District Not Recorded

A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Wayne Lippman of Walnut Creek, California.  To date, as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California, 55 individuals have agreed to plead or have pleaded guilty.

According to court documents, between August 2008 and January 2011, Lippman conspired with others not to bid against one another and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda and Contra Costa counties.  Lippman made and received payoffs for the agreements not to bid, diverting money that would have otherwise gone to mortgage holders and other beneficiaries. 

“This plea is the latest step in the Antitrust Division’s ongoing efforts to hold investors accountable for colluding at foreclosure auctions and denying lenders and homeowners the fair market value of their property,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division.  “We will continue to work with our law enforcement partners to investigate and prosecute collusion at real estate foreclosure auctions and to restore confidence in the housing market.”

“The negative impact resulting from bid rigging and fraud at public foreclosure auctions is far-reaching,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office.  “The FBI remains committed to identifying such violations and we are grateful for the unwavering dedication to justice shared by all of our law enforcement partners.”

Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Alameda and Contra Costa counties, California.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

Lippman Information

In a settlement agreement with the Navajo Nation, the U.S. will place $13.2 million into an environmental response trust to pay for the evaluations of 16 priority abandoned uranium mines located across Navajo lands.  The investigation of these sites is a necessary step before final cleanup decisions can be made.  The work to be conducted is subject to the approval of the Navajo Nation as the lead agency and the Environmental Protection Agency (EPA) as the supporting agency. 

“This agreement is part of the Justice Department’s increased focus on environmental and health concerns in Indian country as well as the commitment of the Obama Administration to fairly resolve the historic grievances of American Indian tribes and build a healthier future for their people,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “The site evaluations focus on the mines that pose the most significant hazards and will form a foundation for their final cleanup.  In partnership with our sister federal agencies, we will also continue our work to address the legacy of uranium mining on Navajo lands, including ongoing discussions with the Navajo Nation.”

“EPA is proud to help implement this historic settlement,” said Regional Administrator Jared Blumenfeld for EPA for the Pacific Southwest.  “It dovetails with our ongoing activities as we work together to make real progress on the environmental legacy of uranium mining on the Navajo Nation.”

The Navajo Nation encompasses more than 27,000 square miles within Utah, New Mexico and Arizona in the Four Corners area.  The unique geology of the region makes the Navajo Nation rich in uranium, a radioactive ore in high demand after the development of atomic power and weapons at the close of World War II.  Approximately four million tons of uranium ore were extracted during mining operations within the Navajo Nation from 1944 to 1986.  The federal government, through the Atomic Energy Commission (AEC), was the sole purchaser of uranium until 1966, when commercial sales of uranium began.  The AEC continued to purchase ore until 1970.  The last uranium mine on the Navajo Nation shut down in 1986.  Many Navajo people worked in and near the mines, often living and raising families in close proximity to the mines and mills.

Since 2008, a number of federal agencies including EPA, the Department of Energy, the Bureau of Indian Affairs, the Department of the Interior, the Nuclear Regulatory Commission and the Indian Health Service have been collaborating to address uranium contamination on the Navajo Nation.  The federal government has invested more than $100 million to address abandoned uranium mines on Navajo lands.  EPA has remediated 34 homes, provided safe drinking water to 1,825 families, conducted field screening at 521 mines, compiled a list of 46 “priority mines” for cleanup and performed stabilization or cleanup work at nine mines. This settlement agreement resolves the claims of the Navajo Nation pertaining to costs of evaluations at 16 of the 46 priority mines for which no viable responsible private party has been identified.

In April 2014, the Justice Department and EPA announced in a separate matter that approximately $985 million of a multi-billion dollar settlement of litigation against subsidiaries of Anadarko Petroleum Corp. will be paid to EPA to fund the clean-up of approximately 50 abandoned uranium mines in and around the Navajo Nation, where radioactive waste remains from Kerr-McGee mining operations.

Two federal indictments were unsealed yesterday in the Southern District of Florida charging two Miami area tax return preparers with aiding and assisting in the preparation of false federal income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. 

On April 14, Noe Mompoint, of Southwest Ranches, Florida, was charged with 14 counts of aiding and assisting in the preparation of false federal income tax returns.  Lucvens Francois, of Aventura, Florida, was charged in a separate indictment with 19 counts of aiding and assisting in the preparation of false federal income tax returns.  Both defendants surrendered yesterday and had their initial appearances in court.

According to the allegations in the indictments, Mompoint owned and operated the Tax Resource Center, a tax preparation business located in Miami.  Mompoint filed tax returns for clients that reported fraudulent first-time homebuyer credits.  Francois owned and operated a branch office of the Tax Resource Center, also located in the Miami area.  Francois filed tax returns for clients that reported fraudulent first-time homebuyer credits and returns that claimed a variety of other false items, including false education credits, false business losses and false itemized deductions.

If convicted, Mompoint and Francois each face a statutory maximum sentence of three years in prison and a fine of $250,000 on each count.

 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.

Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Charles M. Edgar Jr. and Jason H. Poole of the Tax Division, who are prosecuting the case.

Merit Energy Company, a Texas-based oil and natural gas exploration and production company, has agreed to pay an $885,000 civil penalty and to improve leak detection and repair work practices to settle alleged violations of the Clean Air Act at its natural gas processing facility in Kalkaska, Michigan, the Department of Justice and the Environmental Protection Agency (EPA) announced today.  Emissions of volatile organic compounds (VOCs) from leaking equipment impact the environment and may cause serious health effects.  VOCs are a key component in the formation of smog or ground-level ozone, a pollutant that irritates the lungs, exacerbates diseases such as asthma and can increase susceptibility to respiratory illnesses, such as pneumonia and bronchitis. 

“This comprehensive compliance program continues our efforts to control fugitive emissions and will require Merit Energy to upgrade its monitoring and maintenance practices to help prevent future violations,” said Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division.  “Compliance with the clean air laws is essential to maintaining safe, responsible, and reliable sources of domestic energy.”

"People in northwest Michigan will breathe cleaner air as a result of this settlement," said EPA Regional Administrator Susan Hedman.  "Merit Energy will be making changes at the company's natural gas processing facility in Kalkaska that will prevent emissions of pollutants that pose risks for people with asthma and other respiratory diseases.”

“My office is pleased with this settlement.  Prevention or immediate detection and repair are critical when protecting health and the environment,” said U.S. Attorney Patrick Miles Jr. for the Western District of Michigan.  “We and the EPA are vigilantly ensuring compliance with the Clean Air Act and other environmental laws.”

In addition to paying a penalty, Merit Energy will implement a comprehensive leak detection and repair (LDAR) program to reduce emissions of VOCs from leaking equipment such as valves and pumps.  These emissions, known as “fugitive” emissions because they are not discharged from a stack but rather leak directly from equipment, are generally controlled through work practices, like monitoring and repairing leaks.  The settlement requires Merit Energy to implement enhanced work practices, including more frequent leak monitoring, better repair practices and innovative new efforts designed to prevent leaks.  In addition, the enhanced LDAR program requires Merit Energy to replace valves with new “low emissions” valves or valve packing material, designed to significantly reduce the likelihood of future leaks of VOCs.  This settlement imposes the first enhanced LDAR program at a natural gas processing facility.

According to the complaint, filed simultaneously with the settlement today in the Western District of Michigan, Merit Energy allegedly violated Clean Air Act requirements to monitor and repair leaking equipment and demonstrate compliance with regulations applicable to onshore natural gas processing plants. 

The consent decree is subject to a 30 day comment period and final approval by the court. A copy of the consent decree is available on the Department of Justice web site at www.justice.gov/enrd/Consent_Decrees.html.

     ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that KEN NANGAUTA, age 51, of Merizo, was sentenced today before Senior Judge Alex R. Munson, in the District Court of Guam, to 37 months imprisonment with credit for time served, three years supervised release and 200 hours community service.

     Defendant NANGAUTA pled guilty on June 2, 2014, to Conspiracy to Distribute Methamphetamine.  NANGAUTA received two packages containing ice from Las Vegas, Nevada, with the combined weight of 151 grams.  He also sent money to Eder Cortez-Zelaya in Las Vegas, Nevada, to pay for the ice on behalf of his co-defendant David Quinata.

     U.S. Attorney Limtiaco stated, “Our community is not immune from the poison of methamphetamine.  This case illustrates the hard work our partners in law enforcement do every day to stop the distribution of methamphetamine into Guam.  This conviction resulted from the concerted efforts of law enforcement partners in the OCDETF investigation, a focused multi- agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.”

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

The Department of Justice today announced a $20 million Body-Worn Camera (BWC) Pilot Partnership Program to respond to the immediate needs of local and tribal law enforcement organizations.  The investment includes $17 million in competitive grants for the purchase of body-worn cameras, $2 million for training and technical assistance and $1 million for the development of evaluation tools to study best practices.  The pilot program is part of President Obama’s proposal to invest $75 million over three years to purchase 50,000 body-worn cameras for law enforcement agencies.  

“This body-worn camera pilot program is a vital part of the Justice Department’s comprehensive efforts to equip law enforcement agencies throughout the country with the tools, support, and training they need to tackle the 21st century challenges we face,” said Attorney General Loretta E. Lynch.  “Body-worn cameras hold tremendous promise for enhancing transparency, promoting accountability, and advancing public safety for law enforcement officers and the communities they serve.”

Administered by the Bureau of Justice Assistance (BJA) under the Justice Department’s Office of Justice Programs (OJP), the BWC pilot program will provide support to help law enforcement agencies develop, implement and evaluate body-worn camera programs across the United States.

“Body-worn camera technology is a valuable tool for improving police-citizen relationships,” said Director Denise O’Donnell of the Bureau of Justice Assistance.  “BJA is committed to helping law enforcement agencies identify the safest and most effective methods for deploying this technology and addressing factors such as privacy, archiving and legal regulations surrounding its use.  BJA stands by to guide agencies through what can be a complex process toward more successful adoption of the technology.”

The Justice Department expects to provide 50 awards to law enforcement agencies, with about one-third of the grants directed toward smaller law enforcement agencies.  The grants, which require a 50/50 in-kind or cash match, can be used to purchase equipment but applicants must establish a strong plan for implementation of body-worn cameras and a robust training policy before purchasing cameras.  The long term costs associated with storing this information will be the financial responsibility of each local agency.

Another $2 million will fund a national BWC Training and Technical Assistance provider through a competitive process, to assist agencies developing and enhancing their BWC programs.  This training and technical assistance will provide support to law enforcement agencies to support successful implementation of their body-worn camera programs.

OJP’s Bureau of Justice Statistics (BJS) will receive $1 million of the funds to collect data on body-worn camera usage through surveys of law enforcement agencies.  BJS will also design data collection forms that can be used in future surveys of prosecutors and public defenders to measure how body-worn camera footage is being used by the courts in criminal cases.

BJA will launch a BWC Implementation Toolkit in May, designed as an online resource for stakeholders.  The toolkit will focus on implementation requirements, retention issues, policy concerns, interests of prosecutors, victim and privacy advocates’ concerns, along with community engagement and funding considerations.

For additional information about the BWC Pilot Implementation Program, visit this website: http://go.usa.gov/3BtMW.

Body-Worn Camera Fact Sheet

     ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that JOE DAVY BENAVENTE, JR., age 30, of Merizo, was sentenced today before Senior Judge Alex R. Munson, in the District Court of Guam, to six months home confinement with credit for time served, four years supervised release, 200 hours community service and a drug rehabilitation program approved by the U.S. Probation Office.

     Defendant BENAVENTE was charged with and pled guilty to conspiracy to distribute more than 5 grams of methamphetamine (ice).  BENAVENTE sent money on behalf of co-defendant David Quinata to Eder-Cortez Zelaya in Las Vegas to pay for ice.

     U.S. Attorney Limtiaco stated, “Our community is not immune from the poison of methamphetamine.  This case illustrates the hard work our partners in law enforcement do every day to stop the distribution of methamphetamine into Guam.  This conviction resulted from the concerted efforts of law enforcement partners in the OCDETF investigation, a focused multi- agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.”

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

At its annual meeting, the International Competition Network (ICN) adopted guidance on investigative process in competition cases and approved new work on international merger enforcement cooperation, legal theories in tying and bundling investigations and interaction with government procurement agencies, the Department of Justice’s Antitrust Division announced today.

The 14th annual ICN conference, hosted by the Australian Competition and Consumer Commission (ACCC), was held from April 28-May 1, 2015, in Sydney, Australia.  Over 500 delegates participated, representing more than 70 antitrust agencies from around the world, and included competition experts from international organizations and the legal, business, consumer and academic communities.  Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division and Federal Trade Commission Chairwoman Edith Ramirez led the U.S. delegation.  The conference showcased the achievements of ICN working groups on cartels, competition agency effectiveness, unilateral conduct, mergers and competition advocacy.

“ICN is an important forum for collaboration with our counterpart agencies around the world,” said Assistant Attorney General Baer.  “Cooperation with other jurisdictions makes our own enforcement stronger, particularly in a globalized economy where the number of companies operating in multiple jurisdictions continues to rise and there is a greater risk that anticompetitive transactions or conduct in one jurisdiction will harm consumers in other parts of the world.”

Assistant Attorney General Baer spoke on a panel about international cooperation in cartel enforcement.  The Cartel Working Group, co-chaired by the Antitrust Division, showcased new work on cooperation with procurement agencies and how to build constructive relationships to ensure free and fair competition in public bidding procedures.

“The ICN’s guidance on investigative process is an important step as agencies strive to be effective in promoting competition and protecting consumers,” said Chairwoman Ramirez.  “Good investigative process leads to better agency decision making, protects the procedural rights of parties and bolsters the legitimacy of competition enforcement.”

The Agency Effectiveness Working Group, co-chaired by the FTC, addresses competition agency strategy, operations and investigative procedures.  The working group developed ICN guidance on investigative process to promote fair and informed enforcement across all institutional frameworks and all competition enforcement areas.  The guidance is based on a broad consensus among ICN members regarding the importance of transparency, engagement between agencies and parties and the protection of confidential information during investigations.  It represents the most comprehensive agency-led effort to articulate guidance on investigative principles and practices that promote procedural fairness and effective enforcement.  The working group also presented new on-line training modules on effective interviewing during the course of a competition investigation.

Chairwoman Ramirez participated in the Unilateral Conduct Working Group’s plenary discussion of unilateral conduct in the new economy and optimal enforcement to promote innovation.  The working group promotes convergence and sound enforcement of laws governing conduct by firms with substantial market power.  This year, it presented a new workbook chapter on tying and bundling as part of a practical guide to the investigation of various types of unilateral conduct.

The Merger Working Group presented a practical guide to international enforcement cooperation.  It is intended to promote interagency cooperation, including for parties and third parties that seek to facilitate cooperation.  The guide identifies the benefits and basic principles of enforcement cooperation such as consistent outcomes, efficient investigations, flexibility and independent agency decision making.  It then highlights cooperation practices on timing alignment, information sharing, analysis and remedies.  This initiative furthers the working group’s mission to promote the adoption of best practices in the design and operation of merger review laws.

To promote implementation of the ICN Recommended Practices on Competition Assessment adopted at the 2014 ICN Annual Conference, the Advocacy Working Group presented a framework of examples of the roles that competition agencies play in evaluating the effects on competition of a proposed or existing law or regulation.  The working group also presented a report on developing an effective competition culture.

In 2014-2015, the ACCC led a special project devoted to the treatment of on-line vertical restraints under competition law and produced a comparative report, based on responses to a survey from 47 ICN member agencies.  The report was presented in a plenary session and discussed at the conference.

The ICN was created in October 2001, when the Department of Justice and the FTC joined antitrust agencies from 13 other jurisdictions to increase understanding of competition policy and promote convergence toward best practices around the world.  The ICN now comprises 132 member agencies from 119 jurisdictions.

More resources are available on the ICN website (link is external).

Former Puerto Rico Police Officers Jimmy Rodriguez Vega and David Colon Martinez were sentenced today for civil rights and obstruction of justice violations related to the fatal beating of Jose Luis Irizarry Perez, 19, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division, U.S. Attorney Rosa Emilia Rodriguez-Velez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI San Juan Field Office.  Rodriguez Vega was sentenced to serve 33 months months in prison for violating Irizarry Perez’s civil rights by striking him with a police baton during the incident, and Colon Martinez was sentenced to serve 24 months for making false statements to a Special Agent of the Federal Bureau of Investigation (FBI) and to the federal grand jury during the federal civil rights investigation.

With the issuance of today’s sentences, all six former Puerto Rico police officers who pled guilty for their roles in the beating and obstruction of the subsequent civil rights investigation have been sentenced.  According to documents filed in connection with the underlying guilty pleas, Rodriguez Vega and former Puerto Rico Police Sergeant Erick Rivera Nazario violated the constitutional rights of Irizarry Perez by striking him with their police batons while Colon Martinez physically restrained Irizarry Perez during an election evening celebration at the Las Colinas housing development in Yauco, Puerto Rico, on Nov. 5, 2008.  As part of his guilty plea, Rodriguez Vega admitted that after Rivera Nazario struck Irizarry Perez, while he was restrained and not posing a threat to any officer, Rodriguez Vega swung his own police baton as if it were a baseball bat into the victim’s forehead.  In conjunction with his guilty plea, Colon Martinez admitted that he falsely told the FBI and the grand jury that he did not see anyone else hit Irizarry Perez, whereas in truth he observed Rodriguez Vega and Rivera Nazario swing their batons into Irizarry Perez’s head and upper body, after which the victim collapsed to the ground.

U.S. District Court Judge Juan M. Perez Gimenez issued the sentence, which will be followed by three years of supervised release.  During the three-year term, the defendants will be under federal supervision, and risk additional prison time should they violate any terms of their supervised release. 

“The former police officers convicted for their roles in the fatal beating and obstruction of the subsequent investigation violated their sworn oaths to the young victim, his family, and the public at large,” said Principal Deputy Assistant Attorney General Gupta.  “Unfortunately, egregious civil rights violations by a few individuals, such as in this case, damage the public’s trust in law enforcement.  That’s why the department will steadfastly continue to investigate and prosecute these matters, but also work with law enforcement to rebuild that trust and ensure all individuals’ civil rights are protected under the law.”

 “Today’s sentencing brings a measure of justice to the family of Jose Luis Irizarry Perez,” said U.S. Attorney Rodriguez-Vélez.  “The U.S. Attorney’s Office reaffirms its commitment to vigorously prosecute those who abuse their power and official positions at the expense of constitutionally guaranteed civil rights.”

This case was investigated by the FBI’s San Juan Division and is being prosecuted by Senior Litigation Counsel Gerard Hogan and Trial Attorneys Shan Patel and Olimpia E. Michel of the Civil Rights Division and Assistant U.S. Attorney Jose A. Contreras of the District of Puerto Rico.

On April 20th, CCTV America correspondent Jessica Stone interviewed Interpol Washington Deputy Director Geoff Shank on the U.S. National Central Bureau's efforts to interdict foreign terrorist fighters through Interpol's Foreign Terrorist Fighter (FTF) program. The program, announced in September 2014, leverages the unique resources Interpol utilizes to combat transnational crime, including its secure, encrypted communications system, its criminal and analytical databases and its system of advisory notices.

Watch the full interview at http://www.cctv-america.com/2015/04/20/international-police-work-to-stop-foreign-fighters for more details and success stories of the program and for an insider's look at the Interpol Washington office.

BNP Paribas S.A. (BNPP), a global financial institution headquartered in Paris, was sentenced today for conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) by processing billions of dollars of transactions through the U.S. financial system on behalf of Sudanese, Iranian and Cuban entities subject to U.S. economic sanctions.  BNPP was sentenced to a five-year term of probation, and ordered to forfeit $8,833,600,000 to the United States and to pay a $140,000,000 fine.  Today’s sentencing is the first time a financial institution has been convicted and sentenced for violations of U.S. economic sanctions, and the total financial penalty—including the forfeiture and criminal fine—is the largest financial penalty ever imposed in a criminal case.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York, Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.  U.S. District Court Judge Lorna G. Schofield of the Southern District of New York imposed the sentence.

“BNP Paribas flouted U.S. sanctions laws to an unprecedented extreme, concealed its tracks, and then chose not to fully cooperate with U.S. law enforcement, leading to a criminal guilty plea and nearly $9 billion penalty” said Assistant Attorney General Caldwell.  “BNPP deliberately disregarded the law and provided rogue nations, and Sudan in particular, with vital access to the global financial system, helping that country’s lawless government to harbor and support terrorists and to persecute its own people.  Today’s sentence demonstrates that financial institutions will be punished severely but appropriately for violating sanctions laws and risking our national security interests.”

“BNPP, the world's fourth largest bank, has now been sentenced to pay a record penalty of almost $9 billion for sanctions violations that unlawfully opened the U.S. financial markets to Sudan, Iran, and Cuba,” said U.S. Attorney Bharara.  “BNPP provided access to billions of dollars to these sanctioned countries, and did so deliberately and secretly, in ways designed to evade detection by the U.S. authorities.  The sentence imposed today is appropriate for BNPP’s years-long and wide-ranging criminal conduct.”

“The sentencing of BNP Paribas Bank and the $9 Billion monetary penalty should sound the alarm to international financial institutions thinking of perpetrating these crimes,” said Chief Weber.  “The ability of IRS-CI and our partners to expose blatant violations of U.S. embargos and sanctions has changed the way financial matters are handled worldwide. We will continue to use our financial expertise to uncover these types of violations, as well as methodical and deliberate actions to conceal prohibited transactions from U.S. regulators and law enforcement.”

In connection with its guilty plea on July 9, 2014, BNPP admitted that from at least 2004 through 2012, it knowingly and willfully moved over $8.8 billion through the U.S. financial system on behalf of Sudanese, Iranian and Cuban sanctioned entities, in violation of U.S. economic sanctions.  The majority of illegal payments were made on behalf of sanctioned entities in Sudan, which was subject to U.S. embargo based on the Sudanese government’s role in facilitating terrorism and committing human rights abuses.  BNPP processed approximately $6.4 billion through the United States on behalf of Sudanese sanctioned entities from July 2006 through June 2007, including approximately $4 billion on behalf of a financial institution owned by the government of Sudan, even as internal emails showed BNPP employees expressing concern about the bank’s assisting the Sudanese government in light of its role in supporting international terrorism and committing human rights abuses during the same time period.  Indeed, in March 2007, a senior compliance officer at BNPP wrote to other high-level BNPP compliance and legal employees reminding them that certain Sudanese banks with which BNPP dealt “play a pivotal part in the support of the Sudanese government which . . . has hosted Osama Bin Laden and refuses the United Nations intervention in Darfur.”

Similarly, from October 2004 through early 2010, BNPP knowingly and willfully processed approximately $1.74 billion on behalf of Cuban sanctioned entities.  BNPP admitted that it continued to do U.S. dollar business with Cuba long after it was clear that such business was illegal.  BNPP further admitted that its conduct with regard to the Cuban embargo was both “cavalier” and “criminal.”

BNPP also engaged in more than $650 million of transactions involving entities tied to Iran, and this conduct continued into 2012—nearly two years after the bank had commenced an internal investigation into its sanctions compliance and pledged to cooperate with the government.  The illicit Iranian transactions included transactions for a petroleum company based in Dubai that was effectively a front for an Iranian petroleum company and an Iranian oil company.

In accepting BNPP’s guilty plea, Judge Schofield stated that BNPP’s actions “not only flouted U.S. foreign policy but also provided support to governments that threaten both our regional and national security and, in the case of Sudan, a government that has committed flagrant human rights abuses and has known links to terrorism.”  Judge Schofield further stated that the forfeiture of over $8 billion will “surely have a deterrent effect on others that may be tempted to engage in similar conduct, all of whom should be aware that no financial institution is immune from the rule of law.”

The Justice Department is exploring ways to use the forfeited funds to compensate individuals who may have been harmed by the sanctioned regimes of Sudan, Iran and Cuba.  As a preliminary step in this process, the Justice Department is inviting such individuals or their representatives to provide information describing the nature and value of the harm they suffered.  Beginning today (May 1, 2015), interested persons can learn more about this process and submit their information at www.usvbnpp.com, or call 888-272-5632 (within North America) or 317-324-0382 (internationally).

In addition to its federal criminal conviction, BNPP pleaded guilty in New York State Supreme Court to falsifying business records and conspiring to falsify business records.  BNPP also agreed to a cease and desist order and to pay a civil monetary penalty of $508 million to the Board of Governors of the Federal Reserve System.  The New York State Department of Financial Services announced that BNPP agreed to, among other things, terminate or separate from the bank 13 employees, including the Group Chief Operating Officer and other senior executives; suspend U.S. dollar clearing operations through its New York Branch and other affiliates for one year for business lines on which the misconduct centered; extend for two years a monitorship put in place in 2013; and pay a monetary penalty of $2.24 billion.  In satisfying its criminal forfeiture penalty, BNPP will receive credit for payments it made in connection with its resolution of these related state and regulatory matters.  The Treasury Department’s Office of Foreign Assets Control also levied a fine of $963 million, which will be satisfied by payments made to the Justice Department.

This case was investigated by the IRS-CI’s Washington Field Office and FBI’s New York Field Office.  This case was prosecuted by Deputy Chief Craig Timm and Trial Attorney Jennifer E. Ambuehl of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorneys Andrew D. Goldstein, Martin S. Bell, Christine I. Magdo and Micah W.J. Smith of the Southern District of New York.

The New York County District Attorney’s Office conducted its own investigation alongside the Justice Department in this case.  The Justice Department expressed its gratitude to the Board of Governors of the Federal Reserve, the Federal Reserve Bank of New York, the New York State Department of Financial Services and the Treasury Department’s Office of Foreign Assets Control for their assistance with this matter.

An alleged leader of an international drug trafficking organization based in Guatemala was extradited to the United States yesterday to face international narcotics trafficking charges in the District of Columbia, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.

Eliu Elixander Lorenzana-Cordon, 43, was arrested in Guatemala on Nov. 8, 2011, after being indicted for conspiracy to import cocaine into the United States, and has been detained since that time pending extradition.  He arrived in the United States yesterday and was arraigned today before U.S. Magistrate Judge Alan Kay of the District of Columbia. 

According to allegations contained in the indictment, Lorenzana-Cordon is a leader of an international drug trafficking organization that includes his father and several other family members.  Between 1996 and 2012, the organization allegedly received and stored multi-ton quantities of cocaine from Colombia for later importation into Mexico and the United States.

These cocaine shipments, worth millions of dollars, were allegedly transported to El Salvador on “go-fast” boats, and then smuggled into Guatemala by land and air.  The cocaine was then inventoried and stored for later export to Mexico and eventually the United States.

On April 27, 2010, the Department of Treasury’s Office of Foreign Asset Control designated Lorenzana-Cordon as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act due to his significant role in international narcotics trafficking and his ties to the Sinaloa Cartel.

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

Lorenzana-Cordon’s brother, Waldemar Lorenzana-Cordon, was extradited to the United States on Nov. 13, 2014, and is currently awaiting trial.  Lorenzana-Cordon’s father, Waldemar Lorenzana-Lima, pleaded guilty on Aug. 18, 2014, to conspiracy to import over 450 kilograms of cocaine into the United States, and is currently awaiting sentencing.  All three defendants were charged in the same indictment.

The investigation was led by the DEA’s 959/Bilateral Investigations Unit and Guatemala City Country Office, and was part of the Organized Crime Drug Enforcement Task Force.  The case is being prosecuted by the Criminal Division’s Narcotic and Dangerous Drug Section.  The Criminal Division’s Office of International Affairs provided significant assistance in the extradition.  The department appreciates the assistance provided by the government of Guatemala.

Thirteen current and former law enforcement officers and two other individuals have been indicted and arrested for allegedly protecting narcotics shipments and cash proceeds during transit along the east coast for what they believed was a large-scale drug trafficking organization that was actually an undercover operation by the FBI.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division made the announcement.

“Corruption in local government – especially involving law enforcement – threatens the social compact that binds our communities together,” said Assistant Attorney General Caldwell.  “When the officer with a gun and a badge is no different from the trafficker peddling drugs in the street, we all suffer.  That is why the Criminal Division of the Department of Justice and our law enforcement partners in North Carolina and throughout the country are determined to root out corruption, wherever and in whatever form it may be found.”

“The actions by these individuals are particularly troubling due to their current and past affiliation with law enforcement,” said U.S. Attorney Walker.  “Their alleged conduct was reprehensible and my office will not tolerate this kind of corruption in our district.  I am grateful for the outstanding work of the FBI Special Agents who investigated this case.”

“They vowed to protect and serve, but instead these deputies and correctional officers sold their badges and used their law enforcement positions to line their own pockets,” said Special Agent in Charge Strong.  “Public corruption at any level is the number one criminal priority of the FBI and we will work aggressively to protect the public trust.”

The following individuals were indicted in the Eastern District of North Carolina and arrested today in a coordinated operation by the FBI:

• Lann Tjuan Clanton, 36, a correctional officer with the Virginia Department of Corrections;

• Ikeisha Jacobs, 32, a deputy with the Northampton County Sheriff’s Office;

• Jason Boone, 29, a deputy with the Northampton County Sheriff’s Office;

• Wardie Vincent Jr., 35, formerly of the Northampton County Sheriff’s Office;

• Adrienne Moody, 39, a correctional officer with the North Carolina Department of Public Safety;

• Cory Jackson, 43, formerly of the Northampton County Sheriff’s Office;

• Jimmy Pair Jr., 48, a deputy with the Northampton County Sheriff’s Office;

• Curtis Boone, 31, a deputy with the Northampton County Sheriff’s Office;

• Antonio Tillmon, 31, a police officer with the Windsor City Police Department;

• Alaina Kamling, 27, a correctional officer with the North Carolina Department of Public Safety;

• Kavon Phillips, 25, a correctional officer with the North Carolina Department of Public Safety;

• Crystal Pierce, 31, of Raleigh, North Carolina;

• Alphonso Ponton, 42, a correctional officer with the Virginia Department of Corrections;

• Thomas Jefferson Allen II, 37, a deputy with the Northampton County Sheriff’s Office; and

• Tosha Dailey, 31, a 911 dispatch operator for Northampton County.

All 15 defendants are charged with conspiring to distribute controlled substances and conspiring to use and carry firearms during and in relation to drug trafficking offenses.  Other charges against certain defendants include attempted extortion, attempted possession with intent to distribute controlled substances, money laundering, federal programs bribery and use and carry of firearms during and in relation to crimes of violence and drug trafficking offenses.

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

The case is being investigated by the FBI’s Charlotte Division, Raleigh Resident Agency and the North Carolina Department of Public Safety, with assistance from the Halifax County Sheriff’s Office.  The case is being prosecuted by Trial Attorneys Lauren Bell and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Brian S. Meyers of the Eastern District of North Carolina.

Acting Assistant Attorney General Leslie Overton of the Department of Justice’s Antitrust Division provided the following statement today after the U.S. District Court of the Eastern District of New York issued an order regarding a remedy to address American Express’s illegal conduct:

“We are pleased that the court has ordered American Express to eliminate its illegal anti-steering rules.  These rules have stifled competition among credit card networks by blocking merchants from encouraging their customers to use particular credit cards.  The court’s remedy will benefit merchants, who pay more than $50 billion in credit card ‘swipe fees’ annually, as well as the consumers who ultimately bear these costs.  Merchants’ ability to encourage the use of particular credit card networks will incentivize American Express and its competitors to compete to earn a greater share of a merchant’s business.  The court’s order reinforces the victory the department has won for consumers.” 

The court’s order prohibits American Express from adopting rules or entering contracts that block merchants from encouraging their customers to use a particular credit card.  Under the order, merchants must be permitted to: offer discounts for the use of particular cards; express a preference for particular cards; disclose to customers the cost merchants incur when the customer uses particular credit cards; and engage in other conduct to encourage use of favored credit cards.  The order also requires American Express to: repeal any rules that block merchant steering; notify merchants of their freedom to engage in steering activities; and adopt compliance measures to ensure that its employees understand that they cannot continue to block steering by merchants that accept American Express cards.

The U.S. Department of Justice and 17 state attorneys general sued American Express, Visa Inc. and MasterCard International Inc., in 2010 to eliminate restrictions that the three credit card networks imposed on merchants.  The civil case, brought under Section 1 of the Sherman Antitrust Act, sought to end the violation and to restore competition.

Settlements with Visa and MasterCard were filed at the same time the case against American Express was begun; the settlements, like the court’s order concerning American Express’s conduct, prohibit Visa and MasterCard from continuing their rules and practices that had obstructed competition.  The court approved the settlements on July 20, 2011, and they applied immediately to Visa and MasterCard.  American Express was not a party to the settlements, and the litigation against American Express continued.

Over the course of a seven week trial during the summer of 2014, the department presented evidence that these restrictions obstruct merchants from using competition to try to keep credit card fees from increasing. 

On Feb. 19, 2015, Judge Nicholas G. Garaufis of the Eastern District of New York issued a decision finding that American Express violated Section 1 of the Sherman Act.  The court also entered a scheduling order instructing the parties to submit, within 30 days, a joint proposed remedial order.  Today’s order follows the parties’ briefing concerning the proposed remedy.

Amex Remedy Opinion

Amex Injunction Order

Attorney General Loretta E. Lynch announced today the appointment of six new members to the Attorney General’s Advisory Committee.  The following appointments became effective April 29, 2015:

• U.S. Attorney Deirdre Daly for the District of Connecticut;

• U.S. Attorney Steven Dettelbach for the Northern District of Ohio;

• U.S. Attorney Conner Eldridge for the Western District of Arkansas;

• U.S. Attorney Paul Fishman for the District of New Jersey;

• U.S. Attorney Booth Goodwin II for the Southern District of West Virginia; and

• U.S. Attorney Kenneth Polite for the Eastern District of Louisiana.

“The distinguished women and men who serve on the Attorney General’s Advisory Committee provide invaluable advice and wise counsel that help shape the Justice Department’s approach to combating crime, violence, and injustice in every community across the country,” said Attorney General Lynch.  “They help introduce new ideas, formulate innovative policies, and design fresh strategies.  They foster collaboration across our U.S. Attorney’s Offices and with Main Justice.  And, in all of their work, they seek to strengthen and improve law enforcement efforts at every level.  As a former chair of the AGAC, I am proud to welcome six outstanding new members to the Committee, and I look forward to all that we will achieve, with their help, in the days ahead.”

Attorney General Lynch also thanked U.S. Attorney Ronald Sharpe for the District of the Virgin Islands for serving on the Attorney General’s Advisory Committee for the past two years. 

A brief bio on each new appointee is below:

Deirdre Daly was presidentially appointed and sworn in as the U.S. Attorney for the District of Connecticut on May 28, 2014.  Daly previously served as the U.S. Attorney in an acting or interim capacity since May 14, 2013.  Between July 2010 and May 2013, she was the First Assistant U.S. Attorney during which time she assisted in the oversight of both the Criminal and Civil Divisions.  From 1985 to 1997, Daly was an Assistant U.S. Attorney in the Southern District of New York, where she prosecuted a wide range of cases from racketeering and murder to corruption and fraud and later served as the Assistant-In-Charge of White Plains Office for three years.  After leaving the Justice Department, Daly was a partner at Daly & Pavlis LLC, a Connecticut law firm with a practice focused on corporate and commercial litigation, white-collar criminal investigations, SEC enforcement actions and corporate internal investigations and monitoring.

Steven Dettelbach was presidentially appointed and sworn in as the U.S. Attorney for the Northern District of Ohio in September 2009.  Dettelbach previously served for over 12 years as a career federal prosecutor.  During those years, he worked at the Department of Justice, Civil Rights Division, Criminal Section, U.S. Attorneys Offices in Maryland and Washington, D.C. and from 2003 to 2006 in the Northern District of Ohio, as a member of the Organized Crime and Corruption Strike Force.  Dettelbach also was detailed to serve as Counsel for the U.S. Senate Committee on the Judiciary from 2001 to 2003.  Formerly, Dettelbach was a partner at the law firm of Baker & Hostetler LLP.

Conner Eldridge was presidentially appointed and sworn in as the U.S. Attorney for the Western District of Arkansas on December 21, 2010.  Eldridge is the youngest U.S. Attorney in the country.  Eldridge serves as co-chair of the Domestic Terrorism Executive Committee, which is composed of twenty law enforcement agencies and Department of Justice components and works to increase collaboration in addressing the threat of Domestic Terrorism.  While serving as U.S. Attorney, Eldridge has tried five cases to jury verdict.  He previously served as a Deputy Prosecuting Attorney in Arkadelphia (Clark County), Arkansas, as Counsel and, later, Chief Executive Officer of Summit Bank, a community bank then serving central and southwest Arkansas, also in Arkadelphia, as a clerk to federal District Judge G. Thomas Eisele and as a legislative assistant to former U.S. Senator Blanche Lincoln and former U.S. Congressman Marion Berry, both of Arkansas. 

Paul Fishman was presidentially appointed and sworn in as the U.S. Attorney for the District of New Jersey on October 14, 2009.  Fishman previously served as a member of the Attorney General's Advisory Committee of U.S. Attorney's (AGAC) from 2009-2013.  He served as Vice-Chair of the AGAC from 2009-2011 and Chair from 2011-2012. After graduating from law school, he clerked for the Honorable Edward R. Becker of the U.S. Court of Appeals for the Third Circuit.  He was an Assistant U.S. Attorney from 1983 to 1994.  From 1994 to 1997, he was a senior adviser to the Attorney General and Deputy Attorney General of the U.S. on a variety of law enforcement, policy, legislative, national security and international matters, as well as on specific investigations and prosecutions.  In addition to his public service, from 1998 - 2009 Fishman was a partner in the law firm of Friedman Kaplan Seiler & Adelman.

Booth Goodwin II was presidentially appointed and sworn in as U.S. Attorney for the Southern District of West Virginia on May 27, 2010.  From January 2001 until he was sworn in as U.S. Attorney, Goodwin was an Assistant U.S. Attorney for the Southern District of West Virginia.  Prior to that, Goodwin practiced for five years with the Charleston law firm of Goodwin & Goodwin, LLP where he engaged in commercial and personal injury litigation, closed multi-million dollar bond transactions, filed reports with the U.S. Securities and Exchange Commission and handled numerous commercial and residential real estate transactions.    

Kenneth Polite was presidentially appointed and sworn in as U.S. Attorney for the Eastern District of Louisiana on September 20, 2013. Polite currently serves as a member of the AGAC's Violent and Organized Crime Subcommittee and Smart on Crime Working Group. Prior to becoming U.S. Attorney, Polite was a shareholder at Liskow & Lewis, where he headed the white collar criminal defense group and served as the Firm's hiring partner.  From 2007 to 2010, Polite served as an Assistant U.S. Attorney for the Southern District of New York.  There, he prosecuted a wide range of federal criminal offenses, including organized crime, public corruption, narcotics and firearms trafficking, money laundering and identity theft.  Polite was an associate at Skadden, Arps, Slate, Meagher & Flom LLP, first in the Delaware office's corporate litigation practice from 2000 to 2001, and later, in the New York office's white collar criminal defense group from 2002 to 2006.

The Attorney General’s Advisory Committee will now include the following individuals:

• U.S. Attorney John F. Walsh for District of Colorado, Chair;

• U.S. Attorney Richard S. Hartunian for the Northern District of New York, Vice Chair;

• U.S. Attorney Michael W. Cotter for the District of Montana;

• U.S. Attorney Deirdre Daly for the District of Connecticut;

• U.S. Attorney Thomas E. Delahanty, II for the District of Maine;

• U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio;

• U.S. Attorney Conner Eldridge for the Western District of Arkansas;

• U.S. Attorney Zachary T. Fardon for the Northern District of Illinois;

• U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida;

• U.S. Attorney Paul J. Fishman for the District of New Jersey;

• U.S. Attorney R. Booth Goodwin II for the Southern District of West Virginia;

• U.S. Attorney Barry R. Grissom for the District of Kansas;

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

• U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan;

• U.S. Attorney Zane D. Memeger for the Eastern District of Pennsylvania;

• U.S. Attorney Wendy J. Olson for the District of Idaho;

• U.S. Attorney Kenneth A. Polite for the Eastern District of Louisiana;

• U.S. Attorney Vincent Cohen, Jr. for the District of Columbia, ex officio

• Criminal Chief Thomas Eicher for District of New Jersey, ex officio

• Appellate Chief Sandra Glover for District of Connecticut, ex officio; and

• Civil Chief Thomas Walsh for the Northern District of Illinois, ex officio

The AGAC was created in 1973 to serve as the voice of the U.S. Attorneys and to advise the attorney general on policy, management and operational issues impacting the offices of the U.S. Attorneys.

     ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that RICHARD BORJA, age 33, of Santa Rita, was sentenced on April 29, 2015, before Senior Judge Alex R. Munson, in the District Court of Guam, to 41 months imprisonment, three years supervised release and 200 hours community service.

     Defendant BORJA received ice in the mail from his co-defendant Francisco Arias.  He pled guilty on June 6, 2014, to Conspiracy to Distribute Methamphetamine.

     U.S. Attorney Limtiaco stated, “Our community is not immune from the poison of methamphetamine.  This case illustrates the hard work our partners in law enforcement do every day to stop the distribution of methamphetamine into Guam.”  This conviction resulted from the concerted efforts of law enforcement partners in the OCDETF investigation, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.

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

The Justice Department announced today that John Louis Blalack, 21, of Brandon, Mississippi, was sentenced today in U.S. District Court of the Southern District of Mississippi in Jackson for his role in a federal hate crime conspiracy involving racially motivated assaults, culminating in the death of James Craig Anderson, an African-American man, in the summer of 2011.  Blalack had previously pleaded guilty to two counts of commission of a hate crime for his role in the conspiracy and the cover-up.  Blalack was sentenced to 240 months in prison.

Eight other defendants in related cases, Deryl Paul Dedmon, 22, John Aaron Rice, 22, Dylan Wade Butler, 23, Jonathan Kyle Gaskamp, 22, and Joseph Paul Dominick, 23, all of Brandon, Mississippi; William Kyle Montgomery, 25, of Puckett, Mississippi, Sarah Adelia Graves, 22, of Crystal Springs, Mississippi; and Shelbie Brooke Richards, 21, Pearl, Mississippi, were previously sentenced to 600 months, 220 months, 78 months, 48 months, 48 months, 224 months, 60 months and 96 months, respectively, for their roles in the conspiracy.  Robert Henry Rice is awaiting sentencing.

“The Justice Department will always fight to hold accountable those who commit racially motivated assaults,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “We hope that the prosecution of those responsible for this horrific crime will help provide some measure of closure to the victim’s family and to the larger community affected by this heinous crime.”

“This prosecution sends a clear message that this office, in partnership with the DOJ Civil Rights Division, will prioritize and aggressively prosecute hate crimes and other civil rights violations in the Southern District of Mississippi,” said U.S. Attorney Gregory K. Davis of the Southern District of Mississippi.

“The FBI takes very seriously its responsibility to uphold the civil rights of all citizens,” said Special Agent in Charge Donald Alway of the FBI’s Jackson, Mississippi, Division.  “Together with its law enforcement partners, the FBI will continue its efforts to aggressively pursue and bring to justice all those individuals who conspire to deprive others of their civil rights merely because of the color of their skin.”

In prior court hearings, the defendant admitted that beginning in the spring of 2011, he and others conspired with one another to harass and assault African Americans in and around Jackson.  On numerous occasions, the co-conspirators used dangerous weapons, including beer bottles, sling shots and motor vehicles, to cause, and attempt to cause, bodily injury to African Americans.  They would specifically target African Americans they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault.  The co-conspirators would often boast about these racially motivated assaults.

Blalack admitted his involvement in the conspiracy and to his role in the beating and killing of James Craig Anderson.  Specifically, he admitted that in the early morning hours of June 26, 2011, he and six other co-conspirators agreed to carry out their plan to find, harass and assault African Americans.  At around 4:15 a.m., Blalack, Montgomery, John Aaron Rice and Butler drove to Jackson in Montgomery’s white Jeep with the understanding that Richards, Graves and Dedmon would join them a short time later.

At approximately 5:00 a.m., the four occupants of the Jeep spotted Anderson in a motel parking lot off Ellis Avenue.  They decided that Anderson would be a good target for an assault because he was African-American and appeared to be intoxicated.  Blalack and J. Rice got out of the Jeep to distract Anderson while they waited for Richards, Graves, and Dedmon to arrive.  After Richards, Graves and Dedmon arrived in a Ford F250 truck, Rice and Dedmon physically assaulted Anderson.  After the assault, the four occupants of the Jeep left the motel parking lot in the Jeep.  Dedmon then deliberately used his truck to run over Anderson, causing injuries which resulted in Anderson’s death.  Blalack also admitted that prior to Anderson's death he and his co-conspirators threw beer bottles at African American and also used a sling shot to shoot metal ball bearings at victims in Jackson.

This case was the result of a cooperative effort among the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Mississippi and the Hinds County, Mississippi, District Attorney’s Office.  This case was investigated by the Jackson Division of the FBI and the Jackson Police Department.  It is being prosecuted by Trial Attorney Sheldon L. Beer and Deputy Chief Paige M. Fitzgerald of the Civil Rights Division of the Department of Justice, and Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.

An independent contractor for a trucking company in Afghanistan that was responsible for delivering fuel to U.S. Army installations was sentenced to four years in prison today for offering a U.S. Army serviceman $54,000 in bribes to falsify documents confirming the receipt of fuel shipments that were never actually delivered.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Special Inspector General for Afghanistan Reconstruction John F. Sopko, Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office, Special Agent in Charge Raymond R. Parmer Jr. of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) New York Field Office and Director Frank Robey of the U.S. Army’s Criminal Investigation Command (CID) made the announcement.

Akbar Ahmed Sherzai, 50, of Centreville, Virginia, pleaded guilty on Feb. 14, 2014, to one count of conspiracy to commit bribery.  In addition to the prison sentence, U.S. District Court Judge Margo K. Brodie of the Eastern District of New York ordered Sherzai to forfeit $54,000. 

In connection with his guilty plea and in other court documents, Sherzai acknowledged that he was employed by a local Afghan trucking company contracted to transport fuel between U.S. military bases in Afghanistan.  Sherzai acknowledged that, in April 2013, he approached a U.S. military serviceman to discuss instances in which his company failed to deliver the fuel—called “no-show” missions—which resulted in a $75,000 fine to his company for each no-show.  Sherzai admitted that he offered the serviceman bribes to falsify documents to confirm deliveries, so that Sherzai’s company and others could recover the fines they had paid for no-shows.  On several occasions, Sherzai paid cash bribes to the serviceman, who, unbeknownst to Sherzai, was working with law enforcement.  In total, Sherzai acknowledged that he paid the serviceman $54,000 to falsify documents relating to nine deliveries, allowing his company and others to avoid or recover $675,000 in fines.

This matter was investigated by the Special Inspector General for Afghanistan Reconstruction, FBI, ICE-HSI and CID.  The case is being prosecuted by Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Amir H. Toossi of the Eastern District of New York.

A Miami-area medical doctor was sentenced today to 60 months in prison for his role in a $5.5 million Medicare fraud scheme involving fraudulent billings by a psychiatric hospital in Hollywood, Florida.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

Barry Kaplowitz, 54, of Aventura, Florida, a licensed physician, was convicted of making false statements related to health care matters on Feb. 20, 2015, following a six-week jury trial.  In addition to today’s prison sentence, U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida ordered Kaplowitz to pay more than $2.9 million in restitution.

According to evidence presented at trial, Kaplowitz served as the medical director at Hollywood Pavilion (HP), a state-licensed psychiatric hospital, from approximately 2008 to 2011.  During that time, Kaplowitz signed false and fraudulent medical records in order to make it appear that HP’s patients qualified for and received intensive outpatient services, even though they did not.  The evidence demonstrated that Kaplowitz signed patient files for over 400 patients certifying that he had provided mental health services to each of them, even though he never saw nor provided any treatment to the patients.  HP used these falsified medical records to submit over 2,800 false claims to Medicare totaling over $5.5 million.  Medicare paid $2.9 million on those false claims.

Five other individuals have previously been convicted and sentenced in this case:

• Karen Kallen-Zury, of Lighthouse Point, Florida, HP’s former chief executive officer, was sentenced to 25 years in prison;

• Daisy Miller, of Hollywood, the clinical director of HP’s inpatient facility, was sentenced to 15 years in prison;

• Michele Petrie, of Fort Lauderdale, Florida, the head of HP’s intensive outpatient program, was sentenced to six years in prison;

• Christian Coloma, of Miami Beach, Florida, the director of physical therapy for an entity associated with HP, was sentenced to 12 years in prison; and

• Christopher Gabel, of Davie, Florida, HP’s former chief operating officer, was sentenced to six years in prison.

Kallen-Zury, Miller, Gabel and Petrie were ordered to pay more than $39 million in restitution, and Coloma was ordered to pay more than $20 million in restitution.

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 for the Southern District of Florida.  The case is being prosecuted by Trial Attorneys Nicholas E. Surmacz, Andrew H. Warren and L. Rush Atkinson 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 and 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.

A federal jury in Oklahoma City convicted a Texas man today of running an illegal international gambling enterprise and conspiring to commit 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.

Bartice Alan King, aka “Luke,” 44, of Spring, Texas, was found guilty of conducting an illegal gambling business and engaging in a conspiracy to commit money laundering.  A sentencing hearing has not yet been set.

According to evidence presented at trial, from 2003 to 2013, King was the owner, CEO and President of Legendz Sports, an Internet and telephone gambling enterprise based in Panama City, Panama.  Over the course of a decade, the international gambling enterprise took more than $1 billon in illegal wagers, almost exclusively from gamblers in the United States on American sporting events. 

The evidence demonstrated that after founding Legendz Sports, King directed and supervised a network of bookies located all over the United States, who illegally solicited and accepted sports wagers and settled gambling debts.  The evidence further demonstrated that 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 to launder gambling proceeds. 

The evidence demonstrated that the illegal gambling proceeds were used to further promote the gambling business, including to pay employees, build a new multi-million dollar call center to take bets and build a “bank” of cash to pay future winning bettors.  King used the profits to live a lavish lifestyle, including mansions in Florida and Texas.

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 Criminal Division’s Office of International Affairs also assisted with this investigation.  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.

Kolon Sentenced To Pay $360 Million in Restitution And Fines

Kolon Industries Inc., a South Korean industrial company, pleaded guilty this morning in federal court in Alexandria, Virginia, to conspiracy to steal trade secrets involving E.I. DuPont de Nemours & Co.’s (DuPont) Kevlar technology.  The company was sentenced to pay $85 million in criminal fines and $275 million in restitution. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Special Agent in Charge Adam S. Lee of the FBI’s Richmond, Virginia, Division made the announcement.

Kolon Industries Inc., appearing through two successor entities—Kolon Industries Inc. and Kolon Corporation (collectively, Kolon)—pleaded guilty to one count of conspiracy to convert trade secrets before U.S. District Judge Anthony J. Trenga of the Eastern District of Virginia. 

“Protecting the trade secrets of American businesses sustains the integrity and competitiveness of the American economy, and encourages the development of new products, including advanced technologies,” said Assistant Attorney General Caldwell.  “The Criminal Division is committed to ensuring that foreign companies, like Kolon Industries, cannot escape the reach of the criminal justice system when they have conspired to steal the results of American ingenuity and our companies’ intellectual property.”

“Research and development are pillars of our economy, and we cannot allow anyone to obtain by theft what innovators develop through effort and ingenuity,” said U.S. Attorney Boente.  “Today’s outcome confirms that we will aggressively investigate and prosecute intellectual property crimes, regardless of whether the perpetrators are foreign or domestic, corporations or individuals.  There are no safe harbors for those who seek to steal trade secrets in the Eastern District of Virginia.”

“Protecting American companies from the theft of their trade secrets is a high priority for the FBI,” said Special Agent in Charge Lee.  “Each year, billions of U.S. dollars are lost to foreign competitors who pursue illegal commercial short cuts by stealing valuable advanced technologies.  This case demonstrates the FBI’s ability to penetrate these highly sophisticated criminal schemes and bring their perpetrators to justice.  Its outcome should send a clear message to foreign commercial actors who seek to illegally exploit American companies and steal our nation’s innovation and technology.”

According to the statement of facts filed with the plea agreement, from June 2006 to February 2009, Kolon conspired with former DuPont employees and others to steal DuPont’s trade secrets for making Kevlar, a high-strength, para-aramid synthetic fiber.  Kevlar, a trademarked name, is one of DuPont's most well-known products and is used is a wide range of commercial applications such as body armor, fiber optic cables, and automotive and industrial products.  Kolon admitted that it was attempting to improve the quality of its own para-aramid fiber known as Heracron. 

Kolon personnel met repeatedly with former DuPont employees, including Edward Schulz, 72, of Brownstown, Pennsylvania, and Michael Mitchell, 58, of Chesterfield, Virginia, to obtain confidential and proprietary DuPont information about Kevlar.  Schulz pleaded guilty to conspiracy to steal trade secrets in September 2014 and is scheduled to be sentenced on June 26, 2015.  Mitchell pleaded guilty to theft of trade secrets and obstruction of justice in December 2009 and was sentenced to 18 months in prison. 

Kolon admitted that it obtained technical and business documents regarding Kevlar, including instructional materials that described DuPont’s “New Fiber Technology,” documents on polymerization, and a detailed breakdown of DuPont’s capabilities and costs for the full line of its Kevlar products and DuPont’s Kevlar customers.

According to the statement of facts and Mitchell’s admissions at his guilty plea, Mitchell exchanged numerous telephone calls and emails with Kolon personnel.  On more than one occasion, Mitchell advised Kolon personnel that some of the information they sought was proprietary and that DuPont considered such information to be trade secrets.  Mitchell also coordinated a meeting at a hotel in Richmond, at which Kolon personnel were introduced to a cooperating witness who pretended to be a disgruntled scientist from DuPont.  During the Richmond meeting, Kolon personnel indicated that they would only be comfortable communicating with the cooperating witness in a manner that was confidential and that would not leave an evidentiary trail.

In February 2009, DuPont filed a civil lawsuit against Kolon in the Eastern District of Virginia, alleging theft of trade secrets.  Thereafter, certain Kolon personnel attempted to delete files and emails related to Mitchell, Schulz and outside consultants hired to improve Kolon’s para-aramid fiber, and urged other Kolon personnel to search for such materials and mark them for deletion.

Kolon also admitted that certain employees approached a former employee of an American subsidiary of Teijin Ltd. – a Japanese company that makes the para-aramid fiber called Twaron—in an unsuccessful effort to obtain information about Twaron.

This case represents the first time that foreign corporations with no direct presence in the United States were found to be successfully served with U.S. criminal process, over their objections, based on service pursuant to an international treaty.  In December 2014, the district court found that both of the successor companies were properly served, and ordered them to appear for arraignment.  In February 2015, the Fourth Circuit Court of Appeals denied Kolon’s petition for extraordinary relief seeking reversal of the district court’s order.

Five former Kolon executives and employees, all of South Korea, were charged in an August 2012 indictment filed in the Eastern District of Virginia: Jong-Hyun Choi, 58, a senior executive who oversaw the Heracron Business Team; In-Sik Han, 52, who managed Kolon’s research and development related to Heracron; Kyeong-Hwan Rho, 49, the head of the Heracron Technical Team; Young-Soo Seo, 51, the general manager for the Heracron Business Team; and Ju-Wan Kim, 42, a manager on the Heracron Business Team.

None of these individuals has appeared in the United States to face the charges.  The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

The case was investigated by the FBI’s Richmond Division.  The case is being prosecuted by Assistant U.S. Attorneys Kosta S. Stojilkovic and Matthew Burke of the Eastern District of Virginia, Trial Attorney John W. Borchert of the Criminal Division’s Fraud Section and Senior Counsel Rodolfo Orjales of the Criminal Division’s Computer Crime and Intellectual Property Section.  The Criminal Division’s Office of International Affairs has provided valuable assistance.

The U.S. District Court for the Southern District of Florida today granted the Justice Department’s motion for summary judgment in United States v. Florida Department of Corrections, holding that the Department of Corrections’ failure to provide a kosher diet violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA).  Consuming a kosher diet is central to the religious observance of hundreds of Florida prisoners.  For years, the Department of Corrections’ policy had forced these prisoners to violate their core beliefs on a daily basis by eating non-kosher meals. 

“Religious freedom is a cornerstone of our pluralistic society,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “State and local correctional facilities incarcerate individuals from a wide variety of faith groups and religious backgrounds.  Accommodating these prisoners’ religious exercise is a core tenet of effective prison management.  It reduces tension and disciplinary incidents, fosters learning and self-reflection and ultimately eases prisoners’ transition back into mainstream society.” 

Congress enacted RLUIPA unanimously, recognizing that religion plays an indispensable role in the management of correctional facilities and the rehabilitation of prisoners.  To achieve Congress’ goal of protecting prisoners’ religious liberty, RLUIPA prohibits policies that substantially burden prisoners’ religious exercise unless those policies are the least restrictive means of furthering a compelling government interest.  The act allows the Justice Department to remedy violations through civil litigation.  The Justice Department has previously used RLUIPA to secure prisoners’ access religious texts, wear religiously significant clothing, consume religious diets and observe their faith by maintaining beards or long hair.

The Special Litigation Section of the Justice Department’s Civil Rights Division in Washington, D.C. filed suit against the Florida Department of Corrections in 2012 after a 15-month investigation found that the failure to offer a kosher diet violated RLUIPA.  The case number is 2012-cv-22958 (S.D. Fla).

Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.

The Justice Department today announced an agreement with J & R Associates, the owner and operator of the Royal Park Apartments in North Attleboro, Massachusetts, to resolve allegations of discrimination against families with children in violation of the Fair Housing Act.

The lawsuit, filed today in U.S. District Court of the District of Massachusetts, alleges that J & R Associates discriminated against families with children seeking to rent units at Royal Park Apartments by maintaining and enforcing policies that segregate families with children in certain buildings and restrict them to certain floors and units within the 224-unit complex.  The allegations are based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.

Under the terms of the agreement, which is in the form of a consent order and still must be approved by the court, J & R Associates will establish a settlement fund in the amount of $135,000 to compensate victims of their discriminatory practices.  The defendant also will pay $7,500 in civil penalties to the United States.  The agreement requires J & R Associates to take steps to ensure that families with children no longer are restricted from renting units anywhere at Royal Park Apartments.  

“Discrimination against families because they have children limits their ability to find suitable housing and will not be tolerated,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division.  “We appreciate the defendant’s cooperation with our investigation and willingness to resolve the claims.”

“Families should be able to rent and live where they choose, without being discriminated against because they have children,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts.  “My office remains committed to enforcing federal civil rights laws to ensure equality for the residents in this district.”

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.  More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.  Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov or contact HUD at 1-800-669-9777.

The Justice Department announced that Huntsville, Alabama, Police Department Officer Brett Russell, 48, has been charged with deprivation of rights under color of law for allegedly assaulting and injuring G.H., a detainee, on Dec. 23, 2011.  Russell also has been charged with obstruction of justice for allegedly filing a false police report regarding this incident.

The indictment identifies the subject of the arrest by the initials, “G.H.”  According to the indictment, Russell falsely stated in his incident report that G.H. kicked at officers, attempted to head-butt officers while they transported him to Russell's vehicle, that he was told to stop resisting several times but would not comply and that he was transported to the Huntsville metro jail “without incident.”  Russell omitted from his report that he "had struck G.H. with his fist and kneed G.H. in the body," as the indictment says.

Russell faces a maximum sentence of 10 years in prison for the civil rights charge and 20 years for the obstruction charge.  An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty.

The investigation by the Florence Resident Agency of the FBI is ongoing.  The case is being prosecuted by Trial Attorney Carroll McCabe of the Civil Rights Division and Assistant U.S. Attorney Xavier O. Carter Sr. of the Northern District of Alabama.

     ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that ALBERT PORTUSACH MENDIOLA, JR., age 32, of Tamuning, was sentenced on April 28, 2015, before Senior Judge Alex R. Munson, in the District Court of Guam, to 46 months imprisonment, three years supervised release and 50 hours community service.

     Defendant pled guilty to Possession with Intent to Distribute Methamphetamine.  MENDIOLA was arrested on December 5, 2012 with 9.7 grams of methamphetamine.  He also had an electronic scale, several cut straws and plastic baggies in his possession.

     This investigation involved federal agents of the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and officers from the Guam Police Department (GPD).  The case was prosecuted by Assistant U.S. Attorney Clyde Lemons, Jr.

A U.S. citizen charged in connection with the operation of a series of fraudulent business opportunities based in Costa Rica pleaded guilty today in Miami, the Justice Department announced. 

John White was charged in a Nov. 29, 2011, indictment in the Southern District of Florida with conspiracy to commit mail and wire fraud as well as mail fraud and wire fraud counts.  White was arrested on Feb. 9, 2012, in Costa Rica pursuant to the indictment, and extradited to the United States on Feb. 11.  As part of his guilty plea to the conspiracy charge, White, also known as Gregory Garrett, admitted that he and his co-conspirators fraudulently sold beverage and greeting card business opportunities to victims in the United States.

The case against White is part of the government’s continued nationwide crackdown on business opportunity fraud.  In addition to White, 11 other defendants have been charged in connection with related business opportunity fraud ventures that operated in Costa Rica.  Nine of those other defendants have been convicted in the United States with sentences ranging from three to 16 years in prison.  Two remaining defendants are not yet in the custody of the United States.  

“Business opportunity schemes target innocent victims who simply want to work for the American dream,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “We will continue to prosecute those who commit fraud and take advantage of those seeking to start a new business.” 

As part of his guilty plea, White admitted that from 2005 to 2008, he and his co-conspirators fraudulently induced purchasers in the United States to buy business opportunities in USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc. and The Coffee Man Inc.  White and his co-conspirators claimed that these opportunities would allow purchasers to sell coffee and greeting cards from display racks located at other retail establishments.  The business opportunities cost thousands of dollars each and most purchasers paid at least $10,000.  Each company operated for several months and after one company closed, the next opened.

White admitted that the conspiracy used various means to make it appear to potential purchasers that the businesses were located entirely in the United States.  The companies used bank accounts, office space and other services in the Southern District of Florida and elsewhere.  In reality, White and his co-conspirators operated out of call centers in Costa Rica. 

White admitted that he and his co-conspirators made numerous false statements to potential purchasers of the business opportunities, including that purchasers likely would earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.  Potential purchasers also were falsely told that the profits of the companies were based in part on the profits of the business opportunity purchasers, thus creating the false impression that the companies had a stake in the purchasers’ success and in finding good locations.

As alleged in the indictment against White and others, the companies employed various types of sales representatives, including fronters, closers and references.  A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement.  A closer subsequently spoke to potential purchasers to close deals.  References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities.  The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser’s merchandise display racks.  White admitted that he worked as a fronter and reference using assumed names.

White faces a statutory maximum sentence of 25 years in prison, a fine and mandatory restitution on the conspiracy count.  U.S. District Court Judge Patricia A. Seitz set a sentencing hearing for Aug. 5 at 10 a.m., at the federal courthouse in Miami.

“This international and domestic investigation shows the Postal Inspection Service’s resolve to protect Americans from business opportunity scams,” said Postal Inspector in Charge Ronald J. Verrochio of the U.S. Postal Inspection Service (USPIS) Miami Division. 

Principal Deputy Assistant Attorney General Mizer commended the investigative efforts of USPIS.  The case is being prosecuted by Trial Attorney Alan Phelps of the Civil Division’s Consumer Protection Branch.

Chad Ducey, 39, of Fishers, Indiana, pleaded guilty yesterday for his role in a multi-state scheme to defraud biodiesel buyers and U.S. taxpayers by fraudulently selling biodiesel incentives.  His two brothers, Chris Ducey, 48, of North Webster, Indiana, and Craig Ducey, 44, of Fishers, pleaded guilty last week for their roles in the same scheme.  The Ducey brothers operated E-biofuels LLC, from a facility in Middletown, Indiana.  As part of the scheme, they sold over 35 million gallons of biodiesel to customers for more than $145 million by falsely claiming that the fuel was eligible for federal renewable energy incentives, when they knew it was not.  In addition, Craig Ducey pleaded guilty to a related $58.9 million securities fraud, which victimized over 625 investors and shareholders of Imperial Petroleum, a publicly-traded company and the parent company of E-biofuels, announced Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division and U.S. Attorney Josh J. Minkler of the Southern District of Indiana.  

“This wide ranging criminal conspiracy sought to undermine the biofuels program and its positive benefits to our nation’s economy and environment,” said Assistant Attorney General Cruden.  “This case should send a strong message that we are watching this market very closely and we won’t allow lawbreakers to pursue profits at the expense of our nation’s interests.”

“There are opportunities in Indiana for innovators in agriculture and biofuels,” said U.S. Attorney Minkler.  “The Duceys and their co-conspirators in New Jersey undercut those opportunities by exchanging greed and fraud for innovation. These criminal prosecutions send the message that a prison sentence waits at the end of that exchange.”

“This kind of criminal activity has real consequences, including undermining a law that reduces our impact on climate change,” said Assistant Administrator Cynthia Giles for Enforcement and Compliance Assurance for the Environmental Protection Agency (EPA).  “Today’s guilty plea demonstrates EPA’s commitment, working closely with our partners at the Department of Justice, to pursue criminal cases vigorously and protect companies that play by the rules.”

From 2007 through 2012, E‑biofuels had a biodiesel manufacturing plant in Middletown.  Biodiesel is a fuel that can be used in diesel engines and that is made from renewable resources, including soybean oil and waste grease from restaurants.  Under the Energy Independence and Security Act, properly manufactured biodiesel was eligible for a one dollar per gallon tax credit as well as another valuable credit called a Renewable Identification Number (RIN) that petroleum refiners and importers must comply with to satisfy their federal renewable fuel obligations.

The Ducey brothers admitted that they knew that E-biofuels was fraudulently reselling biodiesel that they obtained from co-conspirators in New Jersey, which had already been used to claim biodiesel incentives.  By falsely claiming to have made it themselves in Middletown, the Ducey brothers and their co-conspirators created a second set of invalid incentives, which they passed on to their customers.  They realized huge per gallon profits through this scheme, sometimes in excess of $12,000 per truckload.  Over the course of approximately two years, the co-conspirators fraudulently sold more than 35 million gallons of fuel for a total cost of over $145 million.  The co-conspirators and their companies realized more than $55 million in gross profits, at the expense of their customers and U.S. taxpayers.

The Ducey brothers pleaded guilty to conspiracy, false claims against the Internal Revenue Service (IRS), wire fraud and lying to the EPA and the IRS.  In particular, Chad Ducey, an engineer by training, caused a third-party engineer to submit false reports to justify the production at E-biofuels.  Those reports claimed that E-biofuels was using the chemical process of transesterification to produce biodiesel, when in fact, the company simply re-sold biodiesel that had been made by others and had already been used to claim biodiesel incentives. 

 “The object of this interstate scheme created by the Ducey brothers and their co-conspirators was to defraud the government and the taxpaying public,” said Special Agent in Charge Stephen Boyd of IRS Criminal Investigation.  IRS Criminal Investigation is vigilant in our investigations of this scheme and other schemes that defraud honest, hardworking, Americans.  We will continue to work with the United States Attorney’s Office to prosecute all those involved. 

“This investigation resulted in the disruption of one of the largest tax and securities fraud schemes in Indiana history,” said Special Agent in Charge W. Jay Abbott for FBI’s Indianapolis division.  “The FBI, with federal partners, identified and investigated a group who manipulated and utilized federal governmental programs to line their pockets by fraud.  They deceived customers, shareholders, and the American public.  This type of fraudulent activity is not a victimless crime – it harms the American people and the economy.”

The Ducey brothers face up to 20 years of imprisonment on some of the charges, as well as large fines and the requirement that they provide full restitution to the victims of this crime, which include U.S. taxpayers, truck stop companies, fuel traders and others.  Craig Ducey will also have to pay restitution to the victims of the securities fraud.  The co-conspirators will also have to forfeit $7.5 million in seized funds, jewelry, artwork, cars and homes they purchased with the funds obtained through the scheme.

The New Jersey co-conspirators, Joseph Furando and Katirina Pattison, have already pleaded guilty for their involvement in the scheme, along with the companies they operated, CIMA Green and Caravan Trading Company, both previously located in Park Ridge, New Jersey.

The case is being prosecuted by Senior Litigation Counsel Steven D. DeBrota and of the U.S. Attorney’s Office of the Southern District of Indiana, Assistant Chief Thomas T. Ballantine of the Environmental Crimes Section of the Department of Justice’s Environment and Natural Resources Division and Special Assistant U.S. Attorney Jake Schmidt of the Southern District of Indiana and Senior Attorney for the Securities and Exchange Commission.

The collaborative investigation that brought this case to fruition is the result of work by EPA’s Criminal Investigation Division, IRS- Criminal Investigation, the FBI and the Securities and Exchange Commission, with assistance during the investigation by the U.S. Secret Service and the U.S. Department of Agriculture’s Office of Inspector General-Investigations.

A Smiths Creek, Michigan, resident who specialized in repairing classic and rare cars was convicted today by a federal jury in the Eastern District of Michigan of one count of tax evasion and four counts of failure to file income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

According to the evidence presented at trial, the Internal Revenue Service (IRS) assessed Terry Myr approximately $195,000 in taxes, interest and penalties for his failure to report all of his income for the years 2000 through 2003.  Myr willfully evaded payment of this tax assessment.  To prevent the IRS from collecting the taxes that he owed, Myr transferred property that he owned to a third party, used nominee companies to conceal his income and assets and otherwise dealt in cash.  In addition, in 2009, Myr sold a rare Ferrari car engine for $610,000 and attempted to hide the proceeds.  The evidence established that although Myr was required to file individual federal income tax returns, he had not filed a tax return or paid federal income taxes since 2001. 

Myr faces a statutory maximum sentence of five years in prison and a $250,000 fine for the tax evasion count and a statutory maximum sentence of one year in prison and a $100,000 fine for each of the four failure to file counts.  Myr’s sentencing is scheduled for Aug. 25, before U.S. District Court Judge Nancy Edmunds.

Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Tiwana Wright and Kenneth Vert 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, the Department of Justice, the Environmental Protection Agency (EPA) and the state of California announced a settlement requiring the Lehigh cement plant near Cupertino, California, to reduce toxic discharges of selenium and other metals to Permanente Creek, a tributary of San Francisco Bay.  The company, owned by Hanson Permanente Cement Inc. and operated by Lehigh Southwest Cement Co., will spend more than $5 million to install wastewater treatment and make other facility improvements to prevent future violations.  The company will also pay $2.55 million in civil penalties to settle the case.

The settlement addresses Lehigh’s and Hanson’s violations of the Clean Water Act.  The Cupertino facility routinely discharged excessive selenium into Permanente Creek in violation of Lehigh’s permits from at least 2009 to 2014.  The plant’s discharges also routinely exceeded standards for total suspended solids, total dissolved solids, turbidity, and pH and in some cases exceeded standards for mercury, hexavalent chromium, nickel and thallium.

“Today’s Clean Water Act settlement, done jointly with the state of California, will remove selenium and other toxic substances from Permanente Creek and help protect the fragile and life-sustaining ecosystem of San Francisco Bay,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division.  “By bringing this older facility up to contemporary standards, and by pushing it to introduce cutting-edge treatment technology, the Department of Justice and our partners are helping create a level playing field, where all industry members are held to the same standards and no company can gain an economic advantage over its competitors by shortchanging environmental compliance.”

“EPA and California are working together to enforce the Clean Water Act and help restore San Francisco Bay,” said Regional Administrator Jared Blumenfeld for EPA for the Pacific Southwest.  “Every action we take to remove selenium and other toxic metals improves water quality and leads to a healthier and more resilient Bay.” 

“Lehigh Cement discharged millions of gallons of industrial wastewater that flowed into the San Francisco Bay,” said Attorney General Kamala D. Harris for California.  “This settlement holds Lehigh Cement accountable for its actions and will prevent future toxic discharges.  I thank our state and federal partners for their work to protect this precious resource and consumers from the serious environmental and health damage caused by water pollution.”

“This settlement will result in important reductions in pollutant discharges, in facility upgrades, and in improvements to help protect and restore water quality in Permanente Creek and San Francisco Bay,” said Executive Officer Bruce Wolfe for the San Francisco Bay Regional Water Board.  “We will continue our multiagency efforts to regulate all water quality aspects of this facility, including installation of the full-scale wastewater treatment system, restoration of stream habitat and control of stormwater runoff.” 

Since at least 2009 to 2014, the limestone mine and cement plant discharged millions of gallons daily of quarry process water and stormwater polluted with thousands of pounds of sediment and hundreds of pounds of selenium and other toxic metals, to Permanente Creek, in violation of the federal Clean Water Act.  The settlement requires Lehigh to construct an advanced wastewater treatment system to significantly reduce its selenium and other metals discharges.  Lehigh already installed an interim treatment system and a permanent system will be completed by 2017.  Lehigh will make other facility improvements to remove sediment from its stormwater runoff, spending more than $5 million overall to come into compliance.

Selenium is a naturally occurring element in limestone and other rock formations.  When discharged at high concentrations to waterways, selenium becomes toxic to fish and other aquatic life and to birds and other animals that consume selenium-contaminated aquatic organisms.  Permanente Creek, to which the Lehigh cement facility discharges, is listed as “impaired” for selenium under the Clean Water Act.  Permanente Creek provides important habitat for red-legged frogs, a species listed as threatened under the Endangered Species Act.   

The proposed Clean Water Act settlement, subject to a 30-day public comment period and court approval, is available at: www.justice.gov/enrd/Consent_Decrees.html

For more information about the investigation and settlement, including photos, visit: http://www.epa.gov/region9/mediacenter/lehigh/

Learn more about EPA’s work to restore San Francisco Bay: www2.epa.gov/sfbay-delta/

More information about the San Francisco Bay Regional Water Board’s permits and enforcement actions is available at: www.waterboards.ca.gov/sanfranciscobay/water_issues/hot_topics/lehigh.shtml

The Department of Justice and the Consumer Product Safety Commission (CPSC) jointly announced today that Black & Decker (United States) Inc. has agreed to pay a $1.575 million penalty to settle allegations that it knowingly violated the reporting requirements of the Consumer Product Safety Act (CPSA) with respect to cordless electric lawnmowers that started spontaneously and that continued to operate after consumers released the lawnmower handles and removed the safety keys.  Black & Decker has also agreed to establish and maintain a compliance program with internal recordkeeping and monitoring systems to keep track of information about product safety hazards.  The settlement agreement is awaiting judicial approval.

Black & Decker has previously paid four civil penalties relating to Black & Decker’s untimely reporting of defects and risks presented by other Black & Decker products. 

“Not for the first time, Black & Decker held back critical information from the public about the safety of one of its products,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Department of Justice will continue to protect the public against companies that put profits over safety.”

“Black & Decker’s persistent inability to follow these vital product safety reporting laws calls into question their commitment to the safety of their customers,” said Chairman Elliot F. Kaye of the CPSC.  “They have a lot of work to do to earn back the public’s trust.  Companies are required to report potential product hazards and risks to CPSC on a timely basis.  That means within 24 hours, not months or years as in Black & Decker’s case.”

The complaint relates to cordless lawnmowers manufactured and sold by Black & Decker from 1995 to 2006.  According to the complaint, in as early as November 1998, Black & Decker started receiving reports that its cordless electric lawnmowers continued to run even after a user released the lawnmower’s handle and removed the safety key, referred to as a continuous-run defect.  A second defect involved lawnmowers that unexpectedly started even though the handle was released and the safety key removed, referred to as a spontaneous ignition defect. 

The United States alleged that between 1998 and 2009, Black & Decker received more than 100 complaints regarding the continuous-run or spontaneous ignition defects.  Dozens of these complaints specifically reported that the lawnmower continued to run or exhibited spontaneous ignition after the lawnmower’s handle was released and the safety key was removed.  The United States further alleged that, after consulting an outside expert, the company knew in 2004 that the lawnmowers could continue to run even if a user released the handle and removed the safety key.  Despite knowledge of all of this information, Black & Decker failed to report to the CPSC until early 2009, even though federal law requires “immediate reporting.”

The complaint further notes that at least two consumers informed Black & Decker that the lawnmower’s blades started unexpectedly while the consumer cleaned them, resulting in injury.  The complaint states that in one case, the lawnmower continued to run, with the handle released and without the safety key, for several hours while the consumer sought treatment in a hospital emergency room for injury to the consumer’s hand, and after fire department personnel arrived and removed the blade.

In addition to the civil penalty, Black & Decker agreed to be bound by a consent decree of permanent injunction that prohibits the company from committing future violations of the CPSA.  The consent decree requires that Black & Decker continue to implement and maintain a robust compliance program that ensures timely, truthful, complete and accurate reporting to the CPSC as required by law.  In addition Black & Decker is subject to liquidated damages for each day the company is not in compliance with the consent decree.

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

In agreeing to settle this matter, Black & Decker has not admitted that it knowingly violated the CPSA. 

Yamada Manufacturing Co. Ltd. has agreed to plead guilty and to pay a $2.5 million criminal fine for its role in a conspiracy to fix prices and rig bids for manual (non-electric or non-hydraulic-powered) steering columns installed in cars sold in the United States and elsewhere, the Department of Justice announced today. 

According to a one-count felony charge filed today in U.S. District Court of the Southern District of Ohio in Cincinnati, Yamada Manufacturing, based in Kiryu City, Gunma Prefecture, Japan, conspired to rig bids and fix prices of steering columns sold to certain subsidiaries of Honda Motor Co. Ltd. in the United States and elsewhere.  According to the charge, Yamada carried out the conspiracy from at least as early as the fall of 2007 and continuing until as late as September 2012.  Yamada Manufacturing has agreed to cooperate in the department’s ongoing investigation.  The plea agreement is subject to court approval.

“Yamada’s collusion deprived Honda and its U.S. customers the benefits of freely set prices for manual steering columns, a simple but necessary auto part,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “Companies that conspire to undermine competition and harm U.S. consumers will continue to be held accountable for their crimes.”

According to the charge, Yamada Manufacturing, and others participating in the scheme, conspired through a meeting and conversations in which they discussed and agreed upon bids and price quotations to be submitted to Honda.  Based on those discussions, Yamada Manufacturing and its co-conspirators sold steering columns to Honda at collusive and non-competitive prices and employed measures to keep their conduct secret.

Including Yamada Manufacturing, 35 companies and 29 executives have pleaded guilty or agreed to plead guilty in the division’s ongoing investigation into price fixing and bid rigging in the auto parts industry and have agreed to pay a total of more than $2.5 billion in criminal fines. 

Yamada Manufacturing is charged with one count of price fixing and bid rigging in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cincinnati Field Office with assistance from the U.S. Attorney’s Office for the Southern District of Ohio.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Cincinnati Field Office at 513-421-4310.

Yamada Information

Attorney General Loretta Lynch released the following statement regarding arguments before the U.S. Supreme Court on same-sex marriage:

“I am committed – as is this department – to ensuring equal dignity and equal treatment for all members of society, regardless of sexual orientation.  As we argued today before the Supreme Court, same-sex couples deserve that treatment now. ”

A Cranston, Rhode Island, man was sentenced today to prison for tax fraud in the District of Rhode Island, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

John Fall was sentenced by U.S. District Judge John J. McConnell to serve 30 months in prison and three years of supervised release.  On Jan. 26, after a federal jury trial in Providence, Rhode Island, Fall was convicted of one count of corruptly endeavoring to obstruct and impede the IRS, one count of tax evasion and two counts of aiding and assisting in the preparation and filing of false corporate tax returns.

According to the evidence presented at trial, Fall was a real estate consultant who bought, sold and brokered real estate.  Fall also participated in handling the financial affairs of his wife and her businesses, including her dental practice, Comfort Dental Inc., and Broad Street Investments.  Between 1999 and 2010, Fall used numerous nominee entities and business names to conceal his business and financial transactions.  Fall also concealed his transactions using multiple bank accounts, including commingled or “warehouse” bank accounts in at least six states, as well as the entities Comfort Dental and Broad Street Investments.  To further disguise business and financial transactions, Fall used aliases to conceal his ownership and control over his nominee entities.  Fall filed false federal income tax returns for 1998 and 1999, and failed to file tax returns for the tax years 2000 through 2010.  The IRS audited Fall for tax years 1998 through 2000, and assessed taxes due and owing totaling approximately $72,000. 

Fall also caused the filing of false tax returns on behalf of Comfort Dental for the years 2005 through 2007.  Fall caused his wife’s businesses to make payments to various entities that he controlled, which were falsely recorded on the corporate tax returns as deductible business expenses.  When Comfort Dental and Fall’s wife were audited by the IRS in late 2008, Fall attempted to obstruct the audit by attempting to obstruct his wife’s compliance with an IRS summons and by encouraging his wife’s accountant to not provide the IRS with information requested.  Instead, Fall provided false and fraudulent information and documentation to the IRS concerning the nature of the payments by Comfort Dental and Broad Street Investments to his various entities.

Acting Assistant Attorney General Ciraolo commended the special agents of IRS – Criminal Investigation, who investigated the case.  Ciraolo also thanked Assistant Chief John Kane and Trial Attorney Jeffrey Bender of the Tax Division, who prosecuted the case, and the U.S. Attorney’s Office of the District of Rhode Island for their substantial assistance.

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

The Department of Justice released the following readout of meetings attended by senior department officials to address the ongoing situation in Baltimore:  

At the direction of Attorney General Loretta Lynch, the head of the Civil Rights Division, Vanita Gupta, the director of the Community Oriented Policing Services (COPS) office, Ron Davis, and the head of the Community Relations Services (CRS) office, Grande Lum, participated in several meetings today with city leadership, law enforcement, faith leaders, young people and members of the community to discuss the unrest in Baltimore following the death of Freddie Gray.  Department officials reiterated their offer to the city to provide federal resources, such as technical assistance to the Baltimore Police Department.  Department officials also reaffirmed their commitment to expeditiously and thoroughly carryout the ongoing, independent civil rights investigation into the death of Mr. Gray. 

The COPS office assured law enforcement and the community members that the Collaborative Reform Review into the Baltimore Police Department will continue and that the department plans to announce their initial report in the coming weeks.  COPS encouraged faith leaders and members of the community who attended the meetings to participate in the Collaborative Reform Initiative and share their stories and provide information that may be useful to the team leading the review.  Department officials heard from residents about concerns regarding the Baltimore Police Department and the lack of trust that they feel exists between the police and community.

CRS shared that their conciliators have been on the ground in Baltimore since Thursday and will continue to bring in staff as necessary to help open lines of communication within the community and between the community and local officials. 

The department officials thanked community members that have been engaged in constructive discussions, discouraging violence and encouraging peaceful demonstrations.  The department officials met with the officer who is still hospitalized after being injured during the violence on Monday afternoon and reiterated that officer safety must remain a priority.  Department officials also met with the family of Mr. Gray and expressed their condolences on behalf of the department.  

The department officials provided continuous updates throughout the day to Attorney General Lynch and her closest advisors.

The Justice Department today announced a comprehensive settlement agreement with the Los Angeles County Sheriff’s Department (LASD) that will support wide-ranging reforms in LASD’s Antelope Valley stations in the cities of Lancaster and Palmdale.  The Justice Department and the county of Los Angeles have agreed to enter into a court-enforceable settlement agreement that will require reforms to LASD’s data collection, training and accountability systems to improve the quality and effectiveness of LASD’s interactions with Antelope Valley residents, and reduce bias in its practices.  The settlement agreement also provides for a monetary fund of $700,000 to compensate persons harmed by LASD’s alleged violation of the Fair Housing Act, and a civil penalty of $25,000 to the United States.

The agreement follows the department’s issuing of a findings letter in June 2013 following an investigation which began in August 2011.  Sheriff Jim McDonnell, his predecessors and Housing Authority of the County of Los Angeles Executive Director Sean Rogan were all cooperative throughout the investigation and began working with the department to negotiate a remedy to the problems revealed by the investigation.

This settlement resolves claims from the department's investigation which found patterns of excessive use of force, biased policing practices, including housing discrimination, and unlawful searches and seizures.  LASD has already begun to implement many of the negotiated reforms under the leadership of Sheriff Jim McDonnell.  The Justice Department and the county filed the settlement agreement with the United States District Court for approval and entry as an order.

“Constitutional policing and effective policing go hand in hand,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “We are confident that this settlement represents a commitment by the Los Angeles County Sheriff’s Department to respect the rights of residents and promote mutual confidence between law enforcement and the community.  This agreement puts in place a structure that will foster lawful, bias-free policing in the Antelope Valley, and ensures compensation for persons harmed by past unlawful conduct.  We look forward to continuing our positive partnership with the Los Angeles Sheriff’s Department to implement the terms of this settlement agreement and to help restore the community’s confidence in fair, equitable, and effective law enforcement.”

The investigation was brought pursuant to the Violent Crime Control and Law Enforcement Act of 1994, Title VI of the Civil Rights Act of 1964 and the Fair Housing Act.  The investigation concluded that there was reasonable cause to believe that deputies engaged in a pattern or practice of misconduct in violation of the Constitution and federal law.  The findings, which were announced in June 2013, include:

• Pedestrian and vehicle stops that violated the Fourth Amendment;

• Stops that appeared motivated by racial bias, in violation of the Fourteenth Amendment and federal statutory law;

• The use of unreasonable force in violation of the Fourth Amendment; and

• A pattern of intimidation and harassment by LASD deputies against African-Americans who held Section 8 housing choice vouchers.  The goal of that intimidation and harassment, which violated the Fair Housing Act, was to terminate African-American voucher holders from the Section 8 program and to pressure them to move out of the Antelope Valley.

Under the settlement agreement, LASD has agreed to implement comprehensive reforms to ensure lawful policing and restore public trust.  An independent monitoring team will oversee the reforms, which LASD intends to implement within four years.  In addition, the  monitoring team will provide technical assistance and publicly report on the LASD’s compliance efforts.  The settlement agreement provides for a $700,000 fund to compensate persons harmed by LASD’s alleged violation of the Fair Housing Act, and a $25,000 civil penalty to the United States.  The areas covered by the settlement agreement include:

• Stops, searches and seizures: measures to improve collection and analysis of policing data to identify instances and patterns of unlawful police-civilian contact, such as stops without adequate legal justification;
• Bias-free policing: improved training and supervisory review to prevent and identify biased or discriminatory conduct;
• Use of force: measures to improve the quality of use-of-force investigations and develop a better means to detect and correct problematic force patterns and trends;
• Policies and training: revised policies on use of force, preventing retaliation, supporting officers who report misconduct, and improving the field training program to ensure that officers develop the necessary technical and practical skills required to use force in a lawful and effective manner, with an emphasis on de-escalation and use of the minimal amount of force necessary;
• Internal and civilian complaint investigations: including standards for conducting objective, thorough and timely investigations;
• Supervision: including holding supervisors accountable for close and effective supervision; and providing guidance on effective accountability systems to improve public trust;
• Housing: measures to ensure proper limits on deputy involvement in searches of Section 8 voucher holders’ homes for compliance with program rules; and
• Community engagement: including measures to strengthen civilian involvement and feedback in setting policing priorities; public information programs to keep civilians informed of policing activities; requirements for community interaction at all levels of LASD; and establishing community advisory entities to ensure that meaningful feedback is obtained from the community.

This agreement does not resolve the department’s claims against the Housing Authority of Los Angeles County, the county of Los Angeles as it relates to the Housing Authority of the county of Los Angeles, the city of Lancaster or the city of Palmdale for related conduct under the Fair Housing Act.  Those parties are continuing to work toward a resolution.

The investigation was conducted by the Civil Rights Division.  The investigation involved an in-depth review of thousands of pages of documents, including written policies and procedures, training materials, and internal reports, data, video footage and investigative files.  Department of Justice attorneys and investigators also conducted interviews with officers, supervisors, command staff and city officials as well as spoke with hundreds of community members and local advocates, and worked with experts in police practices. 

A civilian employee from the Department of Defense pleaded guilty today to one count of engaging in illicit sexual conduct with a minor in a foreign place, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

William Curry McGrath, 55, of San Antonio, Texas, pleaded guilty before U.S. District Judge Lee H. Rosenthal of the Southern District of Texas.  A sentencing hearing is scheduled for Aug. 6, 2015.  McGrath was arrested in October 2014, and has been in custody since his arrest. 

According to admissions made in connection with his guilty plea, McGrath was the Director of the Network Enterprise Center at the Soto Cano Air Base in Comayagua, Honduras, from December 2012 until his departure in March 2014.  McGrath admitted that while stationed in Honduras, he met a 13 year-old girl and began a sexual relationship with her.  He further admitted that he gave the girl money, gifts and other items of value in exchange for sexual acts.

The investigation was conducted by the FBI’s Houston Division.  The case is being prosecuted by Trial Attorney Amy E. Larson of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Sherri Zack of the Southern District of Texas. 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Franklin Brown, 35, and Eric Walters, 39, both former police officers with the city of Marion Police Department in Marion County, South Carolina, were sentenced to serve 18 months and one year and one day in prison, respectively, today in federal court in Florence, South Carolina, by U.S. District Court Judge R. Bryan Harwell for repeatedly tasing a former local female resident during the course of her detainment.  For both defendants, three years of supervised release will follow the prison sentences and they each face a $100 special assessment.  Brown and Walters previously pleaded guilty to violating the victim’s civil rights during this incident.

According to court documents, on April 2, 2013, in the course of detaining the victim, Walters tased the victim causing her to fall to the ground and injure her head.  Once she was on the ground, Walters continued to tase the victim multiple times.  Brown subsequently arrived on scene and proceeded to tase the victim as she was seated on the curb, restrained in handcuffs and surrounded by law enforcement.  Walters and Brown admitted there was no legitimate law enforcement purpose for repeatedly tasing the victim as she did not pose a threat to the officers.

“The defendants abused their authority as law enforcement officers by repeatedly tasing a defenseless, compliant victim,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “Today’s sentence is a reminder that this type of abusive and dishonorable behavior will not go unpunished.”

“I thank the Marion Police Department, the FBI and the Civil Rights Division,” said U.S. Attorney Bill Nettles of the District of South Carolina.  “Due to their collective efforts in concert with our office, the officers in this case were brought to justice.”

Today’s sentence resulted from the investigative work of the FBI’s Myrtle Beach Division.  The case is being prosecuted by Trial Attorneys Henry Leventis and Nicholas Murphy of the Civil Rights Division, and Assistant U.S. Attorney John Potterfield of the District of South Carolina.

Attorney General Loretta Lynch released the following statement on the situation in Baltimore, Maryland:

“I condemn the senseless acts of violence by some individuals in Baltimore that have resulted in harm to law enforcement officers, destruction of property and a shattering of the peace in the city of Baltimore.  Those who commit violent actions, ostensibly in protest of the death of Freddie Gray, do a disservice to his family, to his loved ones, and to legitimate peaceful protestors who are working to improve their community for all its residents.

“The Department of Justice stands ready to provide any assistance that might be helpful.  The Civil Rights Division and the FBI have an ongoing, independent criminal civil rights investigation into the tragic death of Mr. Gray.  We will continue our careful and deliberate examination of the facts in the coming days and weeks.  The department’s Office of Community Oriented Policing Services has also been fully engaged in a collaborative review of the Baltimore City Police Department.  The department’s Community Relations Service has already been on the ground, and they are sending additional resources as they continue to work with all parties to reduce tensions and promote the safety of the community.  And in the coming days, Vanita Gupta, head of the Civil Rights Division, and Ronald Davis, Director of Community Oriented Policing Services, will be traveling to Baltimore to meet with faith and community leaders, as well as city officials.  

“As our investigative process continues, I strongly urge every member of the Baltimore community to adhere to the principles of nonviolence.  In the days ahead, I intend to work with leaders throughout Baltimore to ensure that we can protect the security and civil rights of all residents.  And I will bring the full resources of the Department of Justice to bear in protecting those under threat, investigating wrongdoing, and securing an end to violence.”

On Thursday, April 23, a federal jury convicted a naturalized U.S. citizen and former Iranian national of violations of U.S. export and money laundering laws, arising from his involvement in a scheme to purchase marine navigation equipment and military electronic equipment for illegal export to, and end-use in, Iran, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Laura E. Duffy of the Southern District of California.

Arash Ghahreman, 45, of Staten Island, New York, was convicted of attempted export to Iran, and conspiracy to do the same, in violation of the Iran Trade Embargo (formerly known as the Iranian Transactions and Sanctions Regulations); smuggling goods from the United States, and conspiracy to the same; and aiding and abetting the transfer of money from Dubai, United Arab Emirates (UAE), to the United States, in support of an illegal export activity, and conspiracy to do the same.  The case involved a seven-day jury trial, beginning on April 13, 2015, and ending on April 23, 2015, when the jury returned a guilty verdict on seven counts of a nine-count superseding indictment after one day of deliberation.  The jury was unable to reach a verdict on two of the counts involving the attempted exportation and smuggling of a fiber optic gyrocompass, used in both military and civilian marine navigation applications.

“The defendants used a front company to illegally send U.S. goods and technologies – including those used in military applications – to Iran,” said Assistant Attorney General Carlin.  “These violations of the Iran Trade Embargo have the potential to harm U.S. national security objectives, and we will continue to hold accountable those who seek to circumvent its restrictions.  I would like to thank the agents and prosecutors for their hard work in obtaining this conviction.”

The evidence presented at trial showed that Ghahreman acted an agent of an Iranian procurement network which used a front company in Dubai to acquire U.S. goods and technologies for illegal transshipment to, and end-use in, Iran.  Co-defendant Koorush Taherkhani, 43, an Iranian national and resident, was the managing director and founder of that front company, co-defendant TIG Marine Engineering Services.  Because of his German nationality, co-defendant Ergun Yildiz, 35, a resident of UAE, was hired by Taherkhani to be the “face” of the front company, as the president/CEO of TIG Marine.  Before Ghahreman immigrated to the United States in 2007, Ghahreman and Taherkhani had been friends and dorm mates at an Iranian university, where each received a degree in marine engineering.  Upon graduation, both Ghahreman and Taherkhani worked as engineers for various Iranian shipping companies, including the Islamic Republic of Iran Shipping Lines and its subsidiaries.  After immigrating to the United States, Ghahreman was employed by various shipyards in the United States, and became a naturalized U.S. citizen.  Because of his employment and citizenship status, Ghahreman was well placed to act as an agent of the illegal procurement network. 

From December 2012 through June 17, 2013, Ghahreman and his co-defendants negotiated via email, text, telephone and meetings with U.S. Immigration Customs and Enforcement’s Homeland Security Investigations (ICE-HSI) and the Defense Criminal Investigative Service (DCIS) undercover agents to purchase marine navigation components (fiber optic gyrocompasses), military electronic components (electron tubes) and other U.S. technology for illegal export to, and/or end-use in, Iran.  The undercover agents were posing as brokers of U.S. goods and technology, willing to sell U.S. goods to the defendants for end-use in Iran.  Ultimately, as a result of these negotiations, Ghahreman and his co-defendants agreed to purchase four Navigat-2100 fiber optic gyrocompasses and 50 Y-690 units (electron tubes).  Pursuant to that agreement, Ghahreman and his co-defendants wired approximately $60,000 in partial payment for the gyrocompasses and electron tubes from a bank in Dubai to the undercover agents’ bank account.  Ultimately, on June 17, 2013, ICE-HSI agents arrested Ghahreman and Yildiz after they traveled to the United States and took partial delivery of one gyrocompass and two electron tubes and attempted to ship the items indirectly to Iran, via third countries.

Ghahreman is scheduled to be sentenced on July 17, 2015, before U.S. District Judge Dana M. Sabraw of the Southern District of California.  Yildiz pleaded guilty to conspiracy to export to Iran on Oct. 9, 2014, and is scheduled to be sentenced on May 8, 2015, before Judge Sabraw.  Co-defendant Taherkhani, an Iranian national and resident, remains a fugitive.  Co-defendant TIG Marine is a Dubai company.

The case was investigated by ICE-HSI and DCIS.  The case was prosecuted by Assistant U.S. Attorneys Shane P. Harrigan and Timothy D. Coughlin of the Southern District of California, with assistance provided by the Justice Department’s National Security Division.

Medical device manufacturer Medtronic Corporation and two of its top executives have agreed to resolve allegations that they violated various provisions of the federal Food, Drug and Cosmetic Act  (FDCA) with regard to the company’s SynchroMed infusion pump.  At the request of the U.S. Food and Drug Administration (FDA), the Justice Department today filed a complaint and a proposed consent decree in the U.S. District Court for the District of Minnesota.  The complaint alleges that Medtronic, its chief executive officer, S. Omar Ishrak, and its senior vice president, Thomas M. Tefft, have been distributing medical devices in interstate commerce that are adulterated because they were not manufactured in accordance with current good manufacturing processes.

“The proposed consent decree will require Medtronic and its leadership to commit to making changes in their process that will benefit the American public by ensuring that their products are safe and effective for patients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Department of Justice will not permit medical device manufacturers to shirk their responsibility to ensure that the devices that patients rely upon are safe.”

The defendants design, manufacture and distribute the SynchroMed II implantable infusion pump system, which is used to deliver medication to treat cancer, chronic pain and severe spasticity.  Medical devices such as the Medtronic’s SynchroMed system are required to comply with FDA’s quality system (QS) regulations.  The complaint alleges that Medtronic repeatedly failed to correct violations of the QS regulations with regard to the SynchroMed II.

The FDA conducted multiple inspections of Medtronic Neuromodulation’s manufacturing facilities in Columbia Heights, Minnesota, between 2006 and 2013.  These inspections revealed significant violations of the QS regulations, many of which related to design controls, complaint handling, and corrective and preventive action.  Those regulations ensure that when a device is found to have malfunctioned or caused serious injury to a patient, the complaint is thoroughly investigated and necessary validated design changes are implemented.  The problems that the FDA observed with the SynchroMed II pump could result in an over- or under-infusion of medication for patients.

Under the terms of the agreement, which must be approved by the court, Medtronic and the two individual defendants have agreed to stop manufacturing, designing and distributing new SynchroMed II pump systems except in extraordinary cases, such as when a treating physician certifies that a SynchroMed II pump is medically necessary for an individual patient’s treatment.  The proposed consent decree also requires Medtronic to retain an expert to help Medtronic correct its regulatory violations.  Medtronic may not resume distributing the SynchroMed II pump system until it receives permission from the FDA.

“We will continue to work with the Food and Drug Administration and our partners at the Consumer Protection Branch of the Department of Justice to identify and remedy instances in which medical technology manufacturers in Minnesota fail to adhere to best practices,” said U.S. Attorney Andrew M. Luger of the District of Minnesota.  “As an industry leader, Medtronic and its executives must adhere to the high-quality manufacturing processes required under the FDCA.”

The matter is being handled by the Civil Division’s Consumer Protection Branch, the U.S. Attorney’s Office of the District of Minnesota and the FDA’s Office of Chief Counsel.

The Justice Department announced today that it has reached an agreement with Compass Career Management L.L.C. (Compass Career College) of Hammond, Louisiana, to remedy violations of the Americans with Disabilities Act (ADA).  Compass Career College is a private provider of vocational education and career training.

Title III of the ADA prohibits public accommodations, such as private vocational and technical colleges, from discriminating against people with disabilities, including those with HIV.  Based on its investigation, the department determined that the college conditionally accepted an applicant into its Licensed Practical Nursing (LPN) program but issued a follow-up letter to the applicant after the college discovered that the applicant has HIV.  The college’s letter discouraged the applicant from pursuing enrollment at the college.  Despite the college’s letter, the applicant attempted to finalize enrollment at the college, but the college advised the applicant that the class was full and did not admit the applicant.  The consent decree, filed today along with a complaint in the U.S. District Court for the Eastern District of Louisiana, must be approved by the court.

Under the terms of the consent decree, the college will implement a nondiscrimination policy to ensure that the college does not discriminate against persons with HIV; stop questioning applicants and students about their HIV status; train college administrators and instructors on ADA requirements and the revised policies required by the consent decree; and report to the department on its compliance with the consent decree.  In addition, the college will pay $30,000 in compensatory damages to the applicant, and will pay a civil penalty of $5,000 to the United States. 

“We continue to work to eradicate discriminatory and stigmatizing treatment of people with HIV based on unfounded fears and stereotypes,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “The ADA clearly protects individuals with HIV and other disabilities from exclusion or marginalization, including in vocational schools, trade schools, and career colleges.”

“This is an important step by the leadership of Compass Career College to ensure compliance with the ADA,” said U.S. Attorney Kenneth Polite Jr. of the Eastern District of Louisiana.  “The agreement that we are announcing today reflects the college’s commitment, and that of the Justice Department, to ensure full accessibility and opportunity for individuals with disabilities – including those with HIV – in the private educational setting.”

To read the consent decree and complaint or for more information on the ADA and HIV discrimination, visit www.ada.gov/aids.  Title III of the ADA requires public accommodations, such as private schools, to provide individuals with disabilities (including HIV), equal access to goods, services, privileges, facilities, advantages and accommodations.  For more information about the ADA, call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.

The Medical Center of Central Georgia (MCCG) has agreed to pay $20 million to settle allegations that the hospital violated the False Claims Act by billing Medicare for more expensive inpatient services that should have been billed as less costly outpatient or observation services, the Justice Department announced today.  MCCG is located in Macon, Georgia, and is the second largest hospital in the state.

“Charging the government for higher cost inpatient services when the patient care received was outpatient or observation services causes Medicare to pay more than it should,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “This department will continue its work to stop abuses of the nation’s health care resources and to ensure patients receive the most appropriate care.”

This settlement resolves the United States’ investigation into MCCG’s inpatient admission practices.  The government contends that from 2004 through 2008, MCCG violated the False Claims Act by knowingly charging Medicare for medically unnecessary inpatient admissions when the care provided should have been billed as less costly outpatient or observation services.  Because hospitals generally receive significantly higher payments from Medicare for inpatient admissions as opposed to outpatient or observation services, the admission of numerous patients whose care should have been billed as outpatient or observation services, as alleged here, can result in substantial financial harm to Medicare.

“Overcharging the government for medical services wastes our country’s limited health care resources,” said Acting U.S. Attorney John Horn of the Northern District of Georgia.  “When a provider inflates its billings, we will aggressively seek to recover the overcharges under the False Claims Act.”  

As part of this agreement, MCCG entered into a corporate integrity agreement with the U.S. Department of Health and Human Services – Office of Inspector General (HHS-OIG) that requires the company to engage in significant compliance efforts over the next five years.  Under the agreement, MCCG is required to retain an independent review organization to review the accuracy of the company’s claims for services furnished to federal health care program beneficiaries.

“Unnecessarily admitting patients who could have been treated in an outpatient or observation setting is not only a waste of taxpayer dollars, but a fundamental breach of trust,” said Special Agent in Charge Derrick L. Jackson of HHS-OIG in Atlanta.  “Medicare beneficiaries must feel secure and know that the care selected for them is in their best interest, and not merely what will generate the most revenue for the facility.”

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $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 matter was investigated by HHS-OIG and the U.S. Attorney’s Office of the Northern District of Georgia.  The claims resolved by this settlement are allegations only and there has been no determination of liability.

A Palm Beach County, Florida, man and company were sentenced for violating the International Emergency Economic Powers Act (IEEPA), as well as the terms of a denial order issued by the U.S. Department of Commerce.

The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge John F. Khin Department of Defense’s (DoD) Defense Criminal Investigative Service (DCIS), Special Agent in Charge Alysa Erichs of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) and Acting Special Agent in Charge Gordon Pomeroy of the U.S. Department of Commerce’s Office of Export Enforcement.

Russell Henderson Marshall, 53, was sentenced by U.S. District Judge Kenneth A. Marra of the Southern District of Florida to serve 41 months in prison and will be removed from the United States upon the completion of his sentence.  In imposing the sentence, Judge Marra found that the order denying export privileges issued by the Department of Commerce constituted a national security control, which subjected Marshall to an enhanced sentence.  Universal Industries Limited Inc. was sentenced to a term of one year probation and a special assessment of $400 upon a finding that the corporation is currently listed as inactive by the Florida Division of Corporations as a result of Marshall’s arrest.

Marshall and his company Universal Industries Limited Inc. were previously convicted in a 2011 case in the Southern District of Florida for violating the Arms Export Control Act, after which the Department of Commerce issued a denial order prohibiting Universal Industries Limited Inc. and its owners, agents and employees from participating in any transaction involving the export of any item subject to the Department of Commerce‘s Export Administration Regulations (EAR).  Marshall and Universal Industries Limited Inc. violated IEEPA and the U.S. Department of Commerce’s denial order by attempting to send three temperature transmitters used on F-16 fighter jets and a saddle part for the J-69 engine used on 737 military trainer aircraft to Thailand and Pakistan, respectively.

“By repeatedly taking actions that violated export control laws and an order issued by the Department of Commerce, Marshall and Universal Industries Limited Inc. actively engaged in efforts that threatened our national security,” said Assistant Attorney General Carlin.  “This sentencing serves as another reminder that we will not tolerate this activity.  Protecting our national assets, including highly sensitive technologies, from falling into the hands of those who may wish to do us harm is one of our top national security priorities.  The National Security Division commends the law enforcement agents, analysts, and prosecutors who took part ensuring justice was served.”

“National security controls exist to ensure that sensitive U.S. technologies are protected,” said U.S. Attorney Ferrer.  “Zero tolerance will be afforded individuals who knowingly continue to violate our export control laws and jeopardize the nation’s security.”

“Today's sentencing demonstrates the continued commitment of the Defense Criminal Investigative Service and partner agencies to protect sensitive U.S. defense technology from being illegally exported,” said Special Agent in Charge Khin.  “American military prowess depends on lawful, controlled exports of sensitive technology by U.S. industries, which is why DCIS will continue its present campaign to aggressively investigate and prosecute criminal violations regarding the illegal procurement or export of sensitive technology.”

“One of Homeland Security Investigation's top enforcement priorities is preventing the exportation of U.S. military products and sensitive technology, and preventing those technologies and weaponry from falling into the hands of those who might seek to harm America or its interests,” said Special Agent in Charge Erichs.  “Technology used by the United States and its allies give us a strategic military advantage, which is why HSI will continue to work with its law enforcement partners to ensure such technology doesn't fall into the hands of those opposed to U.S. national security interests.”

“The Office of Export Enforcement is committed to working with our law enforcement partners to pursue individuals who violate our nation's export control laws,” said Acting Special Agent in Charge Pomeroy.  “As the sentence in this case demonstrates, we will not allow our national security to be compromised by individuals who intentionally violate these laws.”

According to court documents and information presented during the sentencing hearing, the DoD Inspector General received a hotline complaint concerning Marshall and Universal Industries Limited Inc. in November 2012.  The subsequent investigation revealed that the defendants brokered the sale of military aircraft parts which were subject to license controls by the Department of Commerce, and which the defendants knew were intended to be illegally exported to Thailand and Pakistan.

On Feb. 6, 2015, Marshall and Universal Industries Limited Inc. entered guilty pleas to an information that charged them with knowingly and willfully engaging in negotiations concerning selling, delivering or otherwise servicing a transaction involving an item to be exported from the United States to Thailand and subject to the EAR.

Assistant Attorney General Carlin joins U.S. Attorney Ferrer in commending the investigative efforts of the DoD, DCIS, ICE-HSI and the U.S. Department of Commerce’s Office of Export Enforcement for their outstanding efforts in investigating this matter.  The case was prosecuted by Assistant U.S. Attorney Michael Walleisa of the Southern District of Florida.

Applied Materials Inc. and Tokyo Electron Ltd. abandoned their plans to merge after the Department of Justice informed the companies that their remedy proposal failed to resolve the department’s competitive concerns.

“The companies’ decision to abandon this merger preserves competition for semiconductor manufacturing equipment,” said Acting Assistant Attorney General Renata B. Hesse of the Justice Department’s Antitrust Division.  “The semiconductor industry is critically important to the American economy, and the proposed remedy would not have replaced the competition eliminated by the merger, particularly with respect to the development of equipment for next-generation semiconductors.”

The proposed merger of Applied Materials and Tokyo Electron would have combined the two largest competitors with the necessary know-how, resources and ability to develop and supply high-volume non-lithography semiconductor manufacturing equipment.

During the investigation, the division cooperated with the Korean Fair Trade Commission, China’s Ministry of Commerce, Germany’s Federal Cartel Office and competition agencies from several other jurisdictions.

Applied Materials, based in Santa Clara, California, is the largest provider of non-lithography semiconductor manufacturing equipment with approximately $9 billion in 2014 revenue.

Tokyo Electron, based in Tokyo, is the second-largest provider of non-lithography semiconductor manufacturing equipment with approximately $6 billion in 2014 revenue.

A Guatemalan national appeared in federal court in the Southern District of Texas, after being extradited to the United States from Guatemala to face criminal charges for her role in smuggling undocumented migrants to the United States for profit, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas and Director Sarah R. Saldaña of U.S. Immigration and Customs Enforcement (ICE).

Rosa Umanzor-Lopez, 35, of Guatemala, was arrested in Guatemala on Feb. 5, 2014, on a provisional arrest warrant based on a superseding indictment filed in the Southern District of Texas in December 2012.  The indictment charges her with one count of conspiracy to smuggle undocumented immigrants into the United States, three counts of bringing aliens to the United States for financial gain and three corresponding counts of encouraging and inducing an alien to come to the United States.  Three individuals also charged in the indictment have previously been convicted and sentenced.

The indictment alleges that Umanzor-Lopez and her co-defendants established a network to recruit individuals from India and elsewhere who wished to be smuggled into the United States.  The defendants then allegedly arranged for aliens to be transported to the United States through South America and Central America by various means including by air travel, automobiles, water craft and foot.

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

The investigation was conducted by ICE’s Homeland Security Investigations (HSI) in McAllen and Houston, with the assistance of U.S. Customs and Border Protection’s Alien Smuggling Interdiction Unit.  This case is being prosecuted by Trial Attorney Christina Giffin of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Leo J. Leo III and Casey MacDonald of the Southern District of Texas.  The Criminal Division’s Office of International Affairs assisted with the extradition.

The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI.  The ECT program focuses on human smuggling networks that may present particular national security or public safety risks, or present grave humanitarian concerns.  ECT has dedicated investigative, intelligence and prosecutorial resources.  ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities. 

Comcast Corporation (Comcast) abandoned its plans to acquire Time Warner Cable Inc. (Time Warner Cable) for approximately $45.2 billion after the Department of Justice informed the companies that it had significant concerns that the merger would make Comcast an unavoidable gatekeeper for Internet-based services that rely on a broadband connection to reach consumers.

"The companies' decision to abandon this deal is the best outcome for American consumers," said Attorney General Eric Holder.  "The Antitrust Division of the United States Department of Justice has demonstrated, time and again, that it can and will defend the interests of the American consumer no matter the complexity of the issue or the size of the opponent.  This is a victory not only for the Department of Justice, but also for providers of content and streaming services who work to bring innovative products to consumers across America and around the world.  I commend the Antitrust attorneys and investigators whose outstanding work led to this outcome, and I know that the Department of Justice will continue to fight for fair access and free competition in every industry and every market."

“I want to thank our colleagues at the Federal Communications Commission for their close and productive cooperation throughout this investigation,” said Renata Hesse, Acting Assistant Attorney General of the Department of Justice’s Antitrust Division.  “The collective expertise of the career staff at both agencies enabled us to analyze the complex issues presented by this transaction and to deliver a consistent message regarding the impact of the transaction on competition and the broader public interest.  We are also grateful for the close cooperation we had with teams from many State Attorneys General offices during the course of our investigation.”

Comcast is a Pennsylvania corporation headquartered in Philadelphia.  With approximately 21.7 million video subscribers and 20.7 million broadband subscribers, Comcast is both the largest video and wired broadband Internet-access provider in the nation.

Time Warner Cable is a New York corporation with headquarters in New York.  With approximately 11.4 million video subscribers and 11.6 million broadband subscribers, Time Warner Cable is the fourth-largest video and the third-largest wired broadband Internet-access provider in the nation. 

The United States has filed a complaint in the U.S. District Court for the District of Columbia against Quicken Loans Inc. under the False Claims Act for improperly originating and underwriting mortgages insured by the Federal Housing Administration (FHA), the Justice Department announced today.  Quicken is a mortgage lender headquartered in Detroit.

“Those who do business with the United States must act in good faith, including lenders that participate in the FHA mortgage insurance program,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “To protect the housing market and the FHA fund, we will continue to hold responsible lenders that knowingly violate the rules.”

Quicken participated in the FHA insurance program as a direct endorsement lender (DEL).  As a DEL, Quicken had the authority to originate, underwrite and certify mortgages for FHA insurance.  If a DEL such as Quicken approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to the U.S. Department of Housing and Urban Development (HUD), FHA’s parent agency, for the losses resulting from the defaulted loan.  Under the DEL program, neither the FHA nor HUD reviews the underwriting of a loan before it is endorsed for FHA insurance.  HUD therefore relies on DELs to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance. And, to that end, a DEL must certify that every loan endorsed for FHA insurance is underwritten according to the applicable FHA standards.

The government’s complaint alleges that, from September 2007 through December 2011, Quicken knowingly submitted, or caused the submission of, claims for hundreds of improperly underwritten FHA-insured loans. The complaint further alleges that Quicken instituted and encouraged an underwriting process that led to employees disregarding FHA rules and falsely certifying compliance with underwriting requirements in order to reap the profits from FHA-insured mortgages.  For example, Quicken allegedly had a “value appeal” process where, when Quicken received an appraised value for a home that was too low to approve a loan, Quicken often requested a specific inflated value from the appraiser with no justification for the increase– even though such a practice was prohibited by the applicable FHA requirements.  Quicken also allegedly granted “management exceptions” whereby managers would allow underwriters to break an FHA rule in order to approve a loan.

The government’s complaint alleges that Quicken’s senior management was aware of these and other problems.  The complaint alleges that Quicken’s Divisional Vice President for Underwriting, the second most senior executive in Quicken’s Operations Department, wrote in an email discussing the value appeal process that “I don’t think the media and any other mortgage company (FNMA, FHA, FMLC) would like the fact we have a team who is responsible to push back on appraisers questioning their appraised values.”  In another email, the same Divisional Vice President for Underwriting wrote to a group of Quicken executives stating that 40 percent of the management exceptions on FHA’s early payment defaults should not have been granted, adding: “we make some really dumb decisions when it comes to client service exceptions.  Example, purchase loan we pulled new credit and the client stopped paying on almost everything and the scores fell by 100 points, we [still] closed it.”  In yet another email discussing an FHA loan, the Operations Director, a senior level executive, explained that the loan was approved based on “bastard income,” which he described as “trying to put some kind of income together that is plausible to the investor even though we know its creation comes from something evil and horrible.”

The government’s complaint alleges that as a result of Quicken’s knowingly deficient mortgage underwriting practices, HUD has already paid millions of dollars of insurance claims on loans improperly underwritten by Quicken, and that there are many additional loans improperly underwritten by Quicken that have become at least 60 days delinquent that could result in further insurance claims on HUD.  For example, the government’s complaint identifies a borrower whose bank account statement showed overdrafts in multiple months and during the loan application process requested a refund of the $400 mortgage application fee so that the borrower would be able to feed the borrower's family.  Nevertheless, Quicken allegedly approved the loan.  The borrower made only five payments before becoming delinquent and as a result, HUD ultimately paid an FHA insurance claim of $93,955.19.  In another example, the complaint identifies a loan where the borrower was cashing out equity through a cash-out refinance.  Allegedly, Quicken originally received an appraised value of $180,000, but because the borrower wanted to receive more cash, Quicken requested the appraiser to inflate the value by $5,000.  The appraiser allegedly provided Quicken’s requested value of $185,000 even though the only difference between the two appraisals was the appraised value – the comparable sales analysis, and even the date of the appraiser’s signature, remained the same.  Quicken allegedly used the inflated appraisal value to approve the loan.  The borrower was delinquent on his first payment and as a result, HUD ultimately paid an FHA insurance claim of $204,208. 

The complaint further alleges that Quicken failed to implement an adequate quality control program to identify deficient loans, and that Quicken failed to report to HUD the loans it did identify.  In particular, according to the government's complaint, despite its obligation to report to HUD all materially deficient loans, during the period from September 2007 to December 2011, Quicken concealed its deficient underwriting practices and failed to report a single underwriting deficiency to the agency. 

“As the complaint alleges, Quicken violated HUD’s quality standards when obtaining HUD insurance for mortgage loans,” said U.S. Attorney John Walsh of the District of Colorado, whose office helped to lead the investigation.  “Quicken issued hundreds of defective mortgage loans, and left HUD – and the taxpayer – to pay for the loans that defaulted.  Quicken’s alleged fraudulent conduct affected communities nationwide.  This case is the latest step in our commitment to hold accountable mortgage lenders who profit by taking advantage of HUD insurance and issuing defective loans that do not meet HUD’s standards.”

“Quicken needs to be held accountable for violations of HUD requirements in the origination of FHA loans, as alleged in the complaint,” said HUD General Counsel Helen R. Kanovsky.  “HUD will continue to take action to protect the FHA and American homebuyers.”

“The complaint alleges that Quicken approved loans that should not have been approved and submitted them for FHA insurance,” said HUD Inspector General David A. Montoya.  “The alleged cost to the FHA insurance fund was millions of dollars and hopefully this serves as reinforcement to Quicken that doing the wrong thing really never is worth it.”

The investigation of this matter was a coordinated effort among HUD-Office of Inspector General, HUD, the U.S. Attorney’s Office of the District of Colorado and the Civil Division’s Commercial Litigation Branch.

The action is captioned United States v. Quicken Loans, Inc. (D.D.C.).  The claims asserted in the complaint are allegations only and there has been no determination of liability. 

Two Northern California real estate investors have agreed to plead guilty for their role in bid rigging and fraud conspiracies at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Felony charges were filed today in U.S. District Court of the Northern District of California in Oakland against real estate investors Mark Roemer and Bradley Roemer.  To date, 54 individuals have pleaded guilty or agreed to plead guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California.  In addition, 20 other real estate investors have been charged in five multi-count indictments for their roles in bid rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Mateo and San Francisco counties. 

“Cynical investors who rig real estate foreclosure auctions will be held accountable for their crimes,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division.  “Winning auctions through fraud injures consumers and mortgage lenders by circumventing the competitive process that the antitrust laws are intended to protect.”

According to court documents, beginning as early as December 2009 and continuing until about November 2010, the defendants conspired with others not to bid against one another, and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County.  Both defendants were also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have otherwise gone to mortgage holders and other beneficiaries by holding second, private auctions open only to members of the conspiracy.  Selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.  The private auctions often took place at or near the courthouse steps where the public auctions were held.

“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office.  “The FBI is committed to working these important cases and remains unwavering in our dedication to bringing the members of these illegal conspiracies to justice.”                                                                                                               

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million.  A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine.  The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.

Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties in California.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

Roemer, Mark - Information

Roemer, Bradley - Information

**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**

Attorney General Eric Holder released the following statement on the Senate confirmation of Loretta Lynch:

“Loretta Lynch is a gifted attorney, a consummate professional, and a dedicated public servant.  I am pleased that the United States Senate has recognized her clear qualifications and the need for her confirmation as Attorney General of the United States.

“At every stage of her career, Loretta has earned the trust and high regard of allies and adversaries alike, both in Washington and throughout the country.  She is respected by law enforcement officers, civil rights leaders, and criminal justice officials of all political stripes.  In every case and every circumstance, she has demonstrated an unfailing commitment to the rule of law and a steadfast fidelity to the pursuit to justice.  

“I have known and worked closely with Loretta for many years, and I know that she will continue the vital work that this Administration has set in motion and leave her own innovative mark on the Department in which we have both been privileged to serve.  I am confident that Loretta will be an outstanding Attorney General, a dedicated guardian of the Constitution, and a devoted champion of all those whom the law protects and empowers.  I congratulate her on her confirmation, and I look forward to all that the Department of Justice will do and achieve under her exemplary leadership

Mohamad Saeed Kodaimati (Saeed), 24, of San Diego, was arrested and charged in a federal criminal complaint with two counts of making false statements involving international terrorism matters, announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Laura E. Duffy of the Southern District of California and Special Agent in Charge Eric S. Birnbaum of the FBI’s San Diego Field Office.

​A criminal complaint was filed today in the U.S. District Court of the Southern District of California, charging Saeed with two counts of providing false statements involving international terrorism.  In summary, the criminal complaint alleges that during interviews with agents from the FBI and the Department of State’s Diplomatic Security Service (DSS), that occurred in March 2015 at the U.S. Embassy in Ankara, Turkey, Saeed made material false statements about his recent activities and associations in Syria.

According to the complaint, Saeed falsely claimed that he had never been involved in any fighting, that he had never fired his weapon at anyone, that he did not know anyone who was a member of ISIL, that he had never told anyone else that he was involved with Al-Nusrah and that he had never worked or volunteered at a Sharia court.  Evidence gathered during the investigation contradicts these and other statements Saeed made to the interviewing agents. 

According to the criminal complaint, Saeed was born in Syria and became a naturalized U.S. citizen in September 2008.  In December 2012, Saeed travelled from San Diego to Istanbul and was in Syria and Turkey until his return to the United States.

In March 2015, Saeed returned to the United States and was interviewed by U.S. Customs and Border Protection agents and the FBI.  Saeed was arrested by FBI agents and members of the San Diego Joint Terrorism Task Force (JTTF) in Rancho Bernardo, California, without incident on April 22, 2015.  Saeed is scheduled to make his initial appearance before U.S. Magistrate Judge Karen Crawford of the Southern District of California at 2 p.m. PDT on Thursday, April 23, 2015.  The charges in this matter are the result of an investigation conducted by the FBI’s San Diego JTTF, with assistance provided by the FBI’s JTTF in Charlotte, North Carolina.

An arrest itself is not evidence that the defendant committed crimes charged.  The defendant is presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.

Kodaimati Criminal Complaint