women immediate protections.  “We very much appreciate the state’s cooperation and willingness to work to bring about meaningful and sustainable change on these important issues,” said U.S. Attorney George L. Beck Jr. of the Middle District of Alabama. 

The agreement comprehensively addresses the causes of the abuses uncovered by the department’s investigation.  It draws upon gender-responsive, trauma-informed principles to build on the Prison Rape Elimination Act National Standards, which are designed to prevent, detect and respond to custodial sexual abuse and sexual harassment throughout our nation’s prisons and jails.  The agreement tailors the more generalized national standards to target the specific problems revealed at Tutwiler and to meaningfully address the harm to Tutwiler’s women prisoners.

The agreement requires Tutwiler to protect women from sexual abuse and sexual harassment by ensuring sufficient staff to safely operate Tutwiler and supervise prisoners, supplemented by a state-of-the-art camera system.  The agreement also provides safeguards to prevent staff from unnecessarily viewing prisoners who are naked or performing bodily functions.

Tutwiler must ensure that each prisoner knows of her right to be free from sexual abuse and harassment, and that each prisoner is aware of the several internal and external methods to report abuse, including a new grievance process.  Tutwiler will protect prisoners from the threat of retaliation by monitoring the housing, programming and disciplinary status of any prisoner who reports or alleges abuse.  Further, women who allege sexual abuse are entitled to unimpeded access to medical treatment and crisis intervention services.  

The agreement also has provisions directed toward staff including the requirement to   thoroughly train all staff on their duties to prevent, detect and respond to sexual abuse at Tutwiler.  Staff will also be trained on how to manage, interact and communicate appropriately with women prisoners and with their lesbian, gay, bisexual, transgender and gender nonconforming prisoners. 

The agreement requires that all sexual abuse and sexual harassment allegations are promptly, thoroughly and objectively investigated and appropriately referred for prosecutorial review, and that alleged victims are advised of the outcome of their allegations.  Tutwiler must also take appropriate disciplinary action against staff found to have engaged in sexual abuse or sexual harassment or to have violated Tutwiler’s sexual abuse and sexual harassment policies and procedures. 

Tutwiler will put in place a quality assurance program to track and analyze data to ensure that sexual abuse and harassment is being adequately prevented, detected and responded to.  Significantly, an independent monitor will evaluate Tutwiler’s progress towards meaningful reform and assist Tutwiler’s compliance efforts.  The agreement requires the monitor to provide compliance reports to the court every six months.

Tutwiler’s prisoners have already seen some changes implemented following the department’s investigation.  One current prisoner recently wrote to the Civil Rights Division to say, “[W]e thank [DOJ] for all you are doing and are looking forward to all the miraculous things to come.”

The investigation was conducted by the Civil Rights Division’s Special Litigation Section, with assistance from the U.S. Attorney’s Office of the Middle District of Alabama.  Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.   

The Department of Justice announced today that the following four banks reached a resolution under the department’s Swiss Bank Program:

• Société Générale Private Banking (Lugano-Svizzera)

• MediBank AG

• LBBW (Schweiz) AG

• Scobag Privatbank AG

“Today’s agreements reflect the Tax Division’s continued progress towards reaching appropriate resolutions with the banks that self-reported and voluntarily entered the Swiss Bank Program,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.  “The department is currently investigating accountholders, bank employees, and other facilitators and institutions based on information supplied by various sources, including the banks participating in this Program. Our message is clear – there is no safe haven.”

The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States.  Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.  Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

Under the program, banks are required to:

• Make a complete disclosure of their cross-border activities;

• Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;

• Cooperate in treaty requests for account information;

• Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;

• Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and

• Pay appropriate penalties.

Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.

According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay the penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.

Société Générale Private Banking (Lugano-Svizzera) SA (SGPB-Lugano) was established in 1974 and is headquartered in Lugano, Switzerland.  Through referrals and pre-existing relationships, SGPB-Lugano accepted, opened and maintained accounts for U.S. taxpayers, and knew that it was likely that certain U.S. taxpayers who maintained accounts there were not complying with their U.S. reporting obligations.  Since Aug. 1, 2008, SGPB-Lugano held and managed approximately 109 U.S.-related accounts, with a peak of assets under management of approximately $139.6 million, and offered a variety of services that it knew assisted U.S. clients in the concealment of assets and income from the Internal Revenue Service (IRS), including “hold mail” services and numbered accounts.  Some U.S. taxpayers expressly instructed SGPB-Lugano not to disclose their names to the IRS, to sell their U.S. securities and to not invest in U.S. securities, which would have required disclosure and withholding.  In addition, certain relationship managers actively assisted or otherwise facilitated U.S. taxpayers in establishing and maintaining undeclared accounts in a manner designed to conceal the true ownership or beneficial interest in the accounts, including concealing undeclared accounts by opening and maintaining accounts in the name of non-U.S. entities, including sham entities, having an officer of SGPB-Lugano act as an officer of the sham entities, processing cash withdrawals from accounts being closed and then maintaining the funds in a safe deposit box at the bank and making “transitory” accounts available, thereby allowing multiple accountholders to transfer funds in such a way as to shield the identity and account number of the accountholder.  SGPB-Lugano will pay a penalty of $1.363 million.

Created in 1979 and headquartered in Zug, Switzerland, MediBank AG (MediBank) provided private banking services to U.S. taxpayers and assisted in the evasion of U.S. tax obligations by opening and maintaining undeclared accounts.  In furtherance of a scheme to help U.S. taxpayers hide assets from the IRS and evade taxes, MediBank failed to comply with its withholding and reporting obligations, providing “hold mail” services and offering numbered accounts, thus reducing the ability of U.S. authorities to learn the identity of the taxpayers.  After it became public that the Department of Justice was investigating UBS, MediBank hired a relationship manager from UBS and permitted some of that person’s U.S. clients to open accounts at MediBank.  Since Aug. 1, 2008, MediBank had 14 U.S. related accounts with assets under management of $8,620,675.  MediBank opened, serviced and profited from accounts for U.S. clients with the knowledge that many likely were not complying with their U.S. tax obligations.  MediBank will pay a penalty of $826,000.

LBBW (Schweiz) AG (LBBW-Schweiz) was established in Zurich in 1995.  Since August 2008, LBBW-Schweiz held 35 U.S. related accounts with $128,664,130 in assets under management.  After it became public that the department was investigating UBS, LBBW-Schweiz opened accounts from former clients at UBS and Credit Suisse.  Despite its knowledge that U.S. taxpayers had a legal duty to report and pay tax on income earned on their accounts, LLB permitted undeclared accounts to be opened and maintained, and offered a variety of services that would and did assist U.S. clients in the concealment of assets and income from the IRS.  These services included following U.S. accountholders instructions not to invest in U.S. securities and not reporting the accounts to the IRS and agreeing to hold statements and other mail, causing documents regarding the accounts to remain outside the United States.  LBBW-Schweiz will pay a penalty of $34,000.

Headquartered in Basel, Switzerland, Scobag Privatbank AG (Scobag) was founded in 1968 to provide financial and other services to its founders, and obtained its banking license in 1986.  Since August 2008, Scobag had 13 U.S. related accounts, the maximum dollar value of which was $6,945,700.  Scobag offered a variety of services that it knew could assist, and that did assist, U.S. clients in the concealment of assets and income from the IRS, including “hold mail” services and numbered accounts.  Scobag will pay a penalty of $9,090.

In accordance with the terms of the program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations.  While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.

Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts.  On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement.  With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.

“These four additional bank agreements signal a change in terrain for offshore banking,” said Chief Richard Weber for the IRS-Criminal Investigation (CI).  “No longer is it safe to hide money offshore and expect that it will not be discovered. ‎ IRS CI Special Agents will continue to follow the money to find those who circumvent the offshore disclosure laws and hold them accountable.”

Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-CI and IRS’s Large Business and International Division for their substantial assistance, as well as Karen M. Quesnel, Sean P. Beaty, Gregory S. Seador, W. Damon Dennis and Brian D. Bailey, who served as counsel on these matters, and Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer of the Tax Division.

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

A former staff member of the U.S. Senate Committee on Commerce, Science and Transportation was charged by indictment in the Eastern District of Virginia with defrauding at least three women of approximately $500,000, announced Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia. 

The indictment charges Robert Lee Foster, 65, of De Pere, Wisconsin, with nine counts of wire fraud. 

According to the indictment, from 2008 through May 2015, Foster devised a scheme to fraudulently obtain money and property from at least three women, whom Foster targeted because of their age, health, marital or family status, or other personal circumstances.  The indictment alleges that Foster used his affiliation with the U.S. Senate to gain the victims’ trust and confidence, and that he made various false and fraudulent representations to the victims, which prompted them to send Foster money, which funds he then used for his own personal benefit. 

An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.

This case was investigated by the FBI.  The case is being prosecuted by Trial Attorneys Kevin Driscoll and Peter Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Jamar Walker of the Eastern District of Virginia.

Foster Indictment

WASHINGTON – El Departamento de Justicia y la Oficina Para la Protección Financiera del  Consumidor (CFPB, por sus siglas en inglés) (CFPB)  presentaron hoy una orden por consentimiento en resolución de alegatos de que Provident Funding Associates (Provident) exhibió un patrón o práctica de discriminación que aumentó los precios de los préstamos para prestatarios afroamericanos e hispanos que obtuvieron hipotecas residenciales entre el 2006 y el 2011 de la red nacional de corredores hipotecarios de Provident.

El acuerdo, que está sujeto a aprobación del tribunal, fue presentado junto con la demanda de las agencias en el Tribunal Federal de Distrito para el Distrito Norte de California.  La demanda alega que Provident violó la Ley de Vivienda Justa (FHA, por sus siglas en inglés) y la Ley de Igualdad de Oportunidades de Crédito (ECOA, por sus siglas en inglés) al cobrarles a miles de prestatarios afroamericanos e hispanos cargos más altos en préstamos hipotecarios, no basados en el riesgo que presentaba el prestatario, sino en su raza u origen nacional.  Provident cooperó plenamente con la investigación de las agencias sobre sus prácticas de otorgamiento de préstamos y aceptó realizar este acuerdo sin litigio contencioso. 

“La División de Derechos Civiles está comprometida a asegurar que todos los tipos de instituciones de préstamo, incluidos los prestatarios mayoristas de hipotecas, cumplan con las leyes de otorgamiento justo de préstamos”, dijo la Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta  de la División de Derechos Civiles.  “Nos complacerá seguir colaborando en el futuro con la Oficina Para la Protección Financiera del  Consumidor para proteger a los consumidores contra prácticas de otorgamiento de préstamos ilegales y discriminatorias".

“El acuerdo demuestra que esta Fiscalía Federal dedicará los recursos necesarios para acabar con las prácticas de otorgamiento injusto de préstamos que afectan a los ciudadanos de este distrito”, dijo la Fiscal Federal Melinda Haag del Distrito Norte de California.  “La ley es clara: el acceso a los préstamos hipotecarios no debe ser más difícil debido a la raza o el origen nacional del solicitante.  Nos complace que Provident haya aceptado poner fin a esta práctica sin la necesidad de un prolongado litigio.        

“Nunca se les debe cobrar cargos más altos a los consumidores debido a su raza u origen nacional”, señaló el Director de la Oficina Para la Protección Financiera del  Consumidor  Richard Cordray.  “Seguiremos erradicando las prácticas ilegales y discriminatorias en el otorgamiento de préstamos en el mercado.  Me complacerá trabajar estrechamente con nuestros asociados del Departamento de Justicia para asegurar que los consumidores reciban tratamiento justo”.

La demanda se originó de un referido en el 2011 por parte de la Comisión Federal de Comercio (FTC) a la División de Derechos Civiles del Departamento de Justicia. En el 2012,  CFPB se unió a la investigación realizada por el Departamento de Justicia.

Bajo los términos del acuerdo propuesto, Provident pagará 9 millones de dólares a un fondo en beneficio de las víctimas de la discriminación hipotecaria supuestamente cometida por Provident.  El acuerdo propuesto dispone que un administrador independiente contacte y realice los pagos a prestatarios identificados por las agencias como víctimas de discriminación por parte de Provident, sin ningún costo para los prestatarios.  Provident pagará todos los costos y gastos del administrador.  Los prestatarios que reúnan los requisitos para la compensación serán contactados por el administrador.  El Departamento realizará un anuncio público y publicará información de contacto en su portal de Internet una vez que el administrador comience a comunicarse con las víctimas.

La aplicación de las leyes de otorgamiento de préstamos justos del Departamento de Justicia es conducida por la Unidad de Préstamos Justos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles.  Desde su fundación en febrero del 2010, la Unidad de Préstamos Justos ha entablado o resuelto 39 casos de préstamos bajo la Ley de Vivienda Justa,  ECOA y la Ley de Alivio Civil para los Miembros de las Fuerzas Armadas (SCRA, por sus siglas en inglés) .  Los acuerdos en estos casos consistieron en más de 1.2 billones de dólares en compensación monetaria para comunidades afectadas y prestatarios individuales.  Los reportes anuales del Secretario de Justicia de los Estados Unidos al Congreso sobre la aplicación de ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications/.

La División de Derechos Civiles, la Fiscalía Federal del Distrito para el Distrito Norte de California, la Oficina Para la Protección Financiera del  Consumidor   y la FTC son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero.  El Presidente Obama estableció la Fuerza de Tarea Interagencial de Coacción contra el Fraude Financiero para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros.  Esta fuerza incluye a representantes de una amplia gama de agencias federales, autoridades reguladoras, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando juntos, aprovechan un poderoso espectro de recursos de coacción penal y civil.  La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar fondos para las víctimas de delitos financieros.  Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.

Para obtener una copia de la demanda, así como información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en http://www.justice.gov/fairhousing.

Three Detroit, Michigan, area residents pleaded guilty today in U.S. District Court for the Eastern District of Michigan to conspiracy to commit bank fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

According to court documents and statements, from approximately January 2006 to December 2008, Jason Najor, Jeffrey Najor, Joey Murad and others conspired to defraud financial lending institutions by providing fraudulent information on residential mortgage loan applications.  The defendants devised a scheme to purchase single-family homes for approximately $5,000 to $40,000 each, and then recruited straw buyers to submit fraudulent loan applications for home mortgages substantially above the original purchase price.  The applications falsified the straw buyers’ assets, income and down payment, among other things.  The straw buyers were paid fees for their participation, which were sometimes falsely disguised as “landscaping” or “construction” fees.  The conspirators made a substantial profit and paid themselves commissions on the sales.  Every home purchased and sold as part of the scheme went into foreclosure. 

In addition to the seven individuals indicted in the case, three of which pleaded guilty today, two others connected to the scheme have pleaded guilty.  One individual is a straw buyer of multiple properties who received substantial fees as part of the scheme.  The other individual is a mortgage broker who assisted in the preparation of the false mortgage loan applications.  Co-conspirator Wasseem Shamoun also pleaded guilty on Jan. 23 and was sentenced to 15 months in prison and ordered to pay $394,000 in restitution for his role in selling properties to straw buyers. 

The three defendants face a maximum statutory penalty of thirty years in prison and a fine of $1 million for conspiracy to commit bank fraud. Sentencing for Joey Murad and Jeffrey Najor is on Sept. 19 and Jason Najor is scheduled to be sentenced on Nov. 17.

Acting Assistant Attorney General Ciraolo commended the special agents of the FBI and IRS Criminal Investigation and the DEA, who investigated the case, and Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Tax Division, who are prosecuting the case.  Ciraolo also thanked the U.S. Attorney’s Office of the Eastern District of Michigan for their substantial assistance.

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

Today, a federal jury in Detroit convicted two members of the violent Phantom Outlaw Motorcycle Club, one of whom also was a member of the Vice Lords street gang, on separate crimes of conspiracy to commit murder in aid of racketeering, and assault with a dangerous weapon in aid of racketeering and a firearms offense.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Detroit Field Division and Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Division made the announcement.

“The dismantling of the Phantom Outlaw Motorcycle Club demonstrates how law enforcement authorities and community members can work hand-in-hand to combat gang violence across the nation,” said Assistant Attorney General Caldwell.  “In this case, law enforcement unquestionably saved lives by making a wave of arrests to prevent a planned nationwide campaign of violence against a rival motorcycle gang.  The verdict in this case holds violent gang members accountable for the destruction they inflicted and the havoc they intended to wreak.”

“The Detroit One initiative targets criminal gang members like these defendants, who are responsible for gun violence in neighborhoods,” said U.S. Attorney McQuade.  “We hope that removing dangerous trigger pullers will give our communities the peaceful quality of life we all deserve.”

“ATF works every day with our partners to take the most violent offenders off our streets and put them behind bars,” said Special Agent in Charge S. Robin Shoemaker.  “Without partnership, without standing up against the violence, no public safety issues can be solved.  ATF is committed to this fight, and committed to working together to keep our citizen safe and our communities livable.”

“The defendants in this case were active members of violent criminal groups, one of which was based in Detroit and operated across numerous, and sometimes distant, states,” said Special Agent in Charge Abbate.  “These convictions reflect our continuing resolve through interstate cooperation between federal, state and local law enforcement authorities to prevent violent crime regardless of how far its reach may extend.”

The jury convicted the defendants of the following offenses:

• Christopher Odum (aka Murder), 29, of Detroit, a member of the Detroit chapters of both the Phantoms and the Vice Lords, was convicted of conspiracy to commit murder in aid of racketeering.

• William Frazier (aka Daytona), 37, of Auburn Hills, the Vice President of the Pontiac, Michigan, chapter of the Phantoms, was convicted of two counts of assault with a dangerous weapon in aid of racketeering, and one count of using and carrying firearms during and in relation to a crime of violence.

The evidence showed that the Phantom Outlaw Motorcycle Club and its members were involved in a range of criminal activity including conspiracy to commit murder, shootings, robberies, extortion and the possession and sale of stolen vehicles and motorcycles.  The evidence also showed overlap between the leadership of the Phantoms and membership in the Vice Lords street gang, which assisted the Phantoms in various criminal endeavors, including searching for and violently attacking rivals of the Phantoms.

Specifically, the evidence at trial demonstrated that, on Oct. 27, 2012, at the Columbus, Ohio clubhouse of the Toros Motorcycle Club, a fight took place between the Phantoms and the Zulus Motorcycle Club, a rival gang.  During the fight, William Frazier, a Phantom member, shot two men.

The evidence at trial also showed that, on Sept. 8, 2013, Antonio Johnson, who was both the National President of the Phantoms and the “Three-Star General” over the Vice Lords in Michigan, ordered numerous Phantoms, including Christopher Odum, to rob the Satan Sidekicks Motorcycle Club, a rival motorcycle club.  During the attempted robbery, a Phantom member, Bryan Sorrell (aka PC) shot a Satan Sidekick member in the face.  A few days later, Odum and another Phantom violently assaulted a prospective member of the Satan Sidekicks during another attempted robbery at a gas station.

Additionally, according to the evidence presented at trial, Johnson blamed the Hell Lovers Outlaw Motorcycle Club for a September 2013 murder of a Phantoms member, and ordered retaliatory murders that were to be carried out in three phases.  In the first phase, the Phantoms were to murder at least three members of the Hell Lovers in Detroit in order to lure additional Hell Lovers to Michigan for the funeral.  In the second phase, the Phantoms were to murder all members of the Hell Lovers who would be at the Hell Lovers’ Detroit clubhouse following the funeral.  In the third phase, the Phantoms were to kill Hell Lovers in other cities throughout the country where the Phantoms had chapters.  In October 2013, ATF and FBI agents disrupted the mass murder plot.  At trial, the government presented evidence that, at the time that investigators disrupted the murder plot, the Phantoms were preparing for the first phase, including stockpiling firearms, conducting research and surveillance of their intended victims, and assigning Phantom members and Vice Lords members to stalk and murder the intended victims.  Odum participated in the murder plot. 

This was the second of two recent trials in the prosecution of the Phantoms.  On March 16, 2015, a jury convicted six leaders and members of the Phantoms, many of whom also were leaders and members of the Vice Lords, for various crimes, including the September – October 2013 murder plot against the Hell Lovers and the September 2013 shooting of the Satan Sidekicks member.  Among those six convicted defendants were Johnson and Marvin Nicholson, who was both the National Enforcer of the Phantoms and a member of the Vice Lords.  The charges included RICO conspiracy involving murder, conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, firearms offenses, and assault on federal officers.  In addition, four defendants previously have pleaded guilty to charges, including RICO conspiracy and assault with a dangerous weapon in aid of racketeering, and await sentencing.

The arrests in this case were made as part of the Detroit One Initiative, a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit, and through the lead efforts of the Comprehensive Violence Reduction Partnership Task Force, which consists of representatives of the ATF, Detroit Police Department, Michigan State Police, Michigan Department of Corrections and the FBI.  By working collaboratively, local, state and federal law enforcement are striving to maximize their ability to identify and arrest the persons and groups initiating the violence in Detroit.  These convictions are a tangible and significant result of this joint effort.

The case is being prosecuted by Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Louis Gabel of the Eastern District of Michigan.

The Justice Department reached an agreement today with Luis Esparza Services, Inc. (LES), a farm labor contractor company based in Bakersfield, California, resolving claims that the company discriminated against individuals because of citizenship status in violation of the Immigration and Nationality Act (INA).  This agreement contains the largest civil penalty the Justice Department has ever secured to resolve a discrimination claim under the INA.

The Justice Department’s investigation found that LES required work-authorized non-U.S. citizens to produce documents issued by the Department of Homeland Security as a condition of employment, but did not require the same of U.S. citizen workers.  The anti-discrimination provision of the INA prohibits employers from placing additional documentary burdens on workers during the employment eligibility verification process based on their citizenship status.

Under the settlement agreement, LES will pay $320,000 in civil penalties; compensate a worker who lost wages due to LES’s employment eligibility verification practices; undergo training on the anti-discrimination provision of the INA; revise its employment eligibility verification policies; and be subject to monitoring of its employment eligibility verification practices for three years.

“Creating unlawful discriminatory barriers that prevent work-authorized immigrants from working is unacceptable,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “The Justice Department is committed to removing these barriers and ensuring equal employment opportunities.”

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA.  Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation.  The case was handled by OSC Trial Attorney Adriana Vieco. 

For more information about 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 were subjected to: different documentary requirements based on their citizenship, immigration status, or national origin; or discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral, should contact the worker hotline above for assistance.

The United States filed a complaint to permanently bar a Louisville, Kentucky, man and his business, NJ Mobile Tax Service, LLC, from preparing federal income tax returns for others, the Justice Department announced today.

According to the complaint, which was filed in the U.S. District Court of the Western District of Kentucky, Napoleon L. Jackson has prepared federal income tax returns that improperly understated his customers’ income tax liabilities.  According to the suit, in a flyer for NJ Mobile, Jackson, offers to travel to his customers’ homes and prepare their tax returns.  The flyer invites potential customers to “Let me do the numbers & I’ll even come to you,” and boasts that “[Jackson] can increase your chances for a higher return.”

The complaint alleges that Jackson understated his customers’ federal tax liabilities by, among other things:

• Falsely claiming deductions related to home ownership for taxpayers that did not own homes, including cases where Jackson prepared and filed returns from customers’ rental homes;

• Falsely claiming dependents, including listing Jackson’s relatives, as dependents on a customer’s tax return;

• Fabricating charitable contributions, and offering to falsify letters from a church that indicated the customers contributed $5,500 in cash to the church that the customers had not in fact donated; and

• Falsely claiming education credits for taxpayers who were not entitled to them.

The Internal Revenue Service (IRS) audited 31 tax returns that Jackson prepared on behalf of 20 customers for tax years 2010 and 2011.  An examination of these 31 returns resulted in an increase in taxes owed for every return, according to the suit.  The complaint further alleges that Jackson prepared at least 162 returns from 2010 to 2011, and continues to prepare returns today.  Overall, the suit alleges that Jackson’s conduct may have cost the U.S. Treasury more than $800,000.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015.  The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters.  Information about these cases is available on the Justice Department’s website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Leon Nathan Davis, 37, of Augusta, Georgia, pleaded guilty earlier today to an information charging him with attempting to provide material support to a designated foreign terrorist organization, specifically the Islamic State of Iraq and the Levant (ISIL).

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Edward J. Tarver of the Southern District of Georgia and Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office made the announcement.  Davis pleaded guilty in federal court before U.S. District Court Judge J. Randal Hall of the Southern District of Georgia.

According to the testimony presented in court during the guilty plea proceeding, for more than a year, an FBI-led team investigated Davis’ attempts to join an overseas designated foreign terrorist organization.  Davis was arrested at the Atlanta Hartfield Airport in October 2014 on a parole violation, after he had purchased a ticket to fly to Turkey and then traveled from Augusta to the Atlanta Airport.  Davis has been in custody since his arrest.

Providing material support to a designated foreign terrorist organization is a crime punishable by up to 15 years in prison, a lifetime of supervised release and a $250,000 fine.  A sentencing hearing will be conducted after the U.S. Probation Office conducts a presentence investigation.

Assistant Attorney General Carlin joined U.S. Attorney Tarver in commending the FBI-led Joint Terrorism Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Georgia Board of Pardons and Paroles for their work on this case.  Assistant Attorney General Carlin and U.S. Attorney Tarver also expressed their gratitude to the U.S. Customs and Border Protection Service and the Atlanta Police Department for their contributions to the investigation.

The case is being prosecuted by the U.S. Attorney’s Office of the Southern District of Georgia and the Justice Department’s National Security Division.

Ashburn Resident Did Not Report More Than $720,000 Earned from Scheme

An Ashburn, Virginia resident was convicted today by a federal jury on 13 charges related to mortgage fraud, passing fictitious financial instruments, and tax fraud, the Department of Justice announced.

Charise Stone, 46, was indicted on April 15, 2014. According to court records and evidence at trial, Stone targeted distressed homeowners from 2007 to 2010 who owed more on their mortgage loan than the market value of the home with false promises of financial recovery. Stone acquired distressed homeowners’ properties in her own name or under entities she controlled, made false representations to mortgage lenders in order to induce approval of the short sales, and then re-sold the properties – often the same day or the next – to new buyers at a price above the short sale amount, in violation of agreements made with mortgage lenders.

Jose Marinay owned a settlement company that closed every short sale transaction for Stone. Marinay pleaded guilty to wire-fraud conspiracy on May 27, 2014. At his and Stone’s direction, fraudulent HUD-1 settlement statements were prepared to facilitate the transactions. Marinay destroyed some of the incriminating documents after closings. Financial institutions suffered losses of at least $2.2 million from the scheme. Stone profited more than $700,000 from these transactions but failed to file individual income tax returns. She also sent fictitious bonds to the IRS in an attempt to pay off her tax liability, and she sent fake international promissory notes to creditors purporting to satisfy her credit card debt as well as her mortgage loan.

Stone faces a maximum penalty of 20 years in prison for each of the wire fraud and wire-fraud conspiracy charges, 30 years in prison for the charges of false statements to a bank, 25 years in prison for the fictitious obligation charges, three years for the charge of corruptly impeding the internal revenue laws, and one year for each count of willful failure to file a tax return at her Aug. 14 sentencing. 

Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service -Criminal Investigation (IRS-CI) Washington, D.C. Field Office, made the announcement after the verdict was accepted by U.S. District Judge Claude M. Hilton.

This case was investigated by the FBI’s Washington Field Office and IRS-C I. Assistant U.S. Attorney Uzo Asonye and Assistant Chief Todd Ellinwood of the Tax Division are prosecuting the case.

Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-CR-127.

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

Orbit Medical Inc. and Rehab Medical Inc. will pay $7.5 million to resolve allegations that Orbit submitted false claims to federal health care programs for power wheelchairs and accessories, the Justice Department announced today.  Orbit Medical and Rehab Medical, a partial successor of Orbit, are durable medical equipment suppliers based in Salt Lake City, Utah and Indianapolis, Indiana, respectively.

“Power wheelchair suppliers must bill federal healthcare programs accurately and honestly to ensure that federal dollars are used for individuals who truly need these mobility devices,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Justice Department is committed to pursuing those who seek to abuse taxpayer-funded programs.”

Medicare pays for power wheelchairs for beneficiaries who cannot perform activities of daily living in their home using other mobility-assistance equipment, such as a cane, walker or power scooter.  To qualify for reimbursement, a physician must conduct a face-to-face examination of the beneficiary and provide the supplier with a written prescription for a power wheelchair within 45 days of such an encounter, along with documentation that supports the medical necessity of the device.  The prescription must be completed by the physician who performed the exam and must include the beneficiary’s name, the exam date, the diagnoses and conditions the wheelchair is expected to accommodate, the length of need and the physician’s signature. 

The settlement with Orbit Medical and Rehab Medical resolves allegations that Orbit sales representatives knowingly altered physician prescriptions and supporting documentation to get Orbit’s power wheelchair and accessory claims paid by Medicare, the Federal Employees Health Benefits Plan and the Defense Health Agency.  In particular, the government alleged that Orbit sales representatives changed or added dates to physician prescriptions and chart notes to falsely document that the prescription was sent to the supplier within 45 days of the face-to-face beneficiary exam; changed the physician prescription to falsely establish medical necessity for the power wheelchair or accessory; created or altered chart notes and other documents to falsely establish the medical necessity of the power wheelchair or accessory; forged physician signatures on prescriptions and chart notes; and added facsimile stamps to supporting documentation to make it appear as though the physician’s office had sent the documents to Orbit. 

“The resolution of this case helps to restore funds taken from the Medicare trust fund through the use of falsified records and billings,” said U.S. Attorney Carlie Christensen of the District of Utah.  “Taxpayers’ dollars paid for power wheelchairs not legitimately prescribed by a physician.  Health care fraud is aggressively prosecuted in Utah and every effort is made to restore government funds taken through such conduct.”

“Wheelchair schemes such as this divert Medicare funds meant to pay for legitimate health care, including providing wheelchairs for patients who have a genuine medical need for such equipment,” said Special Agent in Charge Gerald T. Roy of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).  “Our agency will continue to investigate those who attempt to cheat federal health care programs.”

The allegations resolved by the settlement with Orbit and Rehab were filed under the False Claims Act by two former Orbit employees, Dustin Clyde and Tyler Jackson.  Under the Act, a private party can sue for false claims on behalf of the government and share in any recovery.  Clyde and Jackson will receive approximately $1.5 million.  The whistleblowers’ suit also named as a defendant Jake Kilgore, the former vice president and sales manager at Orbit Medical for the Western region of the United States.  The United States intervened in that aspect of the suit on April 2, 2014, and today’s settlement does not resolve the pending claims against Kilgore.  Separately, on Oct. 23, 2013, a federal grand jury in Utah indicted Kilgore on three counts of health care fraud, three counts of false statements related to health care and three counts of wire fraud.  

Today’s 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 $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

This case was a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the District of Utah, HHS-OIG, the FBI, the Office of Personnel Management and the Defense Health Agency.  The lawsuit is captioned United States ex rel. Clyde et al. v. Orbit Medical et al., No. 2:10-CV-00297 (D. Utah). 

The claims settled by the government are allegations only; there has been no determination of liability.    

A Sandy, Utah, resident was sentenced today in U.S. District Court in Salt Lake City, Utah, to serve two years in prison for tax evasion, filing false claims for federal income tax refunds, and filing fictitious financial obligations with the U.S. government, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. 

Paul Ben Zaccardi was also ordered to pay restitution to the Internal Revenue Service (IRS) and to serve a four-year term of supervised release upon his release from prison.

“Pursuing and prosecuting individuals who refuse to comply with our nation’s tax laws and take affirmative steps to evade their obligations remains a top priority of the Tax Division,” said Acting Assistant Attorney General Ciraolo.  “Today’s sentence reflects what awaits those who engage in such criminal conduct.”

“Today’s sentencing of Paul Zaccardi again emphasizes the Internal Revenue Service and DOJ Tax Division’s aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation’s tax system,” said Special Agent in Charge John Collins of the IRS Criminal Investigation’s Las Vegas Field Office.  “Honest taxpayers have been reassured today that no one is above the law–especially when the integrity of the tax administration is at stake.”

On Oct. 29, 2014, Zaccardi pleaded guilty to the offenses charged in the superseding indictment, including one count of tax evasion, five counts of filing false claims for income tax refunds and three counts of filing fictitious obligations.  According to the superseding indictment and court documents, in April 2004, Zaccardi embarked on a scheme to evade the payment of his federal income taxes.  As part of that scheme and to avoid federal tax levies, Zaccardi transferred title to his residence to a nominee entity that he formed called Saved by Grace Christian Fellowship and caused his business receipts to be deposited into his wife’s bank account.

Zaccardi also presented five separate false tax returns to the IRS falsely claiming tax refunds totaling more than $1.5 million.  In addition, from June 2008 to October 2011, Zaccardi presented three separate fictitious financial instruments to the IRS, U.S. Department of the Treasury and the U.S. District Court of the District of Utah for a combined total of $605 million, to purportedly pay his federal income tax liabilities. 

Acting Assistant Attorney General Ciraolo commended the special agents of IRS Criminal Investigation, who investigated the case, and Trial Attorneys Stuart Wexler and Ryan Raybould of the Tax Division, who prosecuted the case.  She also thanked the U.S. Attorney’s Office of the District of Utah for their substantial assistance.

Additional information about the Tax Division’s national Tax Defier Initiative and its enforcements efforts in this area may be found on the division’s website. 

Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site at http://www.ustreas.gov/irs/ci/.

A criminal complaint has been unsealed in the Southern District of Texas following the arrest of a Spring, Texas, man on allegations he conspired to provide material support to the Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization.  

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Kenneth Magidson of the Southern District of Texas and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Division made the announcement.

Asher Abid Khan, 20, was taken into custody this morning without incident.  He is expected to make his initial appearance before U.S. Magistrate Judge Frances H. Stacy of the Southern District of Texas today.

The criminal complaint alleges that Khan and a friend devised a plan to travel to Turkey and on to Syria for the purpose of joining and waging jihad on behalf of ISIL.  Khan had allegedly asked a Turkish-based foreign terrorist fighter facilitator that “I wana join ISIS can you help?”  He also told someone else that “I wana die as a Shaheed [martyr],” according to the allegations.

Khan’s friend allegedly made it to Syria and ISIL with the assistance of Khan and the foreign terrorist fighter facilitator.  Khan had been living in Australia with a relative and made it to Istanbul, Turkey, where he was to meet up with his friend in their quest to join ISIL, according to the complaint.  However, Khan’s family sent him false information regarding his mother’s health and he was deceived into returning home to Texas.

If convicted, he faces up to 15 years in federal prison.  A conviction also carries a possible $250,000 fine.

A complaint is merely a formal charging document and is not evidence of guilt.  Every defendant is presumed innocent until and unless proven guilty. 

This case was investigated by the FBI’s Joint Terrorism Task Force.  The case is being prosecuted by Assistant U.S. Attorneys Carolyn Ferko and Alamdar Hamdani of the Southern District of Texas, as well as Trial Attorneys Josh Parecki and Keith Parrella of the National Security Division’s Counterterrorism Section.

Khan Criminal Complaint

Defendant Tried to Lure American Solders to a Compound in Afghanistan that Was Rigged with Explosives; Also Facilitated the Entry of an American Citizen into Al-Qaeda

Earlier today, Saddiq al-Abbadi, 40, a Yemeni national, pleaded guilty to conspiring to murder U.S. nationals abroad, providing and conspiring to provide material support to al-Qaeda and using a machine gun in furtherance of those crimes. 

The guilty plea was announced by Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington, D.C., Field Office.  Today’s guilty plea proceeding took place before U.S. District Court Judge Nicholas G. Garaufis of the Eastern District of New York.  At sentencing, al-Abbadi faces a maximum of life imprisonment.

“With the guilty plea entered today, Saddiq al-Abbadi will be held accountable for conspiring to kill Americans overseas and providing material support to al-Qaeda,” said Assistant Attorney General Carlin.  “Seeking to identify, thwart and hold accountable those who target U.S. citizens and interests around the world will remain a top priority of the National Security Division.”

“The defendant was a high-level al-Qaeda operative with ties to the terrorist group’s senior leadership in both Pakistan and Yemen,” said Acting U.S. Attorney Currie.  “He fought in battles against U.S. troops in Iraq and Afghanistan, tried to kill U.S. troops in Afghanistan by luring them to a compound rigged with explosives, and helped an American citizen gain entry to al-Qaeda.  We stand resolute in our commitment to bring to justice those who would try to harm members of our military or who assist al-Qaeda’s efforts to kill Americans at home or abroad.”

“With today’s guilty plea, Al-Abbadi admitted to directly supporting the mission of a designated terrorist organization through planning an operation designed to kill U.S. forces and for engaging in recruitment efforts on behalf of al-Qaeda,” said Assistant Director in Charge McCabe.  “This plea is due in no small part to the many FBI Special Agents, intelligence analysts, and linguists from the Washington and New York Field Offices as well as our interagency and international partners who spent countless hours investigating terrorism actors and al-Abbadi’s actions.  The FBI will not rest until we find and hold accountable those who provide support to terrorist groups and ensure that they are brought to justice.”

According to court filings, al-Abbadi traveled from his home country of Yemen to Iraq where, from approximately late 2005 through early 2007, he fought alongside al-Qaeda affiliated battalions against U.S. troops stationed in Iraq.

In early 2008, al-Abbadi traveled to the Federally Administered Tribal Areas (FATA) of Pakistan in order to fight for al-Qaeda in Pakistan and Afghanistan.  While in the FATA, al-Abbadi – who had longstanding ties to senior members of al-Qaeda’s Yemen-based affiliate known as al-Qaeda in the Arabian Peninsula (AQAP) – engaged directly with senior al-Qaeda leadership in Pakistan, including Sheikh Saeed al-Masri, the then-third ranking member of al-Qaeda.

During the late spring and summer of 2008, Al-Abbadi crossed from Pakistan into Afghanistan for the purpose of fighting and killing members of the U.S. military stationed in Afghanistan.  In June 2008, he planned an operation designed to lure U.S. forces to a compound in Ghazni, Afghanistan, that was rigged with explosives set to detonate upon their entry.  When U.S. forces arrived at the compound, they found rocket-propelled grenades and artillery rounds littered about.  One soldier observed wiring running from the exterior gate to the inside of the compound and recognized the trap.  The military evacuated and subsequently leveled the compound.

In addition to fighting against the U.S. military, al-Abbadi used his connections with al-Qaeda’s leadership to help U.S. citizen Bryant Neal Vinas gain entry into al-Qaeda.  Vinas had traveled to Pakistan from Long Island, New York, in the hopes of joining al-Qaeda and fighting against U.S. military forces in Afghanistan.  As a result of al-Abbadi’s assistance, Vinas was allowed to join al-Qaeda.  After participating in al-Qaeda’s military training program, Vinas developed a plan with senior al-Qaeda external operations leadership to conduct an attack on the Long Island Railroad in New York.  Vinas was arrested before he could carry out this attack.

Assistant Attorney General Carlin extended his grateful appreciation to the FBI.  The government’s case is being prosecuted by Assistant U.S. Attorneys Zainab Ahmad, Michael P. Canty and Douglas M. Pravda of the Eastern District of New York, with assistance provided by Trial Attorney Josh Parecki of the National Security Division’s Counterterrorism Section and by the Office of International Affairs.

The former owner of a Los Angeles-based medical supply company was sentenced today to seven years in prison for his role in a fraud scheme that resulted in $3.3 million in fraudulent claims to Medicare.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Los Angeles Region and Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office made the announcement.

Hakop Gambaryan, 55, of East Hollywood, California, was convicted following a jury trial on March 20, 2015, of four counts of health care fraud.  In addition to the prison sentence, U.S. District Court Judge Otis D. Wright II of the Central District of California ordered Gambaryan to pay $1,740,009 in restitution.

At trial, the evidence showed that Gambaryan, the former owner of a durable medical equipment supply company, fraudulently billed more than $3 million to Medicare for durable medical equipment, such as expensive power wheel chairs, that was not medically necessary.  Medicare paid approximately $1.7 million on those fraudulent claims.

The evidence demonstrated that between March 2006 and December 2012, Gambaryan paid cash kickbacks to medical clinics for fraudulent prescriptions for durable medical equipment, which the patients did not need.  Gambaryan then used these prescriptions to bill Medicare for the unnecessary equipment.

According to evidence presented at trial, Gambaryan personally delivered power wheelchairs to many beneficiaries who were able to walk without assistance.  In one instance, Gambaryan carried a power wheelchair up a flight of stairs for a woman who lived in a second floor apartment with no elevator.  In another instance, the power wheelchair would not fit inside the beneficiary’s home, so Gambaryan put it in the beneficiary’s garage.

The evidence also demonstrated that Gambaryan generated false documentation to support the fraudulent claims, including fake home assessments when no home assessments actually occurred.  In addition, Gambaryan photocopied beneficiaries’ signatures hundreds of times to create the appearance that the beneficiaries consented to ongoing equipment rentals, when they did not.  Indeed, at least two of the beneficiaries had passed away prior to the date they supposedly signed the rental agreements.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California.  The case was prosecuted by Trial Attorneys Fred Medick and Ritesh Srivastava of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.

The Justice Department today filed a lawsuit against the city of Beaumont, Texas, alleging violations of the Fair Housing Act and the Americans with Disabilities Act.  The lawsuit, filed in U.S. District Court for the Eastern District of Texas, charges that Beaumont discriminated against persons with disabilities based on its treatment of small group homes and companion care homes for persons with intellectual or developmental disabilities by applying overly-restrictive zoning and fire code restrictions that are not imposed on similarly-situated housing for persons who do not have disabilities.    

The suit seeks a court order prohibiting Beaumont from imposing a one-half mile spacing rule that effectively prohibits many small group homes and companion care homes from operating in Beaumont.  The suit further seeks to prohibit Beaumont from imposing unnecessary fire code requirements that exceed those mandated by the state of Texas, which regulates such homes.  The city’s excessive restrictions have prohibited numerous persons with intellectual or developmental disabilities from living in Beaumont and resulted in the institutionalization in a nursing home of a woman who was forced to move out of her home.  The suit also seeks monetary damages to compensate victims, as well as payment of a civil penalty.

This lawsuit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by persons with intellectual or developmental disabilities whose homes were closed and were threatened with closure under Beaumont’s challenged housing restrictions. 

“The Fair Housing Act and the Americans with Disabilities Act seek to ensure that individuals with disabilities can live in communities of their choice without facing discrimination,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “This lawsuit furthers our commitment to community inclusion for persons with disabilities.” 

“Fair housing practices for all Americans and certainly for individuals with disabilities is a keystone civil right and one which today’s legal action underscores,” said U.S. Attorney John Malcolm Bales of the Eastern District of Texas.  “We trust that the city of Beaumont will respond appropriately but the department and the U.S. Attorney’s office is prepared to take the necessary steps to insure that these rights are enforced.”

“Persons with disabilities should not be further limited in their housing options by overly restrictive codes and policies,” said HUD Assistant Secretary Gustavo Velasquez of Fair Housing and Equal Opportunity.  “HUD will continue to work with the Justice Department to support neighborhood-based choices for people with disabilities.”

Fighting illegal housing discrimination is a top priority of the Justice Department.  The Federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.  Title II of the Americans with Disabilities Act prohibits discrimination on the basis of disability by public entities.  Visit www.usdoj.gov/crt for more information about the Civil Rights Division and the laws it enforces.  Additional information about the Fair Housing Act is available at www.HUD.gov.  Additional information about the Americans with Disabilities Act is available at www.ADA.gov.

The United States Department of Justice and the City of Cleveland announced today that they have entered into a court enforceable agreement to address the department’s findings that the Cleveland Division of Police (CDP) engages in a pattern or practice of using excessive force in violation of the Fourth Amendment.  The agreement will create widespread reforms and changes within the CDP.  The changes focus on building community trust, creating a culture of community and problem-oriented policing, officer safety and training, officer accountability and technological upgrades.  Under the agreement, the parties will jointly select an independent monitor to assess and report whether the requirements of the agreement have been implemented for a term of at least five years.

“The Department of Justice is committed to ensuring that every American benefits from a police force that protects and serves all members of the community,” said Attorney General Loretta E. Lynch.  “The agreement we have reached with the city of Cleveland is the result of the hard work and dedication of the entire Cleveland community, and looks to address serious concerns, rebuild trust, and maintain the highest standards of professionalism and integrity.  I am pleased to have the full cooperation of law enforcement and city officials in this effort.  And I look forward to working with the entire community to build a stronger, safer Cleveland for residents and officers alike.”

The comprehensive agreement calls for:

• The creation of Community Police Commission, made up of ten representatives from across the community, and one representative each from the Cleveland Police Patrolmen’s Association, the Fraternal Order of Police and the Black Shield.
• CDP to reform use of force policies, including requirements for the use of de-escalation techniques whenever possible and appropriate, a prohibition on retaliatory force, mandatory reporting and investigation standards following use of force, and medical care for the subjects of force.
• CDP to integrate bias-free policing principles into all levels of the organization, including comprehensive training of officers and supervisors, which is to be developed with community input.
• CDP to create a Mental Health Response Advisory Committee and provide all officers with sufficient training to identify and appropriately respond to situations involving individuals in crisis.  CDP will develop a plan to ensure these specialized officers are always available to respond to calls related to those in mental-health crisis.
• CDP to improve officer training by ensuring that it reflects the needs of officers and that it is effective.
• CDP to improve equipment and resources available to officers following a comprehensive equipment and resource study to assess its current needs and priorities, including providing officers with functioning, up-to-date technology in their zone cars that allows them to access necessary information; safe zone cars; and first aid equipment.
• CDP to develop a recruiting policy and strategic recruitment plan that includes clear goals, objectives and action steps for attracting qualified applicants from a broad cross-section of the community. CDP will consult with the Community Police Commission and other stakeholders on strategies to attract a diverse pool of applicants.

“Today’s agreement reflects a commitment by the city and the Division of Police to work with the Department of Justice and the Cleveland community to transform this police agency into a model of community-oriented policing that will make both police officers and the people they serve safer,” said the head of the Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta.  “Constitutional policing is key to building trust between police departments and the communities they serve.  Today, Cleveland demonstrates to the rest of the country that people can come together across perceived differences to realize a common vision of a safer, more just city."

“For the past days and months the nation has looked toward Cleveland as we have grappled with difficult issues involving police-community relations,” said U.S. Attorney Steven M. Dettelbach of the Northern District of Ohio.  “Today, the nation should look this city for an example of what true partnership and hard work can accomplish – a transformational blueprint for reform that can be a national model for any police department ready to escort a great city to the forefront of the 21st Century.  But the hard work is just beginning, and we will need the committed partnership of this entire community to turn today’s promise into tomorrow’s reality.”

The agreement addresses the conclusions announced in December 2014 of a comprehensive investigation into the CPD started in March 2013 which assessed use of force practices of the CDP.  The investigation concluded that there was reasonable cause to believe that Cleveland police officers engage in a pattern or practice of unreasonable and in some cases unnecessary force in violation of the Fourth Amendment of the Constitution.  That pattern or practice included the unnecessary and excessive use of deadly force, including shootings and head strikes with impact weapons; the unnecessary, excessive or retaliatory use of less lethal force including Tasers, chemical spray and fists; excessive force against persons who are mentally ill or in crisis, including in cases where the officers were called exclusively for a welfare check; and the employment of poor and dangerous tactics that place officers in situations where avoidable force becomes inevitable.

The investigation also found that this pattern of excessive force has eroded public confidence in the police.  As a result, public safety suffers and the job of delivering police services was more difficult and more dangerous.  The investigation was conducted jointly by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the Northern District of Ohio.

A Carmel, Indiana, resident pleaded guilty today to perjury today in the U.S. District Court in Cleveland, Ohio, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, and U.S. Attorney Steven M. Dettelbach of the Northern District of Ohio. 

According to the indictment, court documents and statements made at the court proceeding, Alexander Krivozus committed perjury by testifying falsely during the course of a federal grand jury investigation of Cleveland resident, Edward Gurary, who ultimately pleaded guilty in March 2011 to one count of filing a false income tax return on which he wilfully failed to report his Swiss bank accounts.  As part of the investigation, bank records indicated that Gurary directed UBS AG to wire funds from his undeclared Swiss bank account, which was held in the name of a nominee Bahamian entity, and requested that confirmations of the transfers be sent to a U.S. fax number in the (317) area code.  The investigation established that the fax number was associated with Krivozus.  He was subpoenaed to testify before the federal grand jury and testified falsely. 

Krivolus faces a statutory maximum sentence of five years in prison and a $250,000 fine for the perjury offense.  A sentencing date has not yet been scheduled.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Dettelbach commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorney Richard M. Rolwing of the Tax Division and Assistant U.S. Attorney Robert Patton of the Northern District of Ohio, who are prosecuting the case. 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website. Additional information about tax fraud schemes to watch out for may be found on the IRS-Criminal Investigation website.

A Colombian national who recently was extradited from Mexico, pleaded guilty today in federal district court in Dallas, to conspiracy to launder monetary instruments, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting Administrator Chuck Rosenberg of the Drug Enforcement Administration.

Tito Miller Parra-Isaza, 45, a Colombian national, entered his guilty plea before U.S. Magistrate Judge Renee H. Toliver of the Northern District of Texas.  He will be sentenced at a later date.

According to a factual stipulation filed with the court, Parra-Isaza’s role in the conspiracy was to coordinate the deposit of bulk cash, which he knew to be the proceeds of drug smuggling, into financial institutions in Mexico and elsewhere.  In furtherance of the conspiracy, this bulk cash was later wire transferred to bank accounts in Dallas.  The funds then were  transported to Panama and elsewhere to distribute to individuals involved in drug smuggling.

Two other defendants charged in this case previously entered guilty pleas.  Of the remaining charged defendants, one is in Mexican custody, two are fugitives and one is deceased.

This case is being investigated by the DEA.  The case is being prosecuted by Trial Attorneys Mark Irish and Nicole Grosnoff of the Criminal Division’s Asset Forfeiture and Money Laundering Section.  The Criminal Division’s Office of International Affairs also has provided substantial assistance. 

Parra-Isaza Plea Agreement

WASHINGTON – El Departamento de Justicia de los Estados Unidos y la Ciudad de Cleveland anunciaron hoy que han realizado un acuerdo exigible judicialmente en resolución de los hallazgo por parte del Departamento de que la División de Policía de Cleveland [Cleveland Division of Police (CDP)] exhibe un patrón o una práctica de uso de fuerza excesiva en violación de la Cuarta Enmienda.   El acuerdo creará reformas y cambios amplios en el ámbito de la CDP.  Los cambios se centran en conquistar la confianza de la comunidad, y crear una cultura de servicio policial, seguridad y la capacitación de los agentes dirigida a los problemas y la comunidad, la responsabilización de los agentes y mejoras en tecnologías.  Según el acuerdo, las partes seleccionarán en conjunto a un monitor independiente que evalúe e informe si se han implementado las exigencias del acuerdo por un período de al menos cinco años.

“El Departamento de Justicia se empeña en asegurar que cada ciudadano de los Estados Unidos disfrute de los beneficios de una fuerza policial que protege y sirve a todos los miembros de la comunidad”, señaló la Secretaria de Justicia Loretta E. Lynch.  “El acuerdo que hemos realizado con la ciudad de Cleveland es el resultado de arduo trabajo y  dedicación de toda la comunidad de Cleveland, y busca resolver inquietudes graves, reconquistar la confianza y mantener los más altos estándares de profesionalismo e integridad.  Me complace contar con la plena colaboración de las fuerzas del orden público y las autoridades municipales en esta iniciativa.  Y me complacerá trabajar con toda la comunidad en crear un Cleveland más fuerte y más seguro tanto para residentes como para agentes”.

El acuerdo integral exige:

• La creación de una Comisión de Policía Comunitaria, compuesta por diez representantes de la comunidad y un representante de la Asociación de Patrulleros Policiales de Cleveland (Cleveland Police Patrolmen’s Association), el sindicato Fraternal de Orden Policial y Black Shield.
• La CDP reformará el uso de políticas del uso de fuerza, lo que incluye exigencias de uso de técnicas de desintensificación, siempre que corresponda y sea posible, la prohibición del uso de fuerza como represalia, la emisión obligatoria de informes y estándares para la investigación de casos de uso de fuerza, y atención médica para las personas objeto de la fuerza.  
• La CDP integrará principios de acción policial libres de parcialidad en todos los niveles de la organización, lo que incluye la capacitación integral de agentes y supervisores a ser desarrollada con opiniones de la comunidad.
• La CDP creará un Comité Asesor de Respuesta a Problemas de Salud Mental y esta proporcionará a los agentes la suficiente capacitación para identificar y responder adecuadamente a situaciones relacionadas con personas en crisis de salud mental.  La CDP desarrollará un plan para asegurarse de que estos agentes especializados estén siempre disponibles para responder a llamadas relacionadas con personas en crisis de salud mental.
• La CDP mejorará la capacitación de los agentes al asegurarse de que refleje las necesidades de los agentes y que esta sea eficaz.
• La CDP mejorará los equipos y recursos disponibles para los agentes después de realizar un estudio integral de equipos y recursos para evaluar sus necesidades y prioridades actuales. Esto incluye el suministro de tecnología actualizada y funcional en sus carros de zona, que les permita acceso a información necesaria; carros de zona seguros y equipos de primeros auxilios.
• La CDP desarrollará una política de reclutamiento y un plan estratégico de reclutamiento que incluya metas, objetivos y pasos de acción claros para atraer a candidatos calificados de un amplio espectro de la comunidad. La CDP consultará a la Comisión de Policía Comunitaria y otras partes interesadas acerca de estrategias para atraer a un grupo diversificados de candidatos.

“El acuerdo de hoy refleja el compromiso de la ciudad y de la División de Policía de trabajar con el Departamento de Justicia y la comunidad de Cleveland en transformar a esta repartición policial en un modelo de acción policial con orientación comunitaria que permitirá una mayor seguridad tanto de los agentes de la policía como de las personas a las que sirven”, señaló la líder de la División de Derechos Civiles, la Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta.  “La acción policial constitucional es clave para la creación de confianza entre las comisarías y las comunidades a las que sirven.  Hoy, Cleveland demuestra al resto del país que las personas pueden unirse en sus diferencias percibidas para realizar una visión común de una ciudad más segura y más justa”.

“En los últimos días y meses, la nación ha observado a Cleveland en nuestra resolución de problemas complejos relacionados con las relaciones entre la policía y la comunidad”, observó el Fiscal Federal Steven M. Dettelbach del Distrito Norte de Ohio.   “Hoy, la nación debe considerar a esta ciudad un ejemplo de lo que el verdadero trabajo arduo conjunto puede lograr: un proyecto transformativo de reforma que puede ser un modelo nacional para cualquier comisaría lista para acompañar a una gran ciudad a la vanguardia del siglo 21.  Sin embargo, el trabajo arduo recién comienza y necesitaremos el compromiso del trabajo conjunto de toda la comunidad para transformar a la promesa de hoy en la realidad de mañana”.

El acuerdo se ocupa de los hallazgos anunciados en diciembre de 2014, de una investigación integral de la CPD iniciada en marzo de 2013, que evaluó el uso de prácticas de uso de fuerza por parte de la CDP.  La investigación concluyó que hubo causas razonables para creer que los agentes policiales de Cleveland ejercían un patrón o una práctica de fuerza irrazonable y, en algunos casos, innecesaria, en violación de la Cuarta Enmienda de la Constitución.  Dicho patrón o práctica incluyó el uso innecesario o excesivo de fuerza letal, que incluyó disparos y golpes en la cabeza con armas de impacto; el uso innecesario, excesivo o en represalia de fuerza menos letal, incluidos Tasers, rosear químicos y fuerza física; fuerza excesiva contra personas con deficiencia mental o en crisis, que incluyó casos en los que se llamó a los agentes exclusivamente para una verificación del bienestar, y el empleo de tácticas ineficientes y peligrosas que colocaron a agentes en situaciones en las que la fuerza evitable se volvió inevitable.

La investigación también encontró que este patrón de fuerza excesiva desgastó la confianza pública en la policía.   Como resultado de esto, afectó la seguridad pública y la tarea de prestar servicios policiales resultó más difícil y peligrosa.  La investigación fue llevada a cabo conjuntamente por la Sección de Litigios Extraordinarios de la División de Derechos Civiles y la Fiscalía Federal para el Distrito Norte de Ohio.

# # #

Download Cleveland Complaint (32.66 KB)
Download Cleveland Joint Motion and Memo for Entry of Consent Decree (26.98 KB)
Download Cleveland Settlement Agreement (21.39 MB)
Download SPL Police Accomplishments 5.26.15 (212.23 KB)
Download Cleveland Division of Police 5.26.15 (180.2 KB)
Resumen del Acuerdo de Conciliación con la Ciudad de Cleveland Hacerca de la División de Policía de Cleveland (103.08 KB)

Statement from Vanita Gupta, head of the Justice Department’s Civil Rights Division, U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio and Special Agent in Charge Stephen D. Anthony for the FBI:

“The U.S. Attorney's Office, the Federal Bureau of Investigation and the Civil Rights Division of the Department of Justice have been monitoring the extensive investigation that has been conducted around the events of Nov. 29, 2012.  We will now review the testimony and evidence presented in the state trial.  We will continue our assessment, review all available legal options and will collaboratively determine what, if any, additional steps are available and appropriate given the requirements and limitations of the applicable laws in the federal judicial system.  This review is separate and distinct from the Civil Rights Division and U.S. Attorney's Office's productive efforts to resolve civil pattern and practice allegations under 42 U.S.C. 14141 with the city of Cleveland.”

Two Mecklenberg County, North Carolina, residents were indicted yesterday in Charlotte, North Carolina, with conspiracy to defraud the United States and filing false, fictitious or fraudulent claims, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney Jill W. Rose of the Western District of North Carolina.

Daniel Heggins and Joan Clark were charged with one count of conspiracy to defraud the United States and 16 counts of filing false, fictitious or fraudulent claims for federal income tax refunds.  According to the allegations in the indictment, beginning no later than July 2009 and continuing through May 2011, Heggins and Clark operated Guarantor Manufacturer Inc., which advertised consulting, investing, debt reduction, and foreclosure avoidance services.  Heggins and Clark recruited individuals who owed debts, such as mortgages or car loans, and used their information to file false federal income tax returns with fraudulent claims for tax refunds.

Heggins and Clark prepared false tax returns by attaching false Internal Revenue Service (IRS) Forms 1099-Original Issue Discount (OID) to the returns.  Certain taxpayers file Forms 1099-OID because taxes owed to the IRS on certain bonds must be reported annually and paid as interest accrues.  Heggins and Clark intentionally mischaracterized the debts owed by improperly using Forms 1099-OID to report debts as interest income to the individuals.  As a result, the false tax returns claimed refunds based on fictitious tax withholdings from that purported interest income.  Heggins and Clark filed at least 16 false tax returns that fraudulently claimed more than $4 million in tax refunds.

If convicted, Heggins and Clark each face a statutory maximum sentence of five years in prison and a maximum fine of $250,000 on each count.

Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation and the FBI, who investigated the case, and Assistant U.S. Attorney Michael Savage of the Western District of North Carolina and Trial Attorney Todd P. Kostyshak of the Tax Division, who are prosecuting the case.

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceeding.

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

Daniel Heggins and Joan Clark Indictment

Two California men, one of whom attempted to travel to the Middle East to allegedly join ISIL, have been arrested on charges of conspiring to provide material support to the designated foreign terrorist group the Islamic State of Iraq and the Levant (ISIL), announced Assistant Attorney General for National Security John P. Carlin and Acting U.S. Attorney Stephanie Yonekura of the Central District of California.

Muhanad Badawi, 24, and Nader Elhuzayel, 24, both of Anaheim, California, were arrested late Thursday afternoon by the FBI.  Badawi and Elhuzayel were charged in a criminal complaint filed today in U.S. District Court of the Central District of California, and both men are expected to make their initial court appearance this afternoon.

The affidavit in support of the criminal complaint outlines a scheme in which Badawi and Elhuzayel used social media to discuss ISIL and terrorist attacks, expressed a desire to die as martyrs and made arrangements for Elhuzayel to leave the United States to join ISIL.

According to the affidavit, on May 3, 2015, Elhuzayel saw a tweet from Elton Simpson, one of the two gunmen who were killed trying to attack a conference in Garland, Texas.  In this tweet, Simpson stated that he and his “bro” had pledged allegiance to the leader of ISIL.  In response, Elhuzayel tweeted his support for the attempted attack and praised Simpson as a “martyr.”

In recorded conversations last month, Badawi and Elhuzayel “discussed how it would be a blessing to fight for the cause of Allah, and to die in the battlefield,” and they referred to ISIL as “we.” When Badawi expressed concerns about ISIL struggling due to airstrikes by Coalition forces, Elhuzayel responded that they had to be patient and “can you imagine when al-Qaeda joins with Islamic State”?  According to the affidavit, Badawi responded: “We will be huge.”  The two men also discussed local Muslim leaders and Elhuzayel complained that these leaders were not “legitimate” because they believed in democracy and were not fighting for an Islamic State.

The men discussed where in the Middle East they would rather be, and Elhuzayel said he wanted to fight and did not want to be in the United States, according to the conversations recounted in the affidavit.

On May 7, Badawi allowed Elhuzayel to use his credit card to purchase a one-way airline ticket for travel from Los Angeles to Tel Aviv, Israel, via Istanbul, Turkey, on a Turkish Airlines flight scheduled to depart on May 21.  Badawi indicated that he would be traveling to the Middle East in the future, according to the affidavit.

Elhuzayel was arrested at Los Angeles International Airport.  According to the allegations in the complaint, Elhuzayel admitted after being read Miranda rights that he planned to disembark in Istanbul to join ISIL and did not intend to travel on to Israel.

If convicted of the charge in the criminal complaint, Badawi and Elhuzayel each would face a statutory maximum sentence of 15 years in prison for conspiring to provide material support to ISIL.

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

The investigation in this case was conducted by members of the FBI’s Joint Terrorism Task Force in Orange County, California.

Badawi and Elhuzayel Criminal Complaint

A federal jury in Oklahoma City today convicted two Texas men and a California man for their participation in a racketeering conspiracy involving illegal gambling and money laundering, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Sanford C. Coats of the Western District of Oklahoma.

Rodger Bramley, 73, of Plano, Texas, Kelley Diebner, 43, of Houston, Texas, and Leon Moran Jr. 54, of Kingsburg, California, were found guilty of racketeering conspiracy, conducting an illegal gambling business and money laundering conspiracy.  A sentencing hearing has not yet been set.

According to evidence presented at trial, from 2003 to 2013, Bramley, Diebner and Moran conspired with others to operate an international criminal enterprise known as Legendz Sports, which ran internet and telephone gambling services from Panama City, Panama.  Legendz Sports took in more than $1 billon in illegal wagers, almost exclusively from gamblers in the United States betting on American sporting events.  Bramley and Diebner worked as bookies in Texas who illegally solicited and accepted sports wagers as well as settled gambling debts.

Evidence further showed that Moran worked as a runner who delivered and picked up cash to Legendz Sports bookies.  As part of the racketeering conspiracy, bookies and runners for Legendz Sports transported millions of dollars of gambling proceeds in cash and checks from the United States to Panama.  The checks were made out to various shell companies created by Legendz Sports throughout Central America.

The case was investigated by the FBI and Internal Revenue Service-Criminal Investigation, with the assistance of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Marshals Service.

The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Susan Dickerson Cox and Travis D. Smith of the Western District of Oklahoma.

A Detroit-area neurosurgeon pleaded guilty today in two separate criminal cases that resulted in serious bodily injury to his patients and more than $11 million in Medicare, Medicaid and private insurance companies.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Service Office of Inspector General (HHS-OIG), Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Los Angeles Region and Special Agent in Charge Marlon Miller of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Detroit Field Office made the announcement.

“Disregarding his Hippocratic oath to do no harm, Dr. Sabit enriched himself by performing unnecessary, invasive spinal surgeries and implanting costly and unnecessary medical devices, all at the expense of his patients’ health and welfare,” said Assistant Attorney General Caldwell.  “Doctors who sell their medical judgment and ethics for personal profit endanger the lives and safety of vulnerable patients who count on their advice to make life-altering decisions.  The Criminal Division of the Department of Justice will continue to prioritize the prosecution of doctors whose criminal behavior puts patients at risk.”

“This case of health care fraud is particularly egregious because Dr. Sabit caused serious bodily injury to his patients by acting out of his own greed instead of the best interests of his patients,” said U.S. Attorney McQuade.  “Not only did he steal $11 million in insurance proceeds, but he also betrayed his trust to patients by lying to them about the procedures that were medically necessary and that were actually performed.”

Aria O. Sabit, M.D., 39, of Birmingham, Michigan, entered his guilty pleas in both criminal cases at a hearing before U.S. District Judge Paul D. Borman of the Eastern District of Michigan.  Sabit pleaded guilty to four counts of health care fraud, one count of conspiracy to commit health care fraud and one count of unlawful distribution of a controlled substance, resulting in losses to Medicare, Medicaid and various private insurance companies.  A sentencing hearing is scheduled for Sept. 15, 2015.

According to court documents, Sabit was a licensed neurosurgeon who owned and operated the Michigan Brain and Spine Physicians Group with various locations in the Eastern District of Michigan, including Southfield, Michigan, Clinton Township, Michigan, and Dearborn, Michigan, which opened in approximately April 2011.

During his guilty plea today, Sabit admitted that he derived significant profits by convincing patients to undergo spinal fusion surgeries with instrumentation (meaning specific medical devices designed to stabilize and strengthen the spine), which he never rendered, and subsequently billing public and private healthcare benefit programs for those fraudulent services.

Sabit further admitted he operated on patients and dictated in his operative reports—that he knew would later be used to support his fraudulent insurance claims—that he had performed spinal fusion with instrumentation, which he never performed.  This invasive surgery caused serious bodily injury to the patients.  Sabit admitted that his operative reports and treatment records contained false statements about the procedures performed, and the instrumentation used in the procedures.  Sabit also admitted that, on occasion, he would implant cortical bone dowels and falsely dictate in his operative reports that he had implanted instrumentation.  Sabit, then fraudulently billed public and private health care programs for instrumentation, when in fact the implants were tissue.  Sabit admitted he failed to render services in relation to lumbar and thoracic fusion surgeries, including in certain instances, billing for implants that were not provided.

Sabit also admitted that, prior to moving to Michigan, he was a resident of Ventura, California, and a licensed neurosurgeon in California.  He admitted that in approximately February 2010, he became involved with Apex Medical Technologies LLC (Apex) while he was on the staff of a California hospital.

Apex was owned by another neurosurgeon and three non-physicians who operated Apex as a physician-owned distributorship and paid neurosurgeons lucrative illegal kickbacks tied directly to the volume and complexity of the surgeries that the surgeons performed, and the number of Apex spinal implant devices the surgeons used in their spine surgeries.

In exchange for the opportunity to invest in Apex and share in its profits, Sabit admitted that he agreed to convince his hospital to buy spinal implant devices from Apex and use a sufficient number of Apex spinal implant devices in his spine surgeries.  Sabit further admitted that he and Apex’s co-owners used Apex to operate an illegal kickback scheme.  In doing so, they concealed Sabit’s involvement in Apex from outsiders.  Sabit then required the hospitals and surgical centers where he and his fellow neurosurgeon performed surgeries to purchase spinal implant devices from Apex.

Sabit admitted that his involvement in Apex, and the financial incentives provided to him by Apex and his co-conspirators, caused him to compromise his medical judgment and cause serious bodily injury to his patients by performing medically unnecessary spine surgeries on some of the patients in whom he implanted Apex spinal implant devices.  Sabit admitted that on a few occasions, the money he made from using Apex spinal implant devices motivated him either to refer patients in for spine surgery who did not medically need surgery or refer his patients for more complex surgeries, such as multi-level spine fusions, that they did not need.

Sabit also admitted that the financial incentives provided to him by Apex and his co-conspirators caused him to “over instrument” his patients (meaning Sabit used more spinal implant devices than were medically necessary to treat his patients) in order to generate more sales revenue for Apex, which resulted in serious bodily injury to his patients.

The Michigan case was investigated by the FBI, HHS-OIG and ICE.  The California case—which was subsequently transferred to the Eastern District of Michigan—was investigated by the FBI and HHS-OIG.  The Michigan case is being prosecuted by Assistant U.S. Attorneys Regina R. McCullough and Philip A. Ross of the Eastern District of Michigan.  The California case was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan, and is being prosecuted by Senior Trial Attorney Jonathan T. Baum and Trial Attorneys Dustin Davis and Blanca Quintero of the Criminal Division’s Fraud Section.

Sabit is also a defendant in two civil False Claims Act cases brought by the Department of Justice in the U.S. District Court of the Central District of California.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The Department of Justice issued agency-wide policy guidance today on the use of Unmanned Aircraft Systems (UAS) that sets standards of use and management controls of UAS by the department and its components.

UAS are used at times by law enforcement agencies as cost-effective, efficient and potentially life-saving tools to support public safety efforts.  The policy highlights protections of privacy, civil rights and liberties and makes clear that UAS use must be consistent with the protections afforded by the U.S. Constitution.  Justice Department components are barred from using UAS solely for the purpose of monitoring activities protected by the First Amendment, and components can only operate UAS on properly authorized investigations and activities.  The collection, retention and dissemination of information collected by UAS is also subject to Privacy Act protections.

To ensure accountability, the department will also require that personnel operating UAS are appropriately trained and supervised, including but not limited to a mandatory training on the department’s policies.  Annual privacy reviews will be conducted to ensure compliance with the department policy, existing laws and regulations and to identify potential privacy risks.

The guidance issued today is a result of various discussions and research – and meetings will continue to be held at least twice a year to ensure that the department strikes the appropriate balance between its law enforcement and national security missions and respect for civil rights and civil liberties.

Justice Department UAS Policy

Last night, the United States District Court for the Western District of Louisiana approved a comprehensive consent order filed by the Justice Department, the Avoyelles Parish School Board, and private plaintiffs in United States v. Avoyelles Parish School Board.  The consent order requires the school district to implement remedies in student assignment and discipline to complete the desegregation of the Avoyelles Parish school system.

The Avoyelles Parish School Board serves 5,400 students and has been operating under a continuing duty to desegregate its schools since 1967. 

The court retained jurisdiction over the case to ensure that the school board fully implements the relief required by the consent order and complies with applicable federal law.  The district may move for dismissal of the case if it successfully complies with the consent order for three years, during which time the school board must:

• Implement a new student assignment and transfer policy, including better address verification measures;

• Adopt a uniform admission process for the school system’s charter school along with a rigorous publicity and outreach program directed toward African-American students;

• Strengthen advertising and marketing of the New Tech magnet program, which is located at a majority African-American high school;  

• Conduct a comprehensive study to determine whether a magnet program can be established at a racially identifiable African-American elementary school, and take proactive steps to encourage white students to transfer to the school;

• Ensure classes within schools are desegregated; 

• Revise discipline policies to reduce racial disparities in the use of exclusionary discipline and expand the school board’s positive behavior interventions and supports program; and

• Hire an experienced consultant to monitor and report annually on the school board’s efforts to comply with the consent order. 

“The Avoyelles Parish School Board’s unanimous vote to approve the consent order reflects our shared goal of securing equal educational opportunities for all students,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “We are confident that this agreement will bring meaningful progress, and we look forward to working closely with the School Board over the next three years to bring this case to a successful close.”

“My office is committed to ensuring that this district’s schools provide all students with equal educational opportunities,” stated U.S. Attorney Stephanie A. Finley of the Western District of Louisiana. “I applaud the Avoyelles Parish School Board for its efforts to eliminate the effects of state-mandated segregation. It is our goal to assist in any way possible so that the Consent Order will work to provide all students in Avoyelles Parish with a quality education, a safe and fruitful learning environment, and academic offerings to help them achieve their dreams.”

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

A sergeant with the U.S. Army was sentenced today to 51 months in prison for accepting bribes from Afghan truck drivers at Forward Operating Base (FOB) Gardez in Afghanistan, in exchange for allowing the drivers to take thousands of gallons of fuel from the base for resale on the black market, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.

James Edward Norris, 41, of Fort Irwin, California, was sentenced by Chief U.S. District Judge Clay D. Land of the Middle District of Georgia, who also ordered Norris to pay $176,100 in restitution and to forfeit two vehicles he purchased with money from the bribery scheme and $70,000 in cash that he received from the scheme.

In connection with his guilty plea, Norris admitted that he conspired with other soldiers stationed at FOB Gardez to solicit and accept approximately $2,000 per day from local Afghan truck drivers in exchange for permitting the truck drivers to take thousands of gallons of fuel from the base.  Norris admitted that he was personally paid a total of $100,000 over the course of the conspiracy.

Norris and the other soldiers shipped the bribe proceeds back to the United States in tough boxes.  Norris admitted that, after returning from deployment, he purchased a 2008 Cadillac Escalade with $31,000 cash derived from the bribery scheme and a custom built 2014 Hardcore Choppers motorcycle with approximately $30,000 in proceeds from the scheme.

Seneca Hampton, another U.S. Army sergeant, pleaded guilty for his role in the scheme on Feb. 10, 2015, and is scheduled to be sentenced on July 28, 2015.  Anthony Tran, a former U.S. Army specialist, was indicted on March 10, 2015, for his alleged role in the scheme and remains pending trial.  The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

The case is being investigated by the U.S. Army Criminal Investigation Command, the Office of the Special Inspector General for Afghanistan Reconstruction, the Defense Criminal Investigative Service and the Defense Contract Audit Agency’s Investigative Support Division.  The case is being prosecuted by Trial Attorney John Keller of the Criminal Division’s Public Integrity Section. 

A Midvale, Utah, man and a Henderson, Nevada, woman were sentenced yesterday in the U.S. District Court in Salt Lake City for tax crimes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Carlie Christensen of the District of Utah. 

Gerrit Timmerman III, 73, of Midvale, was sentenced to serve 48 months in prison to be followed by three years of supervised release.  Carol Jean Sing, 75, of Henderson, was sentenced to serve 36 months in prison to be followed by three years of supervised release.  In February 2015, Timmerman and Sing were convicted at trial by a federal jury of conspiracy to defraud the United States related to their promotion of a tax fraud scheme.

“Combatting abusive tax schemes remains one of the Tax Division’s highest priorities, and these sentences are the result of our continued efforts to pursue and prosecute fraudulent promoters to the fullest extent of the law,” said Acting Assistant Attorney General Ciraolo.  “We will continue to work with our law enforcement partners at the IRS and in the U.S. Attorney’s Offices to identify and dismantle these criminal enterprises and in doing so, protect the American public and the U.S. Treasury.”

“Individuals who enrich themselves by promoting tax avoidance schemes and assisting others in evading state and federal taxes are defrauding American taxpayers,” said U.S. Attorney Christensen.  “They should expect to be prosecuted, convicted and sentenced to federal prison for this conduct, as yesterday’s sentences demonstrate.”

According to the evidence introduced at trial, between April 23, 2004, and March 5, 2007, Timmerman and Sing conspired to defraud the United States by marketing “corporations sole” as part of their scheme to evade the assessment and payment of federal income taxes.  Timmerman and Sing falsely told their clients that corporations sole were exempt from United States income tax laws, had no obligation to file tax returns and had no obligation to apply for tax exempt status.  They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from IRS collection activity by transferring property to the corporation sole.

According to evidence presented at trial, Sing used Trioid International Group Inc. as a resident agent for corporations sole and other business entities for their clients.  Sing and Timmerman also utilized a website to list the tax benefits of corporations sole and to post articles about the supposed tax benefits of corporations sole.  At the same time, Timmerman was actively assisting others in evading their state and federal income tax liabilities and recommended the corporation sole to his clients as another way to impair the IRS.  Both defendants referred customers to one another and paid each other referral fees. 

“Yesterday’s sentencing of Gerrit Timmerman and Carol Sing should send a clear message: schemes to evade the payment of taxes are a violation of the federal tax laws and the consequences of such schemes can and will result in jail time,” said Special Agent in Charge John G. Collins of IRS-Criminal Investigation in Utah.  “The Internal Revenue Service, in partnership with the U.S. Attorney’s Office and the Tax Division, will continue the aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation's tax system.  Honest taxpayers have been reassured today that no one is above the law – especially when the integrity of tax administration is at stake.”

A corporation sole is a form of incorporation allowed by some states, primarily for use by religious leaders to hold title to property.  Several states, including Utah and Nevada, have disallowed the creation of new corporations sole.  The IRS has publicized the fact that corporations sole have been abused by promoters in Revenue Ruling 2004-27, and has even included corporations sole on their “dirty dozen” tax scams in prior years.

Assistant Attorney General Ciraolo and U.S. Attorney Christensen commended the special agents of IRS–Criminal Investigation, who investigated this case, as well as Trial Attorneys Dennis R. Kihm and Andrea A. Kafka of the Tax Division, who prosecuted the case.

The heads of the antitrust agencies of the United States, Canada and Mexico met today in Mexico City to discuss their ongoing work to ensure effective antitrust enforcement cooperation in our increasingly interconnected markets.

The meetings were held among Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division, Chairwoman Edith Ramirez of the Federal Trade Commission, Canadian Commissioner of Competition John Pecman and President Alejandra Palacios Prieto of the Mexican Federal Economic Competition Commission.

The discussions covered a wide range of topics, including implementation of Mexico’s new competition law, enforcement cooperation among the three countries’ antitrust agencies, approaches to innovative and disruptive technologies and current enforcement priorities. 

“We value our close relationships with our antitrust partners north and south of the border,” said Assistant Attorney General Baer.  “Our shared enforcement interests and tradition of cooperating when investigating mergers and cartels ensure that North American markets remain competitive.  These annual ‘trilateral’ meetings give us a chance to review and improve our enforcement cooperation and to engage in policy dialogue on emerging topics of common interest.”

“These meetings are an important element in building and maintaining the strong relationships that help us meet enforcement and policy challenges in all three countries,” said Chairwoman Ramirez.  “The need to cooperate across our borders increases every year, and we are working together to meet that challenge.”

The four agency heads also spoke at a public conference organized by the Mexican agency, which included remarks by Assistant Attorney General Baer on the importance of anti-cartel enforcement and the role of criminal sanctions in the United States.

The meetings build on the foundations laid by the 1995 antitrust cooperation agreement between the United States and Canada, the 2000 agreement between the United States and Mexico and the 2001 agreement between Canada and Mexico.  The agreements commit the antitrust agencies to cooperate and coordinate with each other to make their antitrust policies and enforcement as consistent and effective as possible.

Today, the Justice Department’s Civil Rights Division announced that it has completed its investigation of the Hinds County Adult Detention Center and the Jackson City Detention Center and issued a letter of findings that determined that Hinds County, Mississippi, violates prisoners’ constitutional rights at both jail facilities.  The department found that the jail facilities fail to protect prisoners from violence by other prisoners and from improper use of force by staff.  The department also found that the jail facilities detain prisoners beyond court-ordered release dates. 

Systemic deficiencies contribute to serious harm and risk of harm at the jail facilities.  In the past three years, at least three major riots occurred, resulting in one prisoner’s death and the closing of entire housing units.  The department also documented rampant prisoner-on-prisoner violence, including an additional prisoner-on-prisoner homicide and a remarkable volume of contraband.  The department found systemic deficiencies in staffing; policies and training; security and classification procedures; physical plant and maintenance; contraband control; and administrative review and other accountability measures to prevent, detect and investigate improper uses of force. 

The department found that in an effort to address staffing and security concerns, Hinds County has locked down and otherwise improperly housed prisoners—severely limiting or eliminating access to treatment, education, exercise and visitation.  The department noted that juvenile prisoners and prisoners with mental illness are acutely harmed by the lockdowns.  One prisoner, who could neither speak nor hear, had been living in a cramped, dark booking cell with a reeking toilet for nearly three years.

The department also found that inadequate staffing and training, a backlog in record filing, and a lack of centralized information have resulted in prisoners being held beyond court-ordered release dates.  The delays, most of which were between one and ten days, arose in a variety of circumstances, including after judges ordered prisoners released for lack of probable cause, for lack of prosecution, after adjudication of a guilty plea, and after requisite contempt fines had been paid.  The longest period of over-detention—70 days—was for a 13-year-old middle school student, who was held a total of 173 days at the jail facilities without an indictment.  The department also voiced concern that delays in indicting prisoners, obtaining forensic mental health review, and bringing cases to trial may lead to unnecessary and prolonged incarceration, draining much-needed resources from the jail facilities.

“Hinds County Adult Detention Center and the Jackson City Detention Center are facilities in crisis,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “Making these facilities safe will require broad systemic reforms and a local commitment to improve staffing and operations.  The jail facilities play an integral part in the county’s criminal justice system, and it will take cooperation between everyone involved to make the changes needed.  The Civil Rights Division looks forward to working with county officials to bring these facilities into compliance with constitutional standards.”

“The Hinds County detention facilities have an obligation to provide conditions of confinement that do not offend the Constitution,” said U.S. Attorney Gregory K. Davis of the Southern District of Mississippi.  “This office will work with the Civil Rights Division of the Department of Justice to address and remedy the violations revealed by the investigation.”

The department’s investigation involved in-depth review and analysis of documents, including policies and procedures, incident reports, grievances, legal complaints and grand jury inspection reports.  The department also interviewed jail administrators, staff, prisoners, county officials and various criminal justice stakeholders. 

The Civil Rights of Institutionalized Persons Act (CRIPA) authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional rights of persons confined in a jail, prison or other correctional facility.  The Attorney General may initiate a lawsuit pursuant to CRIPA forty-nine days after issuance of the findings letter to correct deficiencies identified in the letter if county officials have not satisfactorily addressed the concerns. 

The department commends county officials and jail facilities staff for their cooperation and receptivity to the department’s concerns and looks forward to continuing to work with them in a collaborative manner to resolve the department’s findings expeditiously and under mutually agreeable terms.                             

For more information on the Civil Rights Division, please visit www.justice.gov/crt.