District Not Recorded

A federal grand jury in West Palm Beach, Florida, returned a two-count indictment charging Palm Beach County Sheriff’s Deputy William D. Wheeler, 46, with unlawfully assaulting a man at the Palm Beach County Detention Center on Oct. 9, 2013, and filing a false report on the incident, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI.

According to the allegations contained in court documents, on or about Oct. 9, 2013, Wheeler was employed as a Palm Beach County Sheriff’s Office Deputy and was assigned to the Corrections Division (PBSO) West Detention Center located in Belle Glade, Florida.  As part of his duties, the complaint alleges that Wheeler escorted an inmate, J.S., to the medical area of the facility where he was seated in a chair with his hands restrained behind his back with handcuffs.  The complaint alleges that J.S. did not comply with the treating nurse’s attempt to review his medical bracelet.  The complaint further alleges that as the defendant lifted the inmate’s arm to read the medical bracelet, the inmate pulled his arm away.  The complaint alleges that Wheeler then placed his hands around the inmate’s neck, struck the inmate’s head against the wall and pulled the inmate to the floor.  The complaint further alleges that the defendant then struck the inmate in the face with his knee.  The inmate sustained facial injuries as a result of the incident, which was allegedly captured on a video recording.  

According to the complaint, the defendant prepared an incident report regarding the use of force.  The complaint further alleges that the defendant was later questioned regarding the incident and claimed to have been physically assaulted by the inmate.  The complaint alleges that the defendant’s version of the events is not corroborated by the video footage.

If convicted, Wheeler faces a maximum punishment of 30 years in prison.  An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.

This case commends the investigative efforts of the West Palm Beach Resident Agency of the FBI, Ric Bradshaw of the Palm Beach County Sheriff’s Office and State Attorney Dave Aronberg of the Palm Beach County State Attorney’s Office.  It is being prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Susan Osborne of the Southern District of Florida.

The United States has filed a complaint seeking to bar a retired Chicago firefighter from preparing federal tax returns for others, the Justice Department announced today.

The civil complaint against Irving Brown Sr., which was filed in the U.S. District Court for the Northern District of Illinois, alleges that Brown has prepared federal income tax returns for firefighters and other Chicago-area taxpayers which understate the customers’ correct tax liabilities in order to minimize the taxes they owe and maximize tax refunds. The suit alleges that Brown operates Irving Brown Sr. Tax Services out of his Chicago home.

The government alleges that Brown obtains inflated tax refunds for his customers through the use of fraudulent earned income tax credits, false charitable deductions and fake business expenses on a Schedule C (Profit or Loss From Business).  The suit alleges that the customers own no business or, if they do, the business-related expenses are false.  The Internal Revenue Service (IRS) interviewed several of Brown’s customers, who stated that the improper deductions, credits and Schedule C business expenses and income were false and not based on information they provided to Brown, according to the suit.

According to the complaint, Brown also frequently prepares returns claiming head of household filing status for customers who are ineligible for that status.  For other customers, the complaint alleges that Brown created false Schedule E (Supplemental Income and Loss) expenses from fictitious rental real estate to create tax deductions.  Among other things, a Schedule E is used to report income or loss from rental real estate property.  The complaint alleges that, in some instances, Brown prepared false invoices and receipts in order to substantiate the false expenses for customers who were being examined by the IRS. 

The lawsuit states that the IRS estimates Brown has prepared more than 2,000 tax returns since 2011.  The IRS has completed examinations of 94 of those returns, and the total tax deficiency for those returns alone exceeds $740,000, according to the complaint.  Based on the number of returns the defendant prepared, the complaint alleges that Brown’s actions could have cost the U.S. Treasury more than $1 million.

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

A former Drug Enforcement Administration (DEA) employee pleaded guilty today to defrauding the government out of more than $113,000 using fraudulently issued government credit cards, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Michael P. Tompkins of the Justice Department’s Office of the Inspector General in Washington, D.C. 

Keenya Meshell Banks, 42, of Upper Marlboro, Maryland, pleaded guilty today before U.S. District Judge Deborah K. Chasanow of the District of Maryland to one count of wire fraud.  A sentencing hearing is scheduled for June 29, 2015.  

According to her plea agreement, Banks was employed by the DEA as a Program Manager, and was responsible for the approval and issuance of government credit cards to DEA employees.  While serving in that role, Banks admitted that she submitted dozens of fake credit card applications to JPMorgan Chase & Co. for fictitious DEA employees, using names and identifying information of individuals who did not work at the DEA.  In at least one instance, however, Banks submitted the identifying information of an actual DEA employee.  Through this scheme, Banks obtained at least 32 fraudulent credit cards, which she then used to withdraw more than $113,000 from ATMs in Maryland and Northern Virginia.  As part of her plea agreement, Banks agreed to forfeit the proceeds she received as a result of the scheme and to pay full restitution. 

The case is being investigated by the Department of Justice Office of Inspector General and is being prosecuted by Trial Attorneys Richard B. Evans and Justin Weitz of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Thomas P. Windom of the  District of Maryland.

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La agencia EOIR anuncia que habrá un cambio de jueces para las audiencias de inmigración en Dilley

FALLS CHURCH, VA – La Oficina Ejecutiva de Revisión de Casos de Inmigración (EOIR), ha anunciado en el día de hoy que las audiencias de inmigración localizadas en Dilley, se reasignarán al tribunal de inmigración en Miami, reemplazando al tribunal de inmigración en Denver, que ha estado tratando estos casos.  Esto se debe a un informe por El Servicio de Inmigración y Control de Aduanas (ICE), una agencia del Departamento de Seguridad Nacional (DHS), con relación a la expansión del centro residencial y de detención en Dilley, Texas, que ahora tiene cupo para 2,400 camas.
 
Así como han estado haciendo los jueces de inmigración del tribunal de inmigración en Denver, los jueces de inmigración en Miami que se han asignados a los casos en Dilley, tratarán los casos por medio de videoconferencia (VTC).  Los jueces de inmigración en Miami tratarán todos los procesos de expulsión de Dilley, excepto aquellos procesos en los que un juez de inmigración de Denver ya esté considerando las evidencias, o un caso donde los asuntos legales ya se estén disputando.  También, a partir del 1º de mayo de 2015, los jueces de inmigración de Miami repasarán los casos de temor creíble (Credible Fear) referidos por DHS a EOIR.  Por otro lado, los casos referidos por DHS antes del 1º de mayo de 2015, así como las audiencias ya iniciadas con los jueces de inmigración en Denver, o con asuntos legales que ya se estén disputando, continuarán asignados a los jueces del tribunal de inmigración en Denver.  De todas formas, todas las partes recibirán notificación debida antes de cualquier audiencia.  Ahora bien, se está pidiendo por favor, que toda presentación de documentos se someta al tribunal de inmigración en Miami, a menos que un juez de inmigración en Denver ya esté tratando el caso.

De acuerdo a Juan P. Osuna, el director de la EOIR: “Después de haberse hecho una evaluación de la lista de los casos pendientes, como consecuencia de la decisión del Departamento de Seguridad Nacional de expandir el centro en Dilley, la EOIR ha determinado que el tribunal de inmigración en Miami puede hacerle frente al aumento de casos de inmigración de una forma más eficiente”.

Los jueces de inmigración en Miami que tratarán los casos de Dilley, estarán reprogramando los casos no prioritarios, y aquellos donde los comparecientes no estén detenidos, para así poder tratar los casos prioritarios.

 

- EOIR -

FALLS CHURCH, Va. - The Executive Office for Immigration Review (EOIR) today announced that, following the Department of Homeland Security (DHS), Immigration and Customs Enforcement’s announcement of the Dilley, Texas, residential detention facility expansion to 2,400 beds, EOIR will reassign immigration cases originating at the Dilley hearing location from the Denver Immigration Court to the Miami Immigration Court.

As the Denver Immigration Court immigration judges do, the Miami immigration judges assigned to Dilley cases will hear those cases via video-teleconference (VTC). Miami immigration judges will hear all Dilley removal cases except those in which a Denver immigration judge has already begun to hear evidence on contested issues. Miami immigration judges will also conduct credible fear reviews in cases that DHS refers to EOIR on or after May 1, 2015. Credible fear reviews that DHS refers before May 1, 2015, and all cases in which a Denver immigration judge has begun to hear evidence on contested issues will remain before the Denver immigration judge. All parties will receive appropriate notice prior to their hearings. Please note that filings for Dilley cases should be submitted to the Miami Immigration Court location unless the Denver immigration judge retains the case.

"Following an evaluation of the available docket space, EOIR determined that the increase in immigration court cases due to the Department of Homeland Security’s decision to expand the Dilley facility will be most efficiently handled from the Miami Immigration Court," said EOIR Director Juan P. Osuna.

The immigration judges in Miami who will hear the cases from Dilley are rescheduling the non-detained, non-priority cases that are scheduled for docket time needed to hear the priority cases.

 

- EOIR -

The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR's immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR's Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.

The U.S. Department of Justice’s Office of Community Oriented Policing Services (COPS Office) today announced the start of the Collaborative Reform Initiative for Technical Assistance (CRI-TA) with the Calexico Police Department in California.

“The COPS Office will conduct a thorough, independent assessment of the Calexico Police Department’s policies, practices and responsiveness to the community to ensure that they are taking into account national standards and community expectations,” said COPS Office Director Ronald Davis.  “Through this process, the Justice Department is committed to identifying organizational deficiencies, recommending best practices and providing technical assistance to help strengthen the Calexico Police Department.”  

The COPS Office’s CRI-TA is an independent and objective way to transform a law enforcement agency through an analysis of policies, practices, training, tactics and accountability methods around key issues facing law enforcement today.  The initiative is designed to provide technical assistance to agencies facing significant law enforcement-related issues.  Using subject matter experts, interviews and direct observations, as well as conducting extensive research and analysis, the COPS Office assists law enforcement agencies in enhancing and improving their policies and procedures, operating systems and professional culture.

The COPS Office is currently providing CRI-TA in Spokane, Washington; Philadelphia; St. Louis; Baltimore; Salinas, California; and Fayetteville, North Carolina, and has completed the process in Las Vegas.

The COPS Office, headed by Director Ronald Davis, is a federal agency responsible for advancing community policing nationwide.  Since 1995, the COPS Office has awarded more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 126,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance.  For additional information about the COPS Office, please visit the office’s website.

Attorney General Eric Holder released the following statement on the 75th anniversary of the NAACP Legal Defense Fund:

“On behalf of the United States Department of Justice, I congratulate the NAACP Legal Defense and Educational Fund on 75 years of passionate legal advocacy and extensive educational outreach in its tireless pursuit of equality and justice throughout the nation.  Since 1940, the NAACP LDF has stood at the forefront of America’s struggle to ensure that equality under the law is protected by the law.  From the historic victory in Brown v. Board of Education, achieved under the leadership of legendary founder Thurgood Marshall, to the wide-ranging efforts of the visionaries who continue to build on Brown’s promise today, the NAACP LDF has made once-unimaginable progress in expanding democracy, drawing attention to persistent disparities, and securing the more just society that all Americans deserve.  As this vital organization celebrates 75 years of civil rights achievements, I look forward to all that it will accomplish in the days and years to come.”

The company owner, a top executive and their company, Quality Egg LLC, were sentenced today in federal district court in Sioux City, Iowa, the Department of Justice announced. 

Austin “Jack” DeCoster, 81, of Turner, Maine, who owned Quality Egg, was sentenced to serve three months in prison to be followed by one year of supervised release, and fined $100,000.  His son, Peter DeCoster, 51, of Clarion, Iowa, who was Quality Egg’s chief operating officer, was also sentenced to serve three months in prison to be followed by one year of supervised release, and fined $100,000.  Quality Egg was sentenced to pay a fine of $6.79 million and placed on probation for three years.  All three defendants were ordered to make restitution in the total amount of $83,008.19.  Quality Egg also agreed to forfeit $10,000 as part of its plea agreement with the government.  The defendants were sentenced by U.S. District Court Judge Mark W. Bennett in the Northern District of Iowa. 

On June 3, 2014, Quality Egg, an egg production company with operations in Wright County, Iowa, pleaded guilty to one count of bribery of a public official, one count of introducing a misbranded food into interstate commerce with intent to defraud and one count of introducing adulterated food into interstate commerce.  Jack and Peter DeCoster each pleaded guilty to one count of introducing adulterated food into interstate commerce.  In plea agreements, the company and the father and son admitted that the company’s shell eggs were adulterated in that they contained a poisonous and deleterious substance, Salmonella Enteriditis, which may have rendered the eggs injurious to health. 

During the spring and summer of 2010, adulterated eggs produced and distributed by Quality Egg were linked to approximately 1,939 reported consumer illnesses in multiple states—a nationwide outbreak of salmonellosis that led to the August 2010 recall of millions of eggs produced by the defendants. 

“The message this prosecution and sentence sends is a stern one to anyone tempted to place profits over people’s welfare,” said the U.S. Attorney Kevin W. Techau of the Northern District of Iowa.  “Corporate officials are on notice.  If you sell contaminated food you will be held responsible for your conduct.  Claims of ignorance or 'I delegated the responsibility to someone else’ will not shield them from criminal responsibility.”

“American consumers deserve to feel secure that the eggs they eat are safe and produced in sanitary conditions,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Department of Justice will pursue and prosecute those whose criminal conduct compromises the safety of our food supply.”

“Food manufacturers have a responsibility to produce and sell food that is safe for consumers to eat,” said Dr. Stephen Ostroff, U.S. Food and Drug Administration (FDA) Acting Commissioner.  “Eggs are commonly consumed nationwide, both on their own and as ingredients in other foods.  When manufacturers fail to produce safe food, the FDA will take action to protect public health.”

As noted in the government’s memorandum regarding sentencing, Quality Egg personnel had, for years, disregarded food safety standards and practices and misled major customers, including Walmart, about the company’s food safety practices.  In the memorandum filed with the court, the government noted that since 2006, the company had commissioned tests to detect Salmonella Enteriditis in its layer barns and in the organs of its layer hens, that the results came back positive on 47 percent of the days tested, and that the frequency of positive test results grew in the months leading up to the August 2010 recall.  As part of the memorandum, the government also argued that the evidence indicated that Quality Egg personnel took steps to conceal from regulators and customers the company’s failures to follow food safety standards and practices, that Quality Egg created food safety plans that included inaccurate claims about the company’s biosecurity and pest control practices, and that Quality Egg falsified documents for the food safety audits required by various customers. 

Quality Egg pleaded guilty to bribing an inspector of the U.S. Department of Agriculture (USDA) to release eggs that had been retained for quality issues.  Quality Egg acknowledged that, on at least two occasions in 2010, its employees gave a cash bribe to a USDA inspector.  The USDA inspector’s job responsibilities included inspecting shell eggs at one or more of Quality Egg’s production facilities in Iowa.  Quality Egg admitted that its employees provided the bribe to the USDA inspector (now deceased) in an attempt to corruptly influence the inspector to exercise his authority to release pallets of retained eggs for sale without re-processing the eggs as required by law and USDA standards.  The eggs had been retained or “red tagged” for failing to meet minimum USDA quality grade standards.  Former Quality Egg employee Tony Wasmund, 64, of Willmar, Minnesota, pleaded guilty in September 2012 to one count of conspiracy to bribe a public official, sell restricted eggs with intent to defraud and introduce misbranded food into interstate commerce with intent to defraud and mislead.  Wasmund is scheduled to be sentenced by U.S. District Court Judge W. Bennett on May 15 at 8:30 a.m.

Quality Egg also pleaded guilty to introducing misbranded eggs into interstate commerce with the intent to defraud.  As part of its plea agreement, Quality Egg admitted that, beginning no later than January 2006 and continuing through Aug. 12, 2010, its employees affixed labels to egg shipments that indicated false expiration dates with the intent to mislead state regulators and retail egg customers regarding the true age of the eggs.  Quality Egg acknowledged that there were a number of ways that the company mislabeled older eggs with newer processing and expiration dates prior to shipping the eggs to customers in California, Arizona and other states.  Sometimes Quality Egg personnel did not put any processing or corresponding expiration dates on the eggs when they were processed.  The eggs would be kept in storage for several days or up to several weeks.  Then, just prior to shipping the eggs, Quality Egg personnel labeled the eggs with processing dates that were false in that the dates were more recent than the dates that the eggs had actually been processed and with corresponding false expiration dates. 

The case was prosecuted by Assistant U.S. Attorney Peter Deegan of the Northern District of Iowa and Trial Attorneys Lisa Hsiao and Christopher Parisi of the Civil Division’s Consumer Protection Branch.  They were assisted by Associate Chief Counsel Michael Varrone of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.  The case was investigated by FDA’s Office of Criminal Investigations, the USDA’s Office of Inspector General and the FBI.

Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.  The case file number is 14-CR-3024.

The U.S. has reached a settlement with Cal-Maine Foods, Inc., one of the nation’s largest egg producers, that resolves Clean Water Act violations at the company’s poultry egg production facility in Edwards, Mississippi, announced the Justice Department’s Environment and Natural Resources Division and the U.S. Environmental Protection Agency (EPA).  Under the settlement, Cal-Maine will bring the facility into compliance with its state-issued water discharge permit, significantly reduce nutrient pollution discharges and improve environmental data collection and reporting practices.  The company will also pay a $475,000 penalty to be split evenly between the U.S. and Mississippi.

“The Justice Department is committed to protecting clean water for all Americans and ensuring large concentrated animal feeding operations are good neighbors to those communities living near them like Edwards,” said Assistant Attorney General John Cruden for the Justice Department’s Environment and Natural Resources Division. “This settlement will bring Cal-Maine into compliance with state and federal laws and cut nutrient pollution discharges into area waterways.”

“Clean Water Act violations from agricultural facilities can impair drinking water sources, transmit disease-causing bacteria and endanger our lakes and rivers,” said Assistant Administrator Cynthia Giles of EPA’s Office of Enforcement and Compliance Assurance.  “When concentrated animal feeding operations discharge pollutants into U.S. waters, the law requires them to have a permit and comply with it.  We’re committed to enforcing the law to protect water quality for communities like the one where this facility is located.”

“This is good news for water quality and health for the residents of Edwards by requiring that Cal-Maine's facilities operate in accordance with state and federal laws,” said U.S. Attorney Gregory K. Davis for the Southern District of Mississippi. “The settlement also represents the commitment by the Justice Department and our federal and state partners to protect water, air and land from health hazards and pollution.”

Today’s settlement, a consent decree filed in federal court in the Southern District of Mississippi, resolves alleged violations of Cal-Maine’s Clean Water Act National Pollutant Discharge Elimination System (NPDES) permit at its facility in Edwards, Mississippi, a large concentrated animal feeding operation that houses more than 2 million chickens.  Cal-Maine discharged pollutants from the production area into a tributary of a nearby creek without NPDES permit authorization and applied nitrogen-laden wastewater on fields at the facility during winter months when land application was prohibited and sometimes at rates that exceeded their permit requirements.  Cal-Maine also committed hundreds of water sampling, recordkeeping and reporting violations.

The facility is located in a community where close to half of the households have an annual income of less than $25,000.  One of EPA's top priorities is to protect communities that are disproportionately affected by pollution.  

Too much nitrogen and phosphorus in the water causes algae to grow faster than ecosystems can handle.  Large growths of algae, known as algal blooms, contribute to the creation of hypoxia or “dead zones” in water bodies where oxygen levels are so low that most aquatic life cannot survive.  Excessive nitrogen and phosphorus that washes into water bodies and is released into the air are often the direct result of human activities and agricultural operations are one of the major sources of nutrient pollution.

Under the settlement, Cal-Maine is already developing and implementing procedures for its egg production and land application areas to achieve compliance with its NPDES permit, an employee training policy and improved recordkeeping and reporting practices.  The procedures were submitted to and reviewed and approved by EPA and Mississippi officials over the course of settlement negotiations.  Cal-Maine has begun implementing these procedures and must comply with all the terms of the settlement by April 30, 2016.

Once the pollution controls required by the settlement are implemented, EPA estimates Cal-Maine will cut discharges of nitrogen by 89,000 pounds and phosphorous by 20,000 pounds per year.  EPA estimates it will cost Cal-Maine approximately $418,000 to implement the settlement requirements and bring the Edwards, Mississippi, facility into compliance with state and federal clean water laws.

Cal-Maine Foods Inc. and Cal-Maine Farms Inc. merged into one corporate entity called Cal-Maine Foods Inc., effective January 1, 2015.

This case is part of EPA’s National Enforcement Initiative to prevent animal waste from contaminating surface and ground water.  For more information on that initiative, visit http://www2.epa.gov/enforcement/national-enforcement-initiative-preventing-animal-waste-contaminating-surface-and-ground.

The proposed consent decree is subject to a 30-day public comment period. A copy of the consent decree is available at http://www.justice.gov/enrd/Consent_Decrees.html.

With the annual tax filing deadline approaching on Wednesday, April 15, the Justice Department’s Tax Division reminds U.S. taxpayers across the country and around the world of their obligation to file timely and accurate income tax returns. 

“As U.S. taxpayers, we enjoy many benefits, including the security provided by our U.S. military, the ability to travel on public roads and highways, and the beauty and enjoyment of national parks and monuments,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Tax Division.  “Those individuals who choose to accept these benefits and yet turn a blind eye to their federal tax obligations by failing to file required returns, filing false and fraudulent returns, and evading the assessment and payment of tax due will be pursued for their criminal conduct.  No one is above the law or below the radar.”

The Justice Department works with the Internal Revenue Service (IRS) and other law enforcement partners to enforce the nation’s tax laws fully, fairly and consistently through both criminal and civil litigation.  During the past year, the Tax Division’s prosecutions have included:

• April 2015 – Daniel Porter, a Chino, California, businessman, was sentenced by a federal court in Las Vegas to serve 55 months in prison for conspiring to defraud the United States by promoting and selling fraudulent tax products, including a product called Tax Break 2000.  The intended tax loss of the scheme was more than $60 million.  Porter designed and sold Tax Break 2000 directly and through other individuals and entities, including NADN, a company in Las Vegas.  Alan Rodrigues, NADN’s former general manager and executive vice president, Weston Coolidge, the former president of NADN, and Joseph Prokop, a former NFL punter, were convicted at trial in a separate criminal case.  In March 2015, Rodrigues was sentenced to serve 72 months in prison, Coolidge was sentenced to serve 70 months in prison and Prokop was sentenced to serve 18 months in prison to be followed by 30 months home confinement. 

• < > 2015 – Arkan Summa, an owner of Happy’s Pizza franchises, was sentenced by a federal court in the Eastern District of Michigan to serve 18 months in prison and ordered to pay $199,847 in restitution for his role in a wide ranging conspiracy to defraud the IRS.  The conspiracy involved diverting more than $6.1 million in gross receipts, underreporting wages and understating income and expenses of the pizza franchises.  The total tax loss resulting from the scheme was more than $6.2 million.  The founder of Happy’s Pizza, Happy Asker, was previously convicted at trial, and three others have also pleaded guilty to related charges.

  March 2015 – Jon McBride, owner of a cell phone clip company and a real estate investor in Utah, was sentenced by a federal court in Utah to serve 27 months in prison and ordered to pay $174,684 in restitution following his conviction for filing a false return and tax evasion.  McBride filed a false tax return for 2005 that failed to report his gross income.  He later filed a false amended return for the same year and again failed to report his gross income.  McBride created several nominees to conceal his income and ownership in real properties to evade the payment of his taxes for 1999 through 2002, tried to evade the assessment of his 2006, 2007, and 2009 taxes, filed false 2006 and 2009 returns, and failed to file a return for 2007.

• March 2015 – Paul DiLorenzo, a doctor from Ocean Township, New Jersey, was sentenced by a federal court in New Jersey to serve 46 months in prison and ordered to pay $304,293 in restitution for structuring cash transactions to avoid reporting requirements and for aiding and assisting in the filing of his own false tax returns.  The court also ordered DiLorenzo to forfeit nearly $1 million in illegally derived proceeds.

• March 2015 – Yvette Johnson was sentenced by a federal court in Maryland to serve two years in prison for tax evasion.  Her husband, Shannon Johnson, was previously sentenced to serve 72 months in prison for his role in the tax evasion and conspiracy to commit mail and wire fraud.  Shannon Johnson held himself out as a wealthy international investment banker offering financing to businesses and investors, who wired and mailed advance banking fees to multiple bank accounts in different states controlled by the Johnsons.  Shannon Johnson received millions in fees and payments, but never provided the promised financing.  Yvette and Shannon Johnson filed false claims for refunds for the 1998 through 2001 tax years based on fictitious Forms W-2, and further evaded their taxes for the 2002 through 2006 tax years.  The court also ordered Shannon Johnson to forfeit $3.7 million based on fraud committed against investors.

• February 2015 – Kenneth and Kimberly Horner, who owned and operated Topcat Towing and Recovery Inc., were each convicted by a federal court in Georgia of filing false personal and corporate tax returns.  According to the charges and information presented in court, between 2005 and 2008, the Horners skimmed more than $1.5 million in cash receipts from their towing business and deposited that money into their personal bank account without disclosing the income to their tax return preparer or on corporate and personal tax returns filed with the IRS.  They owe approximately $400,000 in taxes to the IRS for their unreported income.

• February 2015 – Thair Alwan, the owner of a pizza shop, was sentenced by a federal court in North Carolina to serve 12 months and one day in prison and ordered to pay $237,587 in restitution and a $10,000 fine for filing a false tax return for 2008.  According to court filings, Alwan skimmed cash from pizza shops he owned, failed to report the cash on the corporate returns and under-reported his income on his personal income tax returns.

• February 2015 – Fidencio Moreno, owner of a charter bus company, was sentenced by a federal court in California to serve 41 months in prison for conspiring to defraud the United States.  Arturo Moreno, also an owner of the company, was sentenced to serve 28 months in prison for conspiring to defraud the United States, and conspiring to commit wire fraud and mortgage fraud.  According to court filings, from 2005 until 2010, Fidencio and Arturo Moreno, along with their co-defendant Elena Moreno, conspired to file false and fraudulent corporate and personal income tax returns, on which they failed to report cash receipts from the charter bus company.  The defendants also submitted fraudulent loan applications to purchase or refinance real properties.  Elena Moreno was sentenced to serve 22 months in prison in January 2015.

• January 2015 – Matthew Libous, an attorney licensed to practice in New York, was convicted by a federal jury in New York of filing false tax returns for tax years 2007, 2008 and 2009.  According to court filings, Libous failed to report income from his law practice and tens of thousands of dollars in personal expenses that he caused to be paid by another company he operated.
• January 2015 – Michael Stover, a Michigan businessman, was sentenced by a federal court in Michigan to serve 42 months in prison for tax evasion and wire fraud.  From 2004 through 2010, Stover was president of a company from which he embezzled more than $2 million, and he failed to report the income on his tax returns.
• December 2014 – Jesus Pons, a computer-services manager for Miami-Dade County, was sentenced by a federal court in Florida to serve 51 months in prison and ordered to pay $556,254 in restitution for tax evasion.  According to court filings, from 2007 to 2011, Pons, who was in charge of managing information technology projects and county vendors, received illegal kickback payments in exchange for approving payments for consulting work that was never done and failed to report this income on his personal income tax returns.
• November 2014 – Joel Field, owner and operator of Cadillac Ranch restaurants and bars in Ohio and elsewhere, was sentenced by a federal court in Ohio to serve 12 months and one day in prison, to be followed by four months in a halfway house and four months of home confinement, and was ordered to pay $349,778 in restitution and a $4,000 fine for tax evasion.  According to court documents, Field filed his 1997 through 2001 tax returns but failed to pay the full tax due and owing.  While the IRS was attempting to collect his taxes, Field transferred assets into the names of nominees and submitted false IRS Forms 433-A (Collection Information Statements for Wage Earners and Self-Employed Individuals).
• October 2014 – Jeffrey Scott, owner and operator of Greenville Loop Seafood (GLS), a seafood distribution company, was sentenced by a federal court in North Carolina to serve 12 months and one day in prison and was ordered to pay $26,263 in restitution and a $25,000 fine for attempting to evade his 2007 taxes.  According to court filings, between 2006 and 2010, Scott paid nearly all of his living expenses with checks from GLS, including his mortgage, utilities, insurance premiums, landscaping, home improvements, school fees and a country club membership.  Scott also purchased five vehicles for more than $200,000, a $100,000 boat and a $2.1 million waterfront home.  Scott did not report these funds as income.  He also filed a false corporate tax return for 2011 claiming the painting of his personal residence, plumbing work at his personal residence and vet bills for his family dog as business expenses.
• October 2014 – Michael Mangold, a doctor specializing in emergency medicine and urgent care, was sentenced by a federal court in Wisconsin to serve 18 months in prison for tax evasion and making false statements.  According to court filings, Mangold earned income working for various hospitals, emergency rooms, urgent care facilities and state and county correctional facilities.  From 1997 through 2007, Mangold concealed his income by filing false tax returns and asserting frivolous legal arguments to the IRS.
• September 2014 – Nick Jodha, also known as Nick Persaud, an owner and operator of contracting company United HVAC Services Inc., was sentenced by a federal court in New York to serve 12 months and one day in prison and ordered to pay $214,529 in restitution for evading his 2007 through 2010 taxes.  According to court filings, Jodha cashed checks written to United HVAC at a check-cashing service rather than depositing them into the business bank account.  He failed to tell his accountant about these cashed checks, which were not reflected in the statements that the accountant used to prepare United HVAC’s corporate returns, or about the fact that he used a portion of the cashed checks to pay business and personal expenses.
• April 2014 – Amberula Levitt, who owned and operated Tax Time Tax Service, a tax-preparation business with multiple locations throughout Atlanta, was sentenced by a federal court in Georgia to serve 21 months in prison, ordered to pay $620,004 in restitution and ordered to complete 100 hours of community service for filing false tax returns for 2004 and 2005, assisting in filing a false tax return for 2006, and failing to file tax returns for 2007, 2008 and 2009.

Additional highlights from the U.S. Attorneys’ Offices include:

• April 2015 – William M. Weisberg, an attorney from Vienna, Virginia, was sentenced by a federal court in Virginia to serve 12 months and one day in prison and ordered to pay $451,955 in restitution for willful failure to pay tax due and owing.  According to court filings, Weisberg filed his income tax returns, but failed to pay his taxes for 2008 and 2010, and paid only a portion of his taxes for 2009.  During this time, Weisberg paid approximately $250,000 to rent a house in Vienna, $150,000 for private and parochial schools for his two children, $35,000 for maid service and $130,000 for travel and entertainment.  When the IRS tried to work with Weisberg in 2010 to obtain the money he owed, Weisberg falsified a document from his law firm, which told the IRS that the firm was withholding money from his paychecks to give to the IRS, when, in fact, no money was being withheld.
• March 2015 – Gwendolyn Muller, a receptionist previously employed by a medical office in Kearny, New Jersey, was sentenced by a federal court in New Jersey to serve 34 months in prison and ordered to pay $556,000 in restitution for embezzlement, using fraudulent credit cards to obtain goods and services and tax evasion.  According to court filings, from 2007 through 2011, Muller used her position at the medical practice to take cash and conceal more than $446,000 in checks paid by insurance companies to the medical practice for services to patients.  At various times during this same period, Muller also fraudulently obtained 10 credit cards in the name of a principal of the medical practice and used those cards to charge more than $218,000 in goods and services – a portion of which Muller paid for with embezzled funds.  Muller admitted to filing a false tax return to evade the payment of taxes on this illegally obtained income.
• February 2015 – Don F. Lindner, an attorney from Severna Park, Maryland, pleaded guilty to filing a false return and agreed to pay $341,730 in restitution.  According to court filings, Lindner practiced law in Glen Burnie, Maryland, and treated his law practice as a sole proprietorship.  For his tax returns for 2007 and 2011, Lindner omitted $1,230,614 in gross receipts from his law practice.  He also maintained a rental property and falsely reported on his tax returns that he paid more than $82,700 in repairs on the rental property during the same tax years, when in fact no repairs were done, thereby fraudulently decreasing his purported taxable income.
• February 2015 – Rebecca Hoff, a former office manager and accounts payable bookkeeper from Ironwood, Michigan, was sentenced by a federal court in Wisconsin to serve 15 months in prison for filing a false income tax return.  According to court filings, Hoff used company checks to pay her personal expenses, which included the purchase of a vehicle, home improvements and mortgage payments.  Although the employer did not pursue charges for the embezzlement, Hoff never declared the money she embezzled as income on her federal tax returns, resulting in a tax liability of more than $300,000.
• February 2015 – Joel Carlson, an investment advisor, was sentenced by a federal court in Minnesota to serve 42 months in prison for tax evasion.  Carlson deposited client investments and additional funds solicited from his father into a Trust Financial Group account, which he treated as his personal bank account.  Carlson spent the money on personal items and, when confronted, lied to his clients about the existence of their investments.  In addition to misappropriating assets, totaling more than $1.5 million, Carlson failed to file personal income tax returns for tax years 2010 and 2011.  Carlson will pay approximately $3.1 million total in restitution, which includes $1.2 million in restitution to the IRS.
• November 2014 – Dennis Weiss, formerly a suburban home builder, was sentenced by a federal court in Illinois to serve 30 months in prison and ordered to pay $296,643 in restitution to the IRS for filing a false federal income tax return and making false statements in a bankruptcy petition.  According to court documents, Weiss filed false individual federal income tax returns for 2005 through 2009 and failed to file corporate tax returns for both of his companies, Custom Homes by D.R. Weiss Inc. and Reliable Home Solutions Inc.  Between 2005 and 2009, Weiss paid personal expenses from a business bank account, accepted cash payments from customers of his businesses and failed to record the receipt of these funds on the books and records of the corporations, resulting in a total federal tax loss of $1,271,280.
• October 2014 – Patrick J. Belzner, also known as Patrick McCloskey, a home builder residing in Selbyville, Delaware, was sentenced by a federal court in Maryland to serve 15 years in prison and ordered to pay $19.8 million in restitution on charges of wire fraud conspiracy, wire fraud and tax evasion.  According to court filings, Belzner worked for the McCloskey Group, a real estate development business, and conspired with others to defraud investors through a fraudulent investment scheme.  Belzner admitted that investor funds were used to pay personal and business expenses, as well as to make partial repayments to earlier lenders and to pay fees to some of the victim investors to keep them from demanding the return of their money.  In addition, Belzner admitted to stealing more than $1 million from former employers and failing to report those sums on his federal tax returns. He further admitted evading the payment of the tax due and owing by placing his residences, other real estate and automobiles in the names of corporations that he formed, as well as by paying his personal expenses – including  his mortgage, ground rent for a vacation home, construction costs on a house that he built, car payments, Baltimore Ravens season tickets and private school tuition – from bank accounts he opened in the names of the corporations or from payments out of the real estate development business.  In 2006 and again in 2009, Belzner submitted forms to the IRS falsely claiming that he did not have sufficient income to make any payments on the assessed back taxes, penalties and interest.  By August 2013, the total assessed tax, interest and penalties due and owing by Belzner exceeded $2.6 million.

The Justice Department will continue to vigorously pursue and prosecute those engaged in tax crimes.  These efforts of the department, the IRS and its other law enforcement partners are critical to the continued integrity of our national tax system, and send a strong message to those individuals who make good faith efforts to comply with their tax obligations that we will hold accountable those who do not.

More information about the Tax Division’s civil and criminal enforcement efforts in these and other areas is available on the division’s website.

SINGAPORE – Ministers and senior police officials from around the world have gathered at the official opening of the INTERPOL Global Complex for Innovation (IGCI) which is set to empower law enforcement officers worldwide with cutting-edge tools and knowledge against 21st century crime.

With the IGCI marking the transition of global policing into the digital age, Singapore’s Deputy Prime Minister, Coordinating Minister for National Security and Minister for Home Affairs, Teo Chee Hean, addressed its opening ceremony after chairing a ministerial cybercrime meeting involving INTERPOL’s President Mireille Ballestrazzi and Secretary General Jürgen Stock.

Underlining the growing complexity of today’s safety and security threats, Deputy Prime Minister Teo said: “Police and law enforcement agencies in the region can access INTERPOL’s tools and programs through the IGCI, to train and equip their officers to combat new and emerging threats, thereby enhancing collective regional safety and security.”

“The IGCI can use Singapore’s location in the heart of Asia to reach out to the rest of the region and beyond. Through the IGCI, INTERPOL can also gain a better understanding of Asian perspectives and expertise, to shape its research and development and operational responses against transnational threats,” added Singapore’s Deputy Prime Minister.

The opening ceremony also included representatives from international organizations and strategic partner organizations from the private sector. These include Entrust Datacard, Kaspersky Lab, NEC, Safran Morpho and Trend Micro Ltd.

INTERPOL President Ballestrazzi said that collaboration with the public and private sectors would allow the IGCI to benefit from the culture, innovation and dynamic spirit of all those involved.

“Today’s inauguration of the IGCI marks the end of a process that has mobilized our member countries and partners in a joint effort to strengthen the abilities of INTERPOL and law-enforcement agencies as they face the realities of modern crime. It also marks our joint resolve to build a safer world,” said President Ballestrazzi.

Highlighting Singapore’s thriving spirit as it celebrates its 50th anniversary, INTERPOL Secretary General Jrgen Stock said that the IGCI was born out of the Organization’s commitment to adapt to changes in the threat landscape.

“By establishing the IGCI, INTERPOL will ensure that it is best placed to help police around the world address emerging threats through innovation and training. The work of the IGCI will provide operational and forensic support, build capacity and identify cyber threats,” said Mr. Stock.

In this respect, the audience heard that intelligence from a prominent IT actor had led to an IGCI-coordinated operation which dismantled the Simda botnet through a joint international effort by law enforcement and the private sector.

“These achievements highlight the value of the IGCI and how it will help police adopt new technology and practices to outsmart cybercriminals,” added Mr. Stock.

In addition to cybercrime and capacity building and training, the IGCI’s Command and Coordination Centre operations room represents its third central pillar. It recently coordinated its first border security initiative, Operation Sunbird, leading to the arrest of international fugitives attempting to travel across ASEAN countries.

The IGCI inauguration begins a week of INTERPOL events in Singapore, including the INTERPOL World 2015 exhibition and the 22nd INTERPOL Asian Regional Conference.

Defendant Worked on Unsuccessful Campaign of Washington, D.C., Council Candidate

A 33-year-old Washington, D.C., man was sentenced today to serve 16 months in prison for evading income taxes and violating campaign finance laws while working as the treasurer and custodian of records for a District of Columbia political campaign.

The sentence was announced by Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, Chief Cathy L. Lanier of the Metropolitan Police Department and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Washington, D.C., Field Office.

Hakim J. Sutton pleaded guilty on Oct. 23, 2014, in the U.S. District Court for the District of Columbia to one count of income tax evasion, a federal offense, and one count of knowingly filing a false and misleading campaign finance report, a violation of District of Columbia law.  He was sentenced by the Honorable U.S. District Judge Richard J. Leon.  Under the plea agreement, Sutton is required to pay full restitution of $18,231 in taxes and interest to the IRS.  Sutton was also ordered to three years of supervised release following his 16 month prison sentence.

According to a statement of offense, signed by the defendant as well as the government, Sutton was the principal owner of the Sutton Group, which performed political consulting services in the District of Columbia and elsewhere.  In 2011 and 2012, Sutton served as the treasurer and custodian of records for the campaign of Michael A. Brown, a candidate seeking re-election to an at-large seat on the Council of the District of Columbia.  Brown ultimately lost in the November 2012 election.

Between July 2011 and May 2012, Sutton diverted approximately $115,250 from the campaign bank account to himself by depositing the funds drawn from the campaign bank account into his own personal bank accounts, and converting funds drawn from the campaign bank account to cash.  All told, Sutton wrote 36 checks payable to himself.

According to the statement of offense, some, but not all, of the money that Sutton diverted was compensation for Sutton’s work on the campaign.  However, Sutton failed to file income tax returns for calendar years 2011 and 2012.  He owes a total of $17,180 in federal income taxes for those years, along with an additional $1,051 in interest.

Sutton also omitted references to the checks that he had written to himself in a series of six reports he filed in 2011 and 2012 with the District of Columbia Office of Campaign Finance.

Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Cohen commended the Metropolitan Police Department and the special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney David A. Last and former Assistant U.S. Attorney Bryan Seeley of the District of Columbia and Trial Attorney Kenneth C. Vert of the Tax Division, who prosecuted the case.  Ciraolo and Cohen thanked Assistant U.S. Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section, Legal Assistant Angela Lawrence, Paralegal Specialist Tasha Harris, former Paralegal Specialist Nicole Wattelet and Criminal Investigator John Marsh, all of the U.S. Attorney’s Office for the District of Columbia, for their assistance.

Two Colombian nationals were sentenced to decades in U.S. federal prison today for their roles in the kidnapping and murder of former Drug Enforcement Administration (DEA) Special Agent James “Terry” Watson in Bogotá, Colombia, on June 20, 2013. 

Attorney General Eric Holder, 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, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, DEA Administrator Michele M. Leonhart and Bill A. Miller, Director, U.S. State Department’s Diplomatic Security Service (DSS) made the announcement.

“With these sentencings, all seven defendants involved in the kidnapping and murder of Special Agent Terry Watson have been found, prosecuted, and brought to justice,” said Attorney General Holder.  “Special Agent Watson was a courageous patriot, a principled law enforcement agent, and a proud defender of the rule of law.  Our nation owes him and his loved ones a debt we can never repay.  And although our prosecution of his heinous attackers has come to its rightful close, the Department of Justice will never rest in our efforts to honor Special Agent Watson’s life of service and sacrifice by upholding the values that he served to protect.”

“DEA is grateful that the final two defendants connected to Terry Watson’s murder faced justice in a U.S. court of law for their heinous crime," said Administrator Leonhart.  “Terry will be remembered for his bravery, dedication and loyalty to our agency’s mission, and his presence is missed every day by the men and women of DEA.  Throughout this ordeal, the Watson family has remained in our thoughts and prayers, and we will never forget their sacrifice.”

Édgar Javier Bello Murillo, 28, and Omar Fabián Valdes Gualtero, 28, were sentenced today to 440 months in prison and 348 months in prison, respectively, by U.S. District Judge Gerald Bruce Lee of the Eastern District of Virginia.  Both pleaded guilty to second degree murder and conspiracy to kidnap an internationally protected person on Dec. 19, 2014. 

In the statements of facts filed with their plea agreements, Valdes Gualtero and Bello Murillo admitted that they conspired to conduct “paseo milionarios” or “millionaire’s rides” in which victims were lured into taxi cabs, kidnapped and then robbed.  Both admitted that, on the evening of June 20, 2013, they were a part of a six-person robbery crew that targeted Special Agent Watson.  One of the members of the crew picked up Special Agent Watson in his taxi, while another drove a second taxi carrying the assailants.  Bello Murillo admitted that he entered the taxi in which Special Agent Watson was riding and stabbed him multiple times.  Special Agent Watson was able to escape from the taxi, but he later collapsed and died from his injuries.

In total, seven defendants were arrested and extradited from Colombia to the United States to face charges in connection with Special Agent Watson’s murder and the subsequent attempt to cover up the crime.  Six defendants pleaded guilty for their respective roles in the kidnapping and murder: Julio Estiven Gracia Ramírez, 32; Héctor Leonardo López, 34; Andrés Álvaro Oviedo García, 22; Edwin Gerardo Figueroa Sepúlveda, 40; Valdes Gualtero; and Bello Murillo.  On Dec. 12, 2014, Gracia Ramírez was sentenced to 27 years in prison, López was sentenced to 25 years in prison and Oviedo García was sentenced to 20 years in prison.  On Feb. 18, 2015, Figueroa Sepúlveda was sentenced to 30 years in prison.  A seventh defendant, Wilson Daniel Peralta-Bocachica, 31, pleaded guilty to obstruction of justice for cleaning the taxi cab in which the attack occurred before turning it in to the Colombian National Police.  On Feb. 18, 2015, Peralta-Bocachica was sentenced to 40 months in prison.

This case was investigated by the FBI, DEA and DSS, in close cooperation with Colombian authorities and with assistance from INTERPOL and the Criminal Division’s Office of International Affairs.  The case is being prosecuted by Special Counsel Stacey Luck of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Michael P. Ben’Ary of the U.S. Attorney’s Office for the Eastern District of Virginia.

The Department of Justice gratefully acknowledges the Colombian Attorney General’s Office, Colombian National Police, Colombian Directorate of Criminal Investigation and Interpol (DIJIN), DIJIN Special Investigative Unit, Bogotá Metropolitan Police, Bogotá Police Intelligence Body (CIPOL) Unit and Colombian Technical Investigation Team for their extraordinary efforts, support and professionalism in responding to this incident.

A federal inmate at the U.S. Penitentiary in Hazelton, West Virginia, pleaded guilty and was sentenced to life in prison today for the murder of another inmate, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney William J. Ihlenfeld II of the Northern District of West Virginia.

Patrick Andrews, 34, formerly of Washington, D.C., pleaded guilty to one count of murder by a federal prisoner serving a life sentence and one count of second degree murder in a federal facility for his role in the Oct. 7, 2007, murder of fellow inmate Jesse Harris.  U.S. District Judge Irene M. Keeley of the Northern District of West Virginia sentenced Andrews to life in prison on both counts.

According to his plea agreement, Andrews and fellow inmate, Kevin Bellinger, stabbed Harris to death with homemade knives in an orchestrated attack.  According to evidence introduced during Bellinger’s June 2014 trial in this case, while a group of inmates were being moved from the recreation yard back to their cells, Andrews and Bellinger confronted Harris and repeatedly stabbed him.  In less than a minute, a correctional officer approached and the attackers fled.  Officers apprehended Andrews after reviewing surveillance footage, which showed Andrews and Bellinger engaged in a verbal confrontation with Harris, followed by the two attackers wielding weapons and assaulting Harris, who was unarmed and backing away from them.  Harris ultimately died from multiple stab wounds sustained during the attack.

At the time of the murder, Andrews was serving a sentence of 35 years to life in prison for two murders that took place in 1997 and 2000, and Bellinger was serving a sentence of 15 years to life for an assault with intent to kill that took place in 2000.

Bellinger was convicted in this case by a federal jury on June 16, 2014, of one count of murder by a federal prisoner serving a life sentence and one count of second degree murder in a federal facility.  On Oct. 8, 2014, he was sentenced to life in prison.

This case was investigated by the FBI and the U.S. Bureau of Prisons.  The case was prosecuted by Trial Attorney Richard Burns from the Criminal Division’s Capital Case Section and Assistant U.S. Attorney Andrew Cogar of the Northern District of West Virginia.

A Tarzana, California, man was sentenced today in U.S. District Court in Los Angeles to serve two years in prison on charges related to an odometer tampering scheme, the Department of Justice announced. 

Shamai Salpeter, 66, was sentenced by Chief Judge George H. King in the Central District of California to serve 24 months in prison followed by three years of supervised release.  He was also ordered to pay $421,666 in restitution to victims who purchased vehicles without knowing the odometer readings were incorrect. 

In November 2014, Salpeter pleaded guilty to one count of conspiracy and one count of tampering with an odometer.  Salpeter admitted that from July 2008 through January 2012, he used electronic odometer tampering tools to alter hundreds of odometers at his residence in Woodland Hills, California.  For a payment of $100 to $400, he reset the odometers to any mileage requested by his customers.  Frequently, his customers were trying to avoid penalties for exceeding the maximum mileage for their vehicle lease or to make their vehicle more valuable as a trade-in.  Many of the vehicles were subsequently sold to unsuspecting consumers who had no way to detect that the odometer readings were inaccurate.   

“Each time this defendant altered an odometer with an electronic odometer tampering tool, he violated federal law,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “We will continue to prosecute individuals engaged in odometer tampering to protect innocent purchasers from odometer fraud.”

Many of Salpeter’s customers were referred to him by Jeffrey Levy, a salesman at Galpin Ford in North Hills, California.  Levy also pleaded guilty to conspiracy to commit odometer fraud.  On March 16, Levy was sentenced to serve one year in prison and ordered to pay $115,818 in restitution. 

“Tampering with odometers is a crime that puts consumers’ lives and wallets at risk,” said Administrator Mark Rosekind of the U.S. Department of Transportation (DOT) National Highway Traffic Safety Administration (NHTSA).  “We will continue to work with our Department of Justice and state DOT partners to deter odometer fraud and inform consumers of the potential signs and dangers associated with this crime.”

This case is being prosecuted by Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch.  The case was investigated by the NHTSA’s Office of Odometer Fraud Investigation and California’s Department of Motor Vehicles Investigations Division. 

The NHTSA estimates that odometer fraud in the United States results in consumer losses of more than $1 billion annually and has established a special hotline to handle odometer fraud complaints.  Individuals who have information relating to odometer tampering should call (800) 424-9393 or (202) 366-4761.

More information on odometer fraud is available on the NHTSA’s website, and tips on detecting and avoiding odometer fraud are available at this page.

A Topeka, Kansas, man has been charged in federal court with attempting to detonate a vehicle bomb at Fort Riley military base near Manhattan, Kansas, announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Barry Grissom of the District of Kansas and Special Agent in Charge Eric K. Jackson of the FBI’s Kansas City Division.  The defendant was arrested as part of an FBI investigation, and the device used by the defendant was, in fact, inert.         

John T. Booker Jr., 20, of Topeka, Kansas, was charged in a criminal complaint unsealed today with one count of attempting to use a weapon of mass destruction (explosives), one count of attempting to damage property by means of an explosive and one count of attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. Booker is expected to make an initial appearance this afternoon before U.S. District Judge Daniel Crabtree of the District of Kansas in federal court in Topeka.

Booker was arrested this morning near Manhattan, as he completed his final preparations to detonate a vehicle bomb targeting U.S. military personnel.

“As alleged in the complaint, John Booker attempted to attack U.S. military personnel on U.S. soil purportedly in the name of ISIL,” said Assistant Attorney General Carlin.  “Thanks to the efforts of the law enforcement community, we were able to safely disrupt this threat to the brave men and women who serve our country.  Protecting American lives by identifying and bringing to justice those who wish to harm U.S. citizens remains the National Security Division’s number one priority.”

“We face a continued threat from individuals within our own borders who may be motivated by a variety of causes,” said U.S. Attorney Grissom.  “Anyone who seeks to harm this nation and its people will be brought to justice.”

“I want to assure the public there was never any breach of Fort Riley Military Base, nor was the safety or the security of the base or its personnel ever at risk,” said FBI Special Agent in Charge Jackson.  “Recently the Command Staff at Fort Riley has been working hand in hand with law enforcement to ensure the utmost security and protection for the men and women who serve our country, and the surrounding community that supports the base."

Booker is alleged to have spent months discussing multiple plans before deciding on a plan that involved the execution of a suicide bombing mission.

The complaint alleges Booker told another person “that detonating a suicide bomb is his number one aspiration because he couldn’t be captured, all evidence would be destroyed, and he would be guaranteed to hit his target.”  Booker identified Fort Riley as a good target, “because the post is famous and there are a lot of soldiers stationed there,” the complaint alleges.

It is alleged that since March 2015, Booker plotted to construct an explosive device for an attack on American soil.  It is alleged he repeatedly stated that he desired to engage in violent jihad on behalf of ISIL.  Over a period of months, he took a series of actions to advance his plot.  As alleged in the complaint, Booker assisted in acquiring components for a vehicle bomb, produced a propaganda video, rented a storage locker to store components for the explosive device, identified Fort Riley as the target and talked about his commitment to trigger the device himself and become a martyr.

FBI Evidence Response Teams are executing search warrants related to the case.

If convicted, Booker would face a maximum penalty of life in prison. 

The investigation was conducted by the FBI Joint Terrorism Task Force, including members from the FBI’s Kansas City Division, the Topeka Police Department and the Kansas Highway Patrol.

The case is being prosecuted by Assistant U.S. Attorneys Tony Mattivi and David Smith of the District of Kansas, and Trial Attorneys Josh Parecki and Rebecca Magnone of the National Security Division’s Counterterrorism Section.

In all cases, defendants are presumed innocent until and unless proven guilty.  The charges merely contain allegations of criminal activity. 

Booker Complaint

Seven Tangipahoa Parish, Louisiana, residents were indicted today on charges of conspiracy to defraud the United States, theft of public money, mail fraud, aggravated identity theft and conspiracy to commit money laundering, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth Allen Polite Jr. of the Eastern District of Louisiana.  According to the indictment, the defendants conspired to file false income tax returns using stolen identities and then launder the resulting fraudulent tax refunds.

The indictment charges Corey Lewis aka Coco, 37, Angela Chaney, 43, Cedrick Mitchell aka Skeet, 39, Craig Lewis, 40, Brad Lewis aka Bird, 32, Thaddeus Richardson, 49, and Martin Jackson Sr., 48, with conspiracy to defraud the United States, conspiracy to commit money laundering, conspiracy to commit mail fraud and conspiracy to commit theft of public money.  In addition, Corey Lewis, Chaney, Richardson and Jackson Sr. were charged with various counts of theft of public money.  Chaney was also charged with six counts of mail fraud and five counts of aggravated identity theft.  Corey Lewis was additionally charged with three counts of aggravated identity theft. 

According to the allegations in the indictment, the defendants used individuals’ names and social security numbers in order to prepare false tax returns that claimed large tax refunds.  The refund checks were mailed to addresses in Louisiana, including to post office boxes that were opened by members of the conspiracy.  Once the tax refund checks were received, members of the conspiracy falsely endorsed the checks and cashed them.  Corey Lewis, Chaney and Mitchell deposited fraudulently obtained U.S. Treasury checks into bank accounts under their control.  Richardson and Jackson Sr. deposited checks into their business accounts, then provided some of the proceeds to their co-conspirators and kept the remaining proceeds for themselves.

If convicted, the defendants each face a statutory maximum sentence of 20 years in prison for each mail fraud count and each money laundering conspiracy charge, a statutory maximum sentence of 10 years in prison for each theft of public money count, a statutory maximum sentence of five years in prison for each conspiracy count, and a mandatory minimum sentence of two years in prison for each count of aggravated identity theft.  The defendants also face potential fines, forfeiture and restitution.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Trial Attorneys Hayden Brockett and Lauren Castaldi of the Tax Division and Assistant U.S. Attorney Dall Kammer of the Eastern District of Louisiana, who are prosecuting the case.

The charges contained in the indictment are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

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

A second Topeka, Kansas, man was charged Friday in connection with an alleged plot to detonate a vehicle bomb at the Fort Riley military base near Manhattan, Kansas, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Barry Grissom of the District of Kansas.

Alexander E. Blair, 28, is charged with one count of failing to report a felony.  A criminal complaint filed Friday in U.S. District Court in the District of Kansas alleges Blair knew of a plot by co-defendant John T. Booker Jr., 20, of Topeka, to detonate a bomb at Fort Riley.

The complaint alleges that in March 2014, the FBI began an investigation into Booker, who also called himself Mohammed Abdullah Hassan, concerning statements he made online indicating he wanted to wage jihad and to die in the process.  Booker was arrested April 10, 2015, and charged with attempting to use a weapon of mass destruction and two other counts.

During the investigation of Booker, law enforcement officers learned that Blair shared some of Booker’s extremist views and loaned Booker money for the purpose of renting a storage unit that Booker used to store components for a bomb.  The complaint alleges Blair knew of Booker’s intent to detonate a bomb at Fort Riley and to “kill as many soldiers as possible.”  Despite being convinced that Booker was serious about carrying out the plot, the complaint alleges, Blair chose not to report what he knew to the authorities.

If convicted, he faces a maximum penalty of three years in federal prison.  The case is being investigated by the FBI.  The case is being prosecuted by Assistant U.S. Attorney Jared Maag of the District of Kansas.

In all cases, defendants are presumed innocent until and unless proven guilty.  The charges merely contain allegations of criminal conduct.

Blair Complaint

A Jamaican man pleaded guilty today in the U.S. District Court in the Southern District of Florida in Fort Lauderdale to one count of conspiracy to commit wire fraud, the Justice Department announced today. 

Damion Bryan Barrett, 28, was extradited from Jamaica in February based on charges that he committed fraud as part of an international lottery scheme against elderly victims in the United States.  The prosecution is part of the United States’ ongoing crackdown on fraudulent international lottery schemes.

“Scammers in foreign countries preying on elderly victims in the United States are not immune from prosecution in the United States,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “This case demonstrates that we will bring those responsible to justice, wherever they may seek to hide.” 

“The protection of the most vulnerable members of our society, including the elderly, is one of the top priorities of the Department of Justice and of our office, and this case again shows that an international border is no defense for those who defraud our senior citizens,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.  “Regardless of where the criminals may be located, we will work together with our domestic and international law enforcement partners to bring them to the United States to hold them accountable for their crimes.  In particular, we thank the Jamaican authorities for their cooperation and assistance in our continuing efforts to stamp out these long-running lottery schemes that target older Americans.” 

Barrett was indicted by a federal grand jury in Fort Lauderdale on Aug. 9, 2012, and was arrested in Jamaica in January based on the United States’ request that he be extradited.  On Feb. 12, Barrett was the first Jamaican to be extradited to the United States based on charges that he committed fraud as part of an international lottery scheme.

As part of his guilty plea, Barrett acknowledged that had the case gone to trial, the United States would have proved beyond a reasonable doubt that from 2008 through 2012, Barrett was a member of a conspiracy in which elderly victims were informed that they had won a large amount of money in a lottery and were induced to pay bogus fees in advance of receiving their purported lottery winnings.  Barrett also admitted that the United States would have proved that he knew the claims of lottery winnings were completely fabricated and that he and his co-conspirators kept the victims’ money for their own benefit without paying any lottery winnings.  Barrett also admitted that the United States would have proved that in an effort to convince the victims that the lottery winnings were real, the conspirators sent the victims communications discussing their purported lottery winnings, which falsely claimed to be from a genuine sweepstakes company and from federal agencies including the Internal Revenue Service and the Federal Reserve.  In fact, these communications were not from a genuine sweepstakes company or from agencies of the United States.        

At his June 19 sentencing, Barrett faces a statutory maximum sentence of 30 years in prison and mandatory restitution.  Barrett’s co-defendant, Oneike Barnett, 29, pleaded guilty on Feb. 28, 2014, to conspiracy to commit wire fraud.  On April 29, 2014, U.S. District Court Judge William J. Zloch sentenced Barnett to serve 60 months in prison and five years of supervised release, and to pay $94,456 in restitution for his role in this case.    

Acting Assistant Attorney General Mizer and U.S. Attorney Ferrer commended the investigative efforts of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Postal Inspection Service and the U.S. Marshals Service.  The case is being prosecuted by Trial Attorney Kathryn Drenning of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bertha R. Mitrani of the Southern District of Florida.

A Chino, California, businessman was sentenced to serve more than four years in prison yesterday in the U.S. District Court in Las Vegas for his role in a conspiracy to promote and sell fraudulent tax products, including a product called Tax Break 2000, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

Daniel William Porter pleaded guilty to one count of conspiracy to defraud the United States.  U.S. District Judge Miranda Du sentenced Porter to serve 55 months in prison and three years of supervised release following his prison sentence.  As part of his plea agreement, Porter agreed to cooperate with the government and assist with its ongoing investigation into entities and individuals involved in the sale and promotion of Tax Break 2000. 

“Today’s sentence sends a clear and powerful message to those individuals who, like Mr. Porter, seek to evade and help others evade their federal tax obligations, that they will be prosecuted, convicted and sentenced to substantial terms of incarceration,” said Acting Assistant Attorney General Ciraolo.  “No individual is above the law, and the Tax Division, working with its partners at IRS-Criminal Investigation and the Offices of the U.S. Attorneys, will hold accountable those who engage in criminal conduct at the expense of honest taxpayers and the U.S. Treasury.”

According to court documents and court statements, Porter conceived and designed Tax Break 2000, which purported to be an online shopping website.  By at least November 2000 and continuing through at least July 2002, Porter conspired with others to promote and sell Tax Break 2000 to customers throughout the United States.  Customers were falsely and fraudulently told that purchasing Tax Break 2000 would allow them to claim legitimate income credits and deductions under the Americans with Disabilities Act (ADA) by modifying the website each customer was provided to make it accessible to the disabled.  The National Audit Defense Network (NADN) charged $10,475 for the product to maximize the fraudulent income tax credits and deductions that customers would claim on their federal income tax returns.  However, the customers only paid between $2,000 and $2,695 for the product.  The remainder of the cost was covered by a promissory note that customers were not expected to repay.

Porter sold Tax Break 2000 directly through Oryan Management and by contracting with other individuals and entities, including Donald Hicks, a tax return preparer in Gladstone, Missouri, and NADN in Las Vegas.  Through Hicks and NADN, Tax Break 2000 was sold to thousands of customers.  Alan Rodrigues, NADN’s former general manager and executive vice president, Weston Coolidge, the former president of NADN, and Joseph Prokop, the national director of marketing for Oryan Management and a former NFL punter, were convicted at trial in the District of Nevada for their roles in the sale and promotion of Tax Break 2000 in a separate criminal case. 

On March 10, at the sentencing of Rodrigues, Coolidge and Prokop, Judge Du found that the intended tax loss to the Internal Revenue Service (IRS) associated with NADN’s sale of Tax Break 2000 was more than $60 million and that the fraud loss to the customers who purchased Tax Break 2000 was more than $36 million.  Rodrigues was sentenced to serve 72 months in prison, Coolidge was sentenced to serve 70 months in prison, and Prokop was sentenced to serve 18 months in prison to be followed by 30 months home confinement.  All three defendants were ordered to pay restitution of more than $35 million to customers of NADN who purchased the fraudulent tax product.  Donald Hicks, who promoted the fraudulent tax products in Missouri, pleaded guilty in a separate criminal case in the Western District of Missouri.

Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and former Trial Attorneys Timothy J. Stockwell, Katherine L. Wong and Mark L. Williams, and Paralegal Larry Garland of the Tax Division, who prosecuted the case.  Ciraolo also thanked the U.S. Attorney’s Office in the District of Nevada in Las Vegas for their substantial assistance. 

A Colorado man was convicted by a federal jury of kidnapping a toddler and producing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Benjamin B. Wagner of the Eastern District of California.

Shawn McCormack, 31, of Colorado Springs, Colorado, was found guilty following a four-day trial of four counts of sexual exploitation of a child and two counts of kidnapping.  Senior U.S. District Judge Anthony W. Ishii of the Eastern District of California presided over the trial, and a sentencing hearing was scheduled for July 27, 2015.

According to evidence presented at trial, McCormack, feigning to be a friend, traveled to a couple’s residence in Bakersfield, California, and stayed as an overnight guest on multiple occasions.  During several of the overnight stays, in the middle of the night, McCormack snuck the couple’s toddler out of the house and recorded his sexual abuse of the toddler in a nearby motel, outdoors and in his truck.  McCormack then returned the toddler to the house before the parents awoke.  The evidence demonstrated that McCormack distributed the images and videos of his abuse to others online, including an undercover officer with the Toronto Police Services. 

According to the evidence presented at trial, Homeland Security Investigations agents in Boston found images and recordings distributed by McCormack on a separate defendant’s computer in Massachusetts.  The agents were able to identify the date, time and hotel room where one of the videos had been produced.  When agents visited that hotel, they learned that McCormack had rented that hotel room on the night when the recording was created.  During the investigation, agents uncovered evidence that McCormack had recorded his abuse of both of the couple’s children.

The investigation is being conducted by U.S. Immigration and Customs Enforcement’s Field Offices in Bakersfield, California, Colorado Springs, Colorado, and Boston, Massachusetts, the Bakersfield Police Department, the Colorado Springs Police Department, Toronto Police Services, and the FBI.

The case is being prosecuted by Trial Attorney Maureen C. Cain of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorneys Patrick R. Delahunty and Megan A.S. Richards of the Eastern District of California.  

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.

The Justice Department announced today that Shelbie Brooke Richards, 21, of Pearl, Mississippi, and Sarah Adelia Graves, 22, of Crystal Springs, Mississippi, were sentenced today in U.S. District Court in Jackson for their roles 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.  Richards had previously pleaded guilty to one count of conspiracy and one count of misprision for her role in the conspiracy and the cover-up.  Graves previously pleaded guilty to one count of conspiracy for her role.  Richards was sentenced to 96 months in prison and Graves was sentenced to 60 months in prison.  A restitution hearing will be set for a later date.

Six 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, and William Kyle Montgomery, 25, of Puckett, Mississippi, were previously sentenced to 600 months, 220 months, 78 months, 48 months, 48 months, and 224 months, respectively, for their roles in the conspiracy.  Two other defendants involved in related cases—John Louis Blalack, 21, and Robert Henry Rice, 24, both of Brandon, Mississippi—are 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 others 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 in Mississippi.  “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 defendants had admitted that beginning in the spring of 2011, they 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.

Richards and Graves admitted their involvement in two racially motivated assaults, including the beating and killing of James Craig Anderson.  Specifically, they admitted that in the early morning hours of June 26, 2011, they and five other co-conspirators agreed to carry out their plan to find, harass and assault African Americans.  At around 4:15 a.m., Montgomery, John Aaron Rice, Blalack, and Butlers drove to west 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.  Rice and Blalack got out of the Jeep to distract Anderson while they waited for the 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.  Richards initially falsely told law enforcement officials that she did not know the reason for the assault and did not encourage Dedmon to hit the victim with the truck.  Richards later admitted that she knew that the assault was racially motivated and that she and Graves encouraged Dedmon to commit the fatal assault.  

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, and Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.

United States Sues Two Other Companies and Three Individuals for Similar Violations

Cardiovascular testing disease laboratories Health Diagnostics Laboratory Inc. (HDL), of Richmond, Virginia, and Singulex Inc., of Alameda, California, have agreed to resolve allegations that they violated the False Claims Act by paying remuneration to physicians in exchange for patient referrals and billing federal health care programs for medically unnecessary testing, the Department of Justice announced today.  Under the settlements, which stem from three related whistleblower actions filed under the federal False Claims Act, HDL will pay $47 million and Singulex will pay $1.5 million.  The government also intervened in the lawsuits as to similar allegations against another laboratory, Berkeley HeartLab Inc.; a marketing company, BlueWave Healthcare Consultants Inc., and its owners, Floyd Calhoun Dent and J. Bradley Johnson; and former CEO Latonya Mallory of HDL.

“Health care providers that attempt to profit by providing illegal inducements will be held accountable,” said Acting Assistant Attorney General Benjamin C. Mizer for the Justice Department’s Civil Division.  “We will continue to advocate for the appropriate use of Medicare funds and the proper care of our senior citizens.”

As alleged in the lawsuits, HDL, Singulex and Berkeley induced physicians to refer patients to them for blood tests by paying them processing and handling fees of between $10 and $17 per referral and by routinely waiving patient co-pays and deductibles.  In addition, HDL and Singulex allegedly conspired with BlueWave to offer these inducements on behalf of HDL and Singulex.  As a result, physicians allegedly referred patients to HDL, Singulex and Berkeley for medically unnecessary tests, which were then billed to federal health care programs, including Medicare.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federally funded programs.  The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.  

“The District of South Carolina has more than doubled its resources allocated to the pursuit of fraud, including matters brought to our attention by whistleblowers,” said U.S. Attorney Bill Nettles of the District of South Carolina.  “Whistleblower actions are a critical tool for holding health care providers accountable for fraudulent and abusive practices not only in South Carolina but nationwide.”

“When health care companies pursue profits by paying kickbacks to doctors, they undermine a patient’s ability to trust that medical decisions are being made for scientific reasons, not financial ones,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia.  “Those kickbacks also harm the taxpayer because they drive up the cost of federal health care programs with medically unnecessary tests.  This significant settlement shows our determination to work with whistleblowers and our federal partners to defend the integrity of the health care system from illegal agreements that hurt patients and taxpayers.”

As part of the settlements, HDL and Singulex have agreed to enter into separate corporate integrity agreements with the Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  Those agreements provide for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to these settlements.

“Today’s announcement that DOJ has settled in part and intervened in part in these whistleblower actions reflects the commitment by DOJ, our agency and our other law enforcement partners to ferret out alleged improper Medicare billings by health care companies that are looking to increase their profits at the expense of taxpayers,” said Special Agent in Charge Derrick L. Jackson of the HHS-OIG Atlanta Regional Office.

The lawsuits were filed by Dr. Michael Mayes, Scarlett Lutz, Kayla Webster and Chris Reidel under the qui tam, or whistleblower, provisions of the False Claims Act.  Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  The whistleblowers’ share of the settlements has yet to be determined.  The act also permits the United States to intervene in and take over a whistleblower suit, as it has done in part in the three actions.  The United States advised the court that it would be filing its own complaint against the corporate and individual defendants against whom it has intervened within 120 days.

Two of the lawsuits separately allege that the former CEO Phillipe Goix of Singulex and Quest Diagnostics Inc., parent of Berkeley, are liable for the scheme; the government declined to intervene in the allegations against Goix and Quest. 

The government’s actions illustrate its 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 $23.9 billion through False Claims Act cases, with more than $15.2 billion of that amount recovered in cases involving fraud against federal health care programs.

These matters were investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Offices of the District of South Carolina, the District of Columbia and the Middle District of North Carolina, HHS-OIG, the FBI, the U.S. Office of Personnel Management’s Office of Inspector General, and the Department of Defense’s Office of Inspector General Defense Criminal Investigative Service.

The cases are captioned United States ex rel. Mayes v. Berkeley HeartLab Inc., et al., Case No. 9:11-CV-01593-RMG (D.S.C.); United States ex rel. Riedel v. Health Diagnostic Laboratory, Inc., et al., Case No. 1:11-CV-02308 (D.D.C.); and United States, et al. ex rel. Lutz, et al. v. Health Diagnostic Laboratory, Inc., et al., Case No. 9:14-CV-0230-RMG (D.S.C.).  The claims settled by these agreements and asserted against these companies and individuals are allegations only, and there has been no determination of liability.

Three Montgomery, Alabama, men were sentenced to prison today in the U.S. District Court for the Middle District of Alabama for their participation in a stolen identity refund fraud (SIRF) tax scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.

Cruz Castillo Burnett, 28, Jacorey Giddens, 27, and Rodrickus Howard, 24, were each sentenced to serve 40 months in prison and three years of supervised release.  Burnett was ordered to pay restitution in the amount of $209,041, Giddens was ordered to pay restitution in the amount of $151,260 and Howard was ordered to pay restitution in the amount of $220,136.  Each defendant previously pleaded guilty to one count of conspiracy to defraud the government and one count of aggravated identity theft.          

According to plea documents, Burnett, Giddens and Howard conspired to acquire the names, social security numbers and dates of birth of individuals without their knowledge or consent.  The indictment alleged that from March 2011 to April 2013, the defendants used these stolen identities to file more than 500 false federal income tax returns that claimed refunds from the Internal Revenue Service (IRS).  As part of the scheme, the defendants requested more than $1 million in refunds from the IRS.  The defendants received the refunds in various forms, including U.S. Treasury checks, direct deposits to bank accounts and direct deposits onto prepaid debit cards in the names of identity theft victims.  

Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck Jr. commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Gregory P. Bailey and Michael C. Boteler of the Tax Division and Assistant U.S. Attorney Todd Brown of the Middle District of Alabama, who prosecuted the case.         

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

A resident of Commerce Township, Michigan, was sentenced to serve 18 months in prison to be followed by one year of supervised release for criminal contempt, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. 

In July 2014, Doreen Hendrickson was convicted of criminal contempt following a federal jury trial in Detroit.  Hendrickson violated an injunction involving federal tax obligations issued by U.S. District Judge Nancy Edmunds of the Eastern District of Michigan in May 2007.  Today’s sentence was imposed by U.S. District Judge Victoria Roberts.

According to court filings and evidence presented at trial, Hendrickson and her husband, Peter Hendrickson, filed federal income tax returns for the years 2002 and 2003 on which they falsely claimed they earned zero wages.  Based on these false returns, the Internal Revenue Service (IRS) issued the Hendricksons more than $20,000 in income tax refunds that they were not entitled to receive.  In 2006, the Tax Division sued the Hendricksons to recover these refunds.  As part of that litigation, Judge Edmunds ordered the Hendricksons to file corrected amended tax returns for 2002 and 2003 that reported all of their income, and further ordered them to repay their fraudulently obtained refunds to the IRS.  Judge Edmunds also barred the Hendricksons from filing additional false tax returns.

In 2009, Peter Hendrickson was convicted of filing multiple false income tax returns, including the 2002 and 2003 returns that he filed jointly with his wife.  The tax returns at issue were based on the false and frivolous tax theories that Peter Hendrickson promoted in his book, “Cracking the Code,” and on his website, Lost Horizons.  Peter Hendrickson was sentenced to serve 27 months in prison in that case.  

The evidence presented at Doreen Hendrickson’s trial showed that she violated the injunction issued by Judge Edmunds when she failed to file amended 2002 and 2003 tax returns.  Also, in direct violation of Judge Edmunds’s order, Hendrickson filed a false income tax return for 2008 on which she falsely claimed that wages she earned as a movie extra were not taxable.  This tax return was submitted while her husband was under indictment for filing false tax returns.

Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Melissa S. Siskind, Jeffrey B. Bender and Jeffrey A. McLellan 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.

A member of the identity theft and credit card fraud ring known as “Carder.su” was sentenced today to 150 months in federal prison for selling stolen and counterfeit credit cards over the Internet.  He was further ordered to pay $50.8 million in restitution.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Assistant Special Agent in Charge Michael Harris of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Las Vegas Field Office made the announcement.  U.S. District Judge Andrew P. Gordon of the District of Nevada imposed the sentence.

“Criminal cyber organizations like Carder.su threaten not just U.S. citizens but people in every corner of the globe,” said Assistant Attorney General Caldwell.  “Managers in Russia seamlessly ran their criminal enterprise online using, among others, a counterfeit card vendor from New Jersey, with whom they communicated through screen name aliases.  The success in this case was achieved through equally seamless cooperation with our foreign law enforcement partners and effective use of the RICO statute.  As more countries work with us to fight these organizations, we will continue to evolve to meet this growing threat.”

“Mr. Smith’s crimes were very serious and justify a lengthy prison sentence,” said U.S. Attorney Bogden.  “He admitted that he caused a loss of seven to $20 million involving over 250 victims, and that he obstructed justice when he fled to Jamaica while released on bond awaiting trial.  We are working closely with our international, federal, state and local law enforcement partners to make sure that the perpetrators of these sorts of crimes are prosecuted no matter where in the world they commit their crimes or attempt to flee.”

“As this sentence demonstrates, cyber-criminals who purposely harm innocent Americans and compromise our financial system and global commerce will be aggressively pursued, investigated and prosecuted,” said Assistant Special Agent in Charge Harris.  “These criminals may believe they can escape detection by fleeing the country and hiding behind their computer screens, but as this case shows, cyberspace is not a refuge from justice.”

Jermaine Smith, aka “SirCharlie57,” aka “Fairbusinessman,” 34, of East Orange, New Jersey, pleaded guilty in October 2014 to one count of participating in a racketeer influenced corrupt organization.   

During his guilty plea, Smith admitted that in May 2009 he became associated with the Carder.su organization, a criminal enterprise whose members trafficked in compromised credit card account data and counterfeit identifications, and committed money laundering, narcotics trafficking, and various types of computer crime.  Specifically, Smith admitted that he operated as a vendor on the organization’s websites, using the “SirCharlie57” and “Fairbusinessman” nicknames.  While acting as a vendor under those online monikers, Smith sold counterfeit credit cards to an undercover special agent.  Those counterfeit credit cards were successfully processed for fingerprints, identifying Smith as the true user of the online screennames.  In addition to the sale of the counterfeit credit cards, Smith admitted that he possessed over 2,150 stolen credit and debit card account numbers. 

While on pretrial release in this case, Smith removed an electronic monitoring device from his person and fled to Jamaica.  He was arrested four months later and returned to Nevada.

Fifty-six individuals were charged in four separate indictments in Operation Open Market, which targeted the Carder.su organization.  To date, 26 individuals have been convicted and the rest are either fugitives or are pending trial.   

The cases were investigated by ICE-HSI and the U.S. Secret Service, and are being prosecuted by Trial Attorney Jonathan Ophardt of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Kimberly M. Frayn and Andrew W. Duncan of the District of Nevada.

This prosecution is 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 is 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.  For more information on the task force, please visit www.StopFraud.gov.

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney John W. Vaudreuil of the Western District of Wisconsin and Special Agent in Charge Robert J. Shields Jr. of the FBI’s Milwaukee Division announced that Joshua Ray Van Haften, 34, of Madison, Wisconsin, has been charged with attempting to provide material support and resources, namely himself as personnel, to a foreign terrorist organization.  As alleged in the complaint, Van Haften intended to travel into Iraq or Syria to join the Islamic State of Iraq and the Levant (ISIL). 

The complaint alleges that Van Haften left the United States on Aug. 26, 2014, and traveled to Istanbul.  As alleged in the complaint, Turkey shares a land border with Syria and is known to be an entry point into Syria for those who wish to join ISIL. 

“Van Haften traveled overseas for the alleged purpose of joining and attempting to provide material support to ISIL,” said Assistant Attorney General Carlin.  “Stemming the flow of foreign fighters to Iraq and Syria and holding accountable those who attempt to provide material support to designated foreign terrorist organizations remains a top priority for the National Security Division.  I would like to thank all the agents, analysts and prosecutors who are responsible for this case.”

“We will continue to work with our law enforcement partners to investigate, arrest, and vigorously prosecute all extremists who choose to aid ISIL, or any other terrorist organization, and to stop them before they harm the United States or our allies,” said U.S. Attorney Vaudreuil.  “We also remain committed to working with dedicated community members to bring this cycle to an end.”

“This arrest underscores the importance of our JTTF law enforcement partnerships to bring those to justice who provide support and resources to terrorist organizations such as ISIL,” said Special Agent in Charge Shields.  “We hope this arrest will serve as a deterrent for others who may be terrorist sympathizers here in Wisconsin, across the nation or abroad: they will be held accountable for support of terrorism against our citizens and our international partners.”

Van Haften was arrested at O’Hare Airport in Chicago yesterday evening after his arrival in custody on an international flight from Turkey. 

Van Haften will make an initial appearance in U.S. District Court at 9:45 a.m. CDT today before U.S. Magistrate Judge Stephen L. Crocker of the Western District of Wisconsin.   If convicted, the defendant faces a maximum penalty of 15 years in federal prison. 

This case was investigated by the Joint Terrorism Task Force, the members of which include the FBI, the Wisconsin Department of Justice’s Division of Criminal Investigation, the Dane County Sheriff’s Office and the University of Wisconsin Police Department.  Assistance was also provided by the Department of Homeland Security.  The case is being prosecuted by U.S. Attorney Vaudreuil and Assistant U.S. Attorney Jeffrey Anderson of the Western District of Wisconsin, and Trial Attorney Lolita Lukose of the Justice Department’s National Security Division.

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

Van Haften Complaint

A Las Vegas tax return preparer was indicted yesterday on 66 counts of preparing and causing the filing of false tax returns, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Daniel G. Bogden of the U.S. Attorney’s Office for the District of Nevada announced today.

According to the allegations in the indictment, Rosherral Beverly, of Clark County, Neveda, operated a tax preparation and bookkeeping business named RBTB Inc.  From approximately 2006 through 2011, Beverly was RBTB Inc.’s sole owner and tax return preparer.  Beverly aided and assisted in preparing false and fraudulent tax returns for her clients for the tax years 2008, 2009 and 2010.  The tax returns included various false items, including charitable contributions, gambling losses, tuition deductions, education credits and job, travel and vehicle expenses.

If convicted, Beverly faces a statutory maximum sentence of three years in prison and a $250,000 fine for each count of aiding and assisting in the preparation of false tax returns.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Bogden commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorney Christopher J. Maietta of the Tax Division and Assistant U.S. Attorney Nicholas D. Dickinson of the District of Nevada, who are prosecuting the case. 

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

More information about the Tax Division and its enforcement efforts is available on the division’s website.

A former trooper with the Ohio State Highway Patrol was sentenced today in Columbus, Ohio, to 60 months in federal prison for coercing four female victims to engage in sexual acts in exchange for lenient treatment in connection with potential criminal cases and traffic tickets.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division, Superintendent of the Ohio State Highway Patrol (OSP) Colonel Paul A. Pride and Licking County Prosecutor Kenneth W.  Oswalt made the announcement.  U.S. District Judge Michael H. Watson of the Southern District of Ohio imposed the sentence.

Bryan D. Lee, 31, of Lancaster, Ohio, pleaded guilty on Oct. 29, 2014, to four counts of violating the civil rights of female motorists and one count of engaging in cyber stalking.  Lee served as an OSP Trooper from approximately January 2006 until October 2013.  As part of his plea, Lee admitted that he violated the civil rights of four female victims by coercing them in his official capacity to commit sexual acts, some of which he photographed, in exchange for his agreement not to file criminal charges or issue traffic infractions against the victims or their friends.  Lee further admitted that he engaged in sexual contact with certain victims while they were under arrest and restrained in handcuffs.  Lee also harassed and threatened some of the victims, including sending threatening electronic messages to one individual who he pulled over twice during a one-month period.

This case was investigated by the Columbus office of the FBI’s Cincinnati Division and OSP.  The case was prosecuted by Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney J. Michael Marous of the Southern District of Ohio.  Also assisting in the investigation was Fairfield County Special Prosecutor Martin Frantz.

Attorney General Eric Holder released the following statement on the departure of U.S. Attorney John Kacavas:

“For nearly six years as United States Attorney for the District of New Hampshire, John Kacavas’ impressive record of public service has reflected his dynamic leadership, his consummate skill and his unshakeable devotion to justice in the face of pressing concerns and daunting challenges.  Through his outstanding efforts, he has safeguarded the people of New Hampshire and left an indelible mark on the nation. 

“As Chairman of the Attorney General’s Advisory Committee’s Forensic Science Working Group, John has been an indispensable advisor to me, guiding the Justice Department’s use of forensic science to ensure that we rely on it knowledgeably, responsibly and effectively.  Through his critical work as part of the Child Exploitation and Obscenity Working Group, John has helped uphold the Department’s promise to protect and defend the most vulnerable members of our society.  In every case and every circumstance, John has demonstrated his unwavering commitment to public service, to professional integrity and to the cause of justice.  I thank John for his exemplary service, I wish him the best of luck and I look forward to all that he will continue to achieve.”

The Department of Justice filed a complaint in the U.S. District Court of the Eastern District of North Carolina today seeking the arrest and extradition of a former colonel in the Salvadoran army to face charges in Spain related to the murder of five Spanish Jesuit priests in El Salvador in 1989.    

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina made the announcement.

Inocente Orlando Montano Morales, 72, formerly of Everett, Massachusetts, and 19 other former Salvadoran military officials have been indicted in Spain for the 1989 murders of five Spanish Jesuit priests during the 10-year Salvadoran civil conflict.  An arrest warrant for Montano was issued by a Spanish magistrate.

According to allegations in the complaint filed in U.S. District Court today, between 1980 and 1991, El Salvador was engulfed in a civil conflict between the military-led government and the Farabundo Martí National Liberation Front (FMLN).  During this conflict, in the early morning hours of Nov. 16, 1989, members of the Salvadoran military allegedly murdered six Jesuit priests, their housekeeper and the housekeeper’s 16-year old daughter at the Universidad Centroamericana.  Five of the Jesuit priests were Spanish nationals, and the remaining victims were from El Salvador.  The Jesuit priests were allegedly advocates for discussions between the FMLN and the military-led government to end the strife. 

At the time, Montano Morales was a colonel in the Salvadoran army, and he also served as Vice Minister of Defense and Public Safety.  The complaint alleges that he shared oversight responsibility over a government radio station that, days before the massacre, issued threats urging the murder of the Jesuit priests.  The day before the murders, Montano Morales also allegedly participated in a series of meetings during which one of his fellow officers gave the order to kill the leader of the Jesuits and leave no witnesses.  The following day, members of the Salvadoran army allegedly executed the six priests, their housekeeper and the housekeeper’s daughter.

Montano Morales is currently serving a 21-month federal prison sentence in the United States for his 2013 conviction in the District of Massachusetts for immigration fraud and perjury in connection with false statements he made to immigration authorities to remain in the United States.  He will be released from that prison sentence on April 16, 2015.   

The allegations contained in the complaint are merely accusations, and any finding of guilt or innocence will be made by Spanish courts upon Montano Morales’s extradition.

The case is being handled by Assistant U.S. Attorney Eric Goulian and Special Assistant U.S. Attorney John Capin of the Eastern District of North Carolina and Trial Attorney Roberto Iraola of the Criminal Division’s Office of International Affairs.

Montano Morales Complaint

The leader of a sex trafficking ring pleaded guilty today to charges stemming from his interstate prostitution enterprise, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney J. Walter Green of the Middle District of Louisiana and Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Division.

Jeremie J. Tate, 33, of Zachary, Louisiana, pleaded guilty this morning before U.S. District Judge Shelly D. Dick of the Middle District of Louisiana to conspiracy to unlawfully use interstate facilities in aid of racketeering, two counts of use of interstate facilities in aid of racketeering and enticing another to travel interstate for prostitution.  After evading arrest for several days, Tate was apprehended in Houston, Texas, on April 25, 2014, by the U.S. Marshals Service Fugitive Task Force and the FBI’s New Orleans Division.  Tate has remained in federal custody since his arrest.

According to the plea agreement filed in the case, from November 2012 through November 2013, Tate operated a prostitution business based in Baton Rouge involving multiple prostitutes, including a minor.  Tate and others, used telephones and the Internet to arrange online advertising, schedule prostitution sessions and recruit other prostitutes.  Tate admitted that he took most of the proceeds from the prostitution business and distributed controlled substances to his prostitutes and others to manipulate and intimidate them.  In his plea agreement, Tate specifically admitted that he enticed a prostitute to travel from Baton Rouge to Las Vegas in December 2012 to engage in prostitution for him. 

Three other individuals have already pleaded guilty and are awaiting sentencing for their roles in this sex trafficking ring.

The case is being investigated by the FBI’s New Orleans Division, Louisiana Attorney General’s Office, Louisiana State Police and East Baton Rouge, Louisiana, Sheriff’s Office, with assistance from the Baton Rouge, Louisiana, Police Department’s Narcotics Division, U.S. Marshals Service Fugitive Task Force and other law enforcement agencies.  The case is being prosecuted by Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Jamie A. Flowers Jr. of the Middle District of Louisiana.

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.

Orlando, Florida, based Air Ideal Inc. and its majority owner, Kim Amkraut, have agreed to pay the United States $250,000 to resolve allegations that they made false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company, the Justice Department announced today.  Under the settlement, the defendants must also pay five percent of Air Ideal’s gross revenues over the next five years.

“When companies falsely claim eligibility for government contracts set aside for HUBZone businesses, they not only misuse taxpayer funds, but they also deprive HUBZone communities of the benefits of the program,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “This settlement shows that there is a stiff price to pay for obtaining government contracts through false statements.”

“The HUBZone program is an important tool in the government’s effort to strengthen our economy by encouraging businesses to grow in underutilized and disadvantaged areas,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida.  “We will not tolerate contractors who use deception to undermine its objectives and effectiveness.”

The purpose of the HUBZone program is to stimulate job growth in areas that have historically had low business investment.  Under the HUBZone program, companies that maintain their principal office in a designated HUBZone and meet certain other requirements can apply to the SBA for certification as a HUBZone small business company.  HUBZone companies can then use this certification when bidding on government contracts.  In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.

The United States’ complaint alleged that Air Ideal and Amkraut originally applied to the HUBZone program in 2010 by claiming that Air Ideal’s principal office was located in a designated HUBZone.  The complaint further alleged that, in fact, this location was a “virtual office” where no Air Ideal employees worked, and that Air Ideal was actually located in a non-HUBZone location.  Allegedly, the defendants not only misrepresented the location of Air Ideal’s principal office to the SBA, but also submitted to the SBA a fabricated lease agreement and other fabricated documents for its purported HUBZone office.  The complaint further alleged that during the government’s investigation of this case, the defendants fabricated another version of its agreement for the virtual office and submitted that false document to the government.

The complaint alleged that Air Ideal used its fraudulently-procured HUBZone certification to obtain contracts from the U.S. Coast Guard, U.S. Army, U.S. Army Corps of Engineers and the U.S. Department of the Interior.  Each of those contracts had been set aside for qualified HUBZone companies.  The United States’ complaint asserted claims against Air Ideal and Amkraut under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

“The OIG will aggressively investigate intentional misrepresentations made by individuals who lie in order to claim eligibility for SBA set-aside programs,” said Inspector General Peggy E. Gustafson of the SBA.  “I want to thank the U.S. Department of Justice for its dedication to pursuing justice in this case.”

The settlement resolves allegations brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by Patricia Hopson, who is employed in the construction industry.  Under the act, a private citizen can sue on behalf of the United States and share in any recovery.  The United States is entitled to intervene in the lawsuit, as it did here.  As part of the resolution, Ms. Hopson will receive $42,500.

This matter was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Middle District of Florida, in conjunction with the SBA’s Office of Inspector General (OIG) and Office of General Counsel, the Department of Homeland Security’s Office of Inspector General, and the Defense Criminal Investigative Service.

The case is U.S. ex rel. Hopson v. Air Ideal, Inc. and Kim Amkraut, No. 6:13-cv-775-Orl-37GJK (M.D. Fla.).

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

On Apr. 7, 2015, a federal grand jury in Knoxville, Tennessee, indicted Marcus Washington, 37, of Farragut, Tenn., charging him with  two counts of sex trafficking by force, threats of force, fraud and coercion; conspiracy to possess with the intent to distribute a controlled substance; and possession with the intent to distribute a controlled substance.

The indictment, on file with the U.S. District Court, charges Washington with separate counts of sex trafficking by force, threats of force, fraud and coercion in relation to two victims.  He is also charged with conspiring with others to possess with the intent to distribute, and the distribution of, oxycodone, a Schedule II controlled substance, and a substance containing a detectable amount of cocaine, also a Schedule II controlled substance.  Lastly, Washington is charged with possessing with the intent to distribute oxycodone.

Washington faces a mandatory minimum of 15 years incarceration if convicted of either trafficking charge.  Both narcotics charges carry a statutory maximum of 20 years in prison.

This case was investigated by the FBI.  The Knox County Sheriff’s Office and the Knox County Attorney General’s Office provided significant support in this investigation.  The case is being prosecuted by Trial Attorney Nicholas Durham of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Brooklyn Sawyers of the U.S. Attorney’s Office for the Eastern District of Tennessee. 

Members of the public are reminded that these are only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.

Defendant Allegedly is Part of ISIL Foreign Fighter Local Support Network; Travelled to Kennedy Airport on Feb. 25 to Provide Cash to Co-Defendant Shortly Before Co-Defendant Was Arrested Attempting to Board Flight to Turkey to Join ISIL

U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Attorney General for National Security John P. Carlin, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office, Commissioner William J. Bratton of the New York City Police Department and Special Agent in Charge Raymond R. Parmer Jr. of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) New York announced that earlier today, a federal grand jury in Brooklyn, New York, returned a superseding indictment charging Dilkhayot Kasimov, 26, a Brooklyn resident, with attempt and conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization.  The defendant, who is charged along with three other Brooklyn residents whose arrests were first announced on Feb. 25, 2015, is scheduled to be arraigned on Wednesday, April 8, 2015, at 2 p.m., before U.S. District Judge William F. Kuntz II of the Eastern District of New York.

As alleged in the superseding indictment and other court filings, the investigation began last year when Abdurasul Hasanovich Juraboev, one of Kasimov’s co-defendants, came to the attention of law enforcement after posting on an Uzbek-language website that propagates ISIL’s ideology.  The investigation subsequently revealed that Juraboev and another co-defendant, Akhror Saidakhmetov, planned to travel to Turkey and then to Syria for the purpose of waging violent jihad on behalf of ISIL.  Saidakhmetov was arrested on Feb. 25, 2015, at John F. Kennedy International Airport, where he was attempting to board a flight to Istanbul.  Juraboev previously purchased a plane ticket to travel from New York to Istanbul and had been scheduled to leave the United States in March 2015.

Working closely with co-defendant Abror Habibov, Kasimov allegedly helped fund Saidakhmetov’s efforts to join ISIL.  Kasimov and Habibov collected over $1,600 from multiple individuals for Saidakhmetov to use in Syria.  Kasimov thereafter delivered the money to Saidakhmetov at Kennedy Airport shortly before Saidakhmetov was apprehended trying to board his flight in February.  Additional investigation uncovered electronic messages in which Kasimov encouraged others to participate in violent jihad and made clear his role in facilitating the travel of foreign fighters to Syria.

“This defendant is the fourth Brooklyn resident charged as part of the same network of individuals who are alleged to have conspired and attempted to provide material support to ISIL,” said U.S. Attorney Lynch.  “Terrorist support networks like the one this defendant was involved in offer critical funding, travel logistics, and encouragement to persons seeking to join ISIL and other foreign terrorist organizations.  We will remain vigilant in our efforts to stem the flow of foreign fighters to Syria and to disrupt and dismantle the networks, here and abroad, that support them.”  U.S. Attorney Lynch extended her grateful appreciation to the FBI’s Joint Terrorism Task Force, which comprises a large number of federal, state and local agencies from the region.

“Dilkhayot Kasimov allegedly attempted and conspired with others to provide material support to ISIL,” said Assistant Attorney General Carlin.  “The National Security Division remains committed to holding accountable all who seek to provide material support to designated foreign terrorist organizations.  I would like to thank all of the agents, analysts and prosecutors who are responsible for this case.”

“Kasimov served as a money man in support of a co-defendant’s efforts to join ISIL,” said Assistant Director in Charge Rodriguez.  “He provided encouragement and facilitated travel for foreign fighters.  As the recent series of cases indicate, we will pursue every lead and every person who succumbs to this radical agenda.  It is my hope that these cases deter others from sharing Kasimov’s fate: being under arrest and in trouble with the law.”

“Money is the oxygen that fuels terrorism,” said Commissioner Bratton.  “This investigation proves again that we will leave no stone unturned to disrupt the finance, support, or membership in terrorist organizations like ISIL.”

“These arrests are the culmination of an extensive joint law enforcement effort to disrupt the recruitment of alleged terrorist sympathizers,” said Special Agent in Charge Parmer.  “ICE-HSI will continue to use its unique immigration and customs authorities to assist our domestic and international law enforcement partners to stop jihadists from supporting terrorist organizations such as ISIL.”

If convicted, the defendant faces a maximum sentence of 30 years in prison.  The charges in the superseding indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being handled by Assistant U.S. Attorneys Alexander Solomon, Douglas M. Pravda and Peter W. Baldwin of the Eastern District of New York, with assistance provided by Trial Attorney Danya Atiyeh of the Justice Department’s National Security Division.

Kasimov Superseding Indictment

A former executive of an e-commerce seller of posters, prints and framed art has agreed to plead guilty for conspiring to fix the prices of posters sold online, the Department of Justice announced.

A one-count felony charge was filed today in the U.S. District Court of the Northern District of California in San Francisco against David Topkins.  According to the charge, Topkins and his co-conspirators fixed the prices of certain posters sold online through Amazon Marketplace from as early as September 2013 until in or about January 2014.  Topkins also has agreed to pay a $20,000 criminal fine and cooperate with the department’s ongoing investigation.  The plea agreement is subject to court approval.

“Today’s announcement represents the division’s first criminal prosecution against a conspiracy specifically targeting e-commerce,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division.  “We will not tolerate anticompetitive conduct, whether it occurs in a smoke-filled room or over the Internet using complex pricing algorithms.  American consumers have the right to a free and fair marketplace online, as well as in brick and mortar businesses."

According to the charge, Topkins and his co-conspirators agreed to fix the prices of certain posters sold in the United States through Amazon Marketplace.  To implement their agreements, the defendant and his co-conspirators adopted specific pricing algorithms for the sale of certain posters with the goal of coordinating changes to their respective prices and wrote computer code that instructed algorithm-based software to set prices in conformity with this agreement.  

“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations seeking to victimize online consumers through illegal anticompetitive conduct,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office.  “The FBI is committed to investigating price fixing schemes and remains unwavering in our dedication to bring those responsible for theses illegal conspiracies to justice.”                   

Topkins is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence of 10 years and a fine of $1 million for individuals.  The maximum fine for an individual 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.

This prosecution arose from an ongoing federal antitrust investigation into price fixing in the online wall décor industry, which is being conducted by the Antitrust Division’s San Francisco Office with the assistance of the FBI’s San Francisco Field Office.  Anyone with information on price fixing or other anticompetitive conduct related to other products in the wall décor industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.

Topkins Information

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois and Special Agent in Charge Robert J. Holley of the FBI’s Chicago Field Office announced today that two Aurora, Illinois, men were indicted on Thursday for allegedly conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization.         

U.S. Army National Guard Specialist Hasan Edmonds, 22, and his cousin, Jonas Edmonds, 29, were arrested last month by members of the Chicago FBI’s Joint Terrorism Task Force (JTTF) and remain in federal custody.  The defendants were charged in an indictment filed yesterday in U.S. District Court of the Northern District of Illinois with one count of conspiring to provide material support and resources to a foreign terrorist organization.  Both defendants will be arraigned on April 8, at 10:00 before Magistrate Judge Sheila M. Finnegan.

Conspiring to provide material support to a foreign terrorist organization carries a maximum penalty of 15 years in prison and a $250,000 fine.  If convicted, the court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is being represented by Assistant U.S. Attorneys Barry Jonas and John Kness of the Northern District of Illinois, and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.    

Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania announced that Keonna Thomas, also known as Fatayat Al Khilafah and YoungLioness, 30, of Philadelphia, was charged today by criminal complaint with knowingly attempting to provide material support and resources, including herself as personnel, to a designated foreign terrorist organization.  According to the complaint, Thomas attempted to travel overseas in order to join and fight with the Islamic State of Iraq and the Levant (ISIL).

As alleged in the complaint, Thomas posted on Twitter the following statement: “If we truly knew the realities . . . we all would be rushing to join our brothers in the front lines pray ALLAH accept us as shuhada [martyrs].”  The complaint further alleges that Thomas applied for a U.S. passport and advised an associate that she had deactivated her Twitter “till i leave for sham [greater Syria]. . . .  don’t want to draw attention of the kuffar [non-believers].”  Thomas then allegedly engaged in electronic communications with an ISIL fighter in Syria, who asked Thomas if she wanted to be a part of a martyrdom operation.  Thomas responded by stating, “that would be amazing….a girl can only wish.”  Thomas also allegedly conducted online research into various indirect travel routes to Turkey, and allegedly purchased an electronic visa to Turkey.  The complaint alleges that Turkey is known to be the most common and most direct transit point for individuals traveling from locations in Europe who are seeking to enter Syria and join ISIL.   On or about March 26, 2015, Thomas allegedly purchased airline tickets to fly overseas on March 29, 2015. 

If convicted, the defendant faces a maximum possible sentence of 15 years’ incarceration.

The case was investigated by the FBI’s Joint Terrorism Task Force and the Philadelphia Police Department.  It is being prosecuted by Assistant U.S. Attorney Jennifer Arbittier Williams of the Eastern District of Pennsylvania and Trial Attorney Paul Casey of the Justice Department’s National Security Division.

A criminal complaint is an accusation.  A defendant is presumed innocent unless and until proven guilty.

The Justice Department has filed suit in the U.S. District Court for the District of Massachusetts against Michael P. Ferry Inc. and its owner, Michael P. Ferry (Ferry), to block them from violating the Federal Food, Drug and Cosmetic Act (FDCA) in connection with their alleged unlawful use of new animal drugs in cows slaughtered for food.  The Justice Department filed the suit on behalf of the U.S. Food and Drug Administration (FDA). 

The defendants have agreed to settle the litigation and be bound by a consent decree of permanent injunction that enjoins them from committing violations of the FDCA.  The proposed consent decree has been filed with the court and is awaiting judicial approval.

“Failing to maintain appropriate controls in food-producing animals bound for slaughter jeopardizes the public health,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The resolution of this matter ensures that, should it choose to re-enter business, this farm will have the necessary procedures in place to ensure that it delivers safe food to consumers.”

The defendants are primarily in the dairy business, but also sell cows for slaughter as food.  Government inspections as recently as June 2014 revealed that Ferry sold animals for slaughter containing excessive and illegal drug residues in their edible tissues.  The inspections also revealed that the defendants failed to maintain complete records concerning the medication of their animals.  The FDA issued a warning letter to the farm concerning its violations in 2011 and also held a regulatory meeting with the farm in 2013 to discuss unlawful residues found in its cattle.  The complaint states that consumers of edible animal tissues who are susceptible to antibiotics may experience severe allergic reactions as a result of ingesting food containing out-of-tolerance antibiotic levels.  Furthermore, food containing above-tolerance antibiotic levels contributes to the development of antibiotic-resistant strains of bacteria in those who eat or handle food containing residues of such drugs.

Under the consent decree, the defendants have agreed to shutter their business selling animals for slaughter.  To resume selling cows for slaughter, the consent decree requires the defendants to take certain actions and institute measures that must be confirmed by the FDA as compliant.

This matter was handled by Trial Attorney David Sullivan of the Civil Division’s Consumer Protection Branch and Scott Kaplan of the FDA’s Office of the Chief Counsel.

The Department of Justice filed a statement of interest today in the Middle District of Georgia in Diamond v. Owens, et al.  The plaintiff in that case, a transgender prisoner, alleges that the Georgia Department of Corrections failed to provide adequate care for her gender dysphoria.  The statement of interest discusses the unconstitutionality of “freeze-frame” policies, such as the policy allegedly used in the Georgia Department of Corrections.  These policies unconstitutionally prohibit treatment beyond the type of care the prisoner received in the community prior to incarceration.  Through this filing, without taking a position on the merits of the allegations, the United States stated that the Eighth Amendment mandates individualized assessment and care for gender dysphoria.

“By taking action in this case, the Justice Department is reminding departments of corrections that prison officials have the obligation to assess and treat gender dysphoria just as they would any other medical or mental health condition,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “Prisoners with gender dysphoria should not be forced to suffer needlessly during their incarceration simply because they were not receiving care, or could not prove they were receiving care, in the community.  Freeze-frame policies can have serious consequences to the health and well-being of transgender prisoners, who are among the most vulnerable populations incarcerated in our nation’s prisons and jails.”

Based on the facts as alleged, Ashley Diamond was first diagnosed with gender dysphoria as a teenager, nearly twenty years ago.  She began taking feminizing hormones, which helped her develop secondary sex characteristics and helped ease the significant physical and emotional discomfort she felt with her biological sex.  Yet, when she entered the Georgia Department of Corrections, she was not identified or referred for continuation of this treatment.  Instead, her hormone therapy was terminated and she was placed in a secure prison for men. 

When Ms. Diamond requested treatment during her incarceration, she was evaluated by Department medical personnel who confirmed Diamond’s gender dysphoria and recommended reinstatement of hormone therapy and other clinically-indicated treatments.  However, department officials continued to deny this treatment, telling Diamond that she was ineligible for treatment pursuant to the department’s policy.  Because the department did not properly identify Diamond’s gender dysphoria at intake and refer her for treatment at that time, she was, and continues to be, denied necessary medical care.  

The facts alleged in this case indicate that the Department of Corrections relied on its freeze-frame policy to deny Diamond the care recommended by the department’s own physicians, in violation of the Eighth Amendment.  As stated by the Justice Department in its filing, “[t]wo things are clear from the record in this case: one, the generally accepted standards for treatment of gender dysphoria require treatment decisions be individualized; and two, Ms. Diamond did not receive individualized care.”

Diamond v. Owens, et al. was filed in February 2015.

Defendants Allegedly Plotted to Construct an Explosive Device for Use in a Terrorist Attack on U.S. Soil

U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Attorney General for National Security John P. Carlin, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department (NYPD) announced that earlier today, a criminal complaint was unsealed in federal court in the Eastern District of New York charging Noelle Velentzas and Asia Siddiqui with conspiracy to use weapons of mass destruction against persons or property in the United States.  The defendants’ initial appearances are scheduled for this afternoon before U.S. Magistrate Judge Viktor V. Pohorelsky of the Eastern District of New York.

As alleged in the complaint, the defendants have repeatedly expressed their support for violent jihad.  For instance, in or about 2009, Siddiqui published a poem in a magazine published by al-Qaeda in the Arabian Peninsula that exhorted readers to wage jihad and declared that there is “[n]o excuse to sit back and wait – for the skies rain martyrdom.”  More recently, Velentzas, who has characterized al-Qaeda founder Usama Bin Laden as one of her heroes, declared that she and Siddiqui are “citizens of the Islamic State” – a reference to the foreign terrorist organization that is also known as Islamic State in Iraq and the Levant (ISIL).  Less than two weeks ago, Velentzas, asked whether she had heard the news about the recent arrest of a former U.S. airman who had attempted to travel to Syria to wage jihad and stated that she did not understand why people were traveling overseas to engage in jihad when there were more opportunities of “pleasing Allah” in the United States.

Since at least August 2014, the defendants have allegedly plotted to construct an explosive device for use in a terrorist attack on American soil.  In their self-proclaimed effort to “make history,” the defendants researched numerous explosive precursors.  For instance, they researched and acquired some of the components of a car bomb, like the one used in the 1993 World Trade Center bombing; a fertilizer bomb, like the one used in the 1995 bombing of the federal building in Oklahoma City; and a pressure cooker bomb, like the one used in the 2013 Boston Marathon bombing.  The investigation recently revealed that the defendants possessed propane gas tanks together with instructions from an online jihadist publication for transforming propane tanks into explosive devices.

“We are committed to doing everything in our ability to detect, disrupt and deter attacks by homegrown violent extremists,” said U.S. Attorney Lynch.  “As alleged, the defendants in this case carefully studied how to construct an explosive device to launch an attack on the homeland.  We remain firm in our resolve to hold accountable anyone who would seek to terrorize the American people, whether by traveling abroad to commit attacks overseas or by plotting here at home.”  U.S. Attorney Lynch extended her grateful appreciation to the FBI’s Joint Terrorism Task Force, which comprises a large number of federal, state and local agencies from the region, as well as to the NYPD Intelligence Division, for their assistance in the investigation.

“Velentzas and Siddiqui are alleged to have researched how to construct bombs as part of their conspiracy to use a weapon of mass destruction on American soil,” said Assistant Attorney General Carlin.  “Identifying and disrupting such threats to public safety, whether at home or abroad, is the number one priority of the National Security Division and our partners in the law enforcement and intelligence communities.  I want to thank the agents, analysts and prosecutors who are responsible for today’s charges.”

“The defendants allegedly plotted to wreak terror by creating explosive devices and even researching the pressure cooker bombs used during the Boston Marathon bombing,” said Assistant Director in Charge Rodriguez.  “We continue to pursue those who look to commit acts of terror and deter others who think they are beyond the reach of law enforcement.  I’d like to thank Commissioner Bratton and the New York City Police Department for their partnership on this case and so many others.”

“These defendants allegedly engaged in sustained efforts to obtain bomb-making instructions and materials, including using instructions provided by al-Qaeda’s online magazine,” said Commissioner Bratton.  “The work of the NYPD’s Intelligence Bureau, its undercover Detective, and the seamless collaboration with the Special Agents and Detectives of the Joint Terrorism Task Force and United States Attorney for the Eastern District should serve as a model for early detection and prevention of terrorist plotting.”

If convicted, both defendants face a maximum sentence of life imprisonment.  The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by Assistant U.S. Attorneys Alexander A. Solomon, Douglas M. Pravda and Jennifer S. Carapiet of the Eastern District of New York, with assistance provided by Trial Attorney Clement McGovern of the Justice Department’s National Security Division.

Velentzas and Siddiqui Complaint

Velentzas Order to Unseal

The Justice Department announced today that Medtronic plc and affiliated Medtronic companies, Medtronic Inc., Medtronic USA Inc., and Medtronic Sofamor Danek USA Inc., have agreed to pay $4.41 million to the United States to resolve allegations that they violated the False Claims Act by making false statements to the U.S. Department of Veterans Affairs (VA) and the U.S. Department of Defense (DoD) regarding the country of origin of certain Medtronic products sold to the United States. 

“Today’s settlement demonstrates our commitment to ensure that our service members and our veterans receive medical products that are manufactured in the United States and other countries that trade fairly with us,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Justice Department will take action to hold medical device companies to the terms of their government contracts.”

“Domestic manufacture is a required component of many military and Veterans Administration contracts,” said U.S. Attorney Andrew M. Luger of the District of Minnesota.  “Congress has mandated that the United States use its purchasing power to buy goods made in the United States or in designated countries.  We take that mandate seriously and will not hesitate to take appropriate legal action to ensure compliance.” 

According to the settlement agreement, between 2007 and 2014, Medtronic sold to the VA and DoD products it certified would be made in the United States or other designated countries.  The Trade Agreements Act of 1979 (TAA) generally requires companies selling products to the United States to manufacture them in the United States or in another designated country.  The United States alleged that Medtronic sold to the United States products manufactured in China and Malaysia, which are prohibited countries under the TAA.

The specific Medtronic products at issue included anchoring sleeves sold with cardiac leads and used to secure the leads to patients, certain instruments and devices used in spine surgeries, and a handheld patient assistant used with a wireless cardiac device.  The agreement covers the period from Jan. 1, 2007, to Dec. 31, 2013, and for one device (the handheld patient assistant), the period from Jan. 1, 2014, to Sept. 30, 2014.

The settlement resolves allegations originally brought in a lawsuit filed by three whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and share in any recovery. The relators will receive a total of $749,700 of the recovered funds. 

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 $23.9 billion through False Claims Act cases, with more than $15.2 billion of that amount recovered in cases involving fraud against federal health care programs.

The case was handled by the U.S. Attorney’s Office of the District of Minnesota with assistance from the Civil Division, DoD, Defense Logistics Agency and Defense Criminal Investigative Service and the VA’s Office of General Counsel.

The underlying case is United States of America ex rel. Samuel Adam Cox, III, Meayna Phanthavong, and Sonia Adams v. Medtronic, Inc., Medtronic USA, Inc., and Medtronic Sofamor Danek USA, Inc., Civil No. 12-cv-2562 (PAM/JSM).

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

Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division and U.S. Attorney Carmen M. Ortiz of the District of Massachusetts announced today that the Justice Department has entered into a settlement agreement with edX Inc. (edX), to remedy alleged violations of the Americans with Disabilities Act (ADA).  The agreement resolves the department’s allegations that edX’s website, www.edx.org, and its platform for providing massive open online courses (MOOCs), were not fully accessible to individuals with disabilities, including individuals who are blind or have low vision, individuals who are deaf or hard of hearing and individuals who have physical disabilities affecting manual dexterity, in violation of Title III of the ADA.

edX was created by the Massachusetts Institute of Technology (MIT) and Harvard University in 2012 as a nonprofit platform for select universities to offer MOOCs to the world.  The consortium’s 36 charter members include Berkeley, Georgetown, Dartmouth, Caltech, the Sorbonne and Peking University, in addition to Harvard and MIT.  Today, edX has approximately 60 university and institutional members providing over 450 courses to over 3,000,000 learners.  The courses are offered largely for free in subject matters as varied as business, computer sciences, hard sciences, food and nutrition and social sciences.

Today’s agreement requires edX to make significant modifications to its website, platform and mobile applications to conform to the Web Content Accessibility Guidelines (WCAG) 2.0 AA, which are industry guidelines for making web content accessible to users with disabilities.  Under the agreement edX will also provide guidance and authoring tools to the entities that create and post courses on www.edx.org, many of which are independently covered by the ADA, to assist them in creating accessible course content.  Because edX makes its software code freely available, any modifications to that code under this agreement will enable other MOOC providers to enhance the accessibility of their online offerings.

The four-year agreement requires edX to:

• make the edX website, its mobile applications, and learning management system software, through which online courses are offered, fully accessible within 18 months;
• ensure that its content management system, called Studio, which edX makes available to entities creating online courses, is fully accessible and supports authoring and publishing of accessible content within an additional 18 months;
• provide guidance to course creators at its member universities and other institutions on best practices for making online courses fully accessible;
• appoint a Web Accessibility Coordinator;
• adopt a Web Accessibility Policy;
• solicit feedback from learners on the accessibility of the courses;
• conduct Web Accessibility Training for employees responsible for the website, platform, and mobile applications; and
• retain a consultant to evaluate conformance of the website, platform, and mobile applications.

“Massive open online courses have the potential to increase access to high-quality education for people facing income, distance, and other barriers, but only if they are truly open to everyone,” said Acting Assistant Attorney General Gupta.  “This landmark agreement is far-reaching in ensuring that individuals with disabilities will have an equal opportunity to independently and conveniently access quality higher education online.  edX is to be commended for working with the Justice Department to take such steps.”  

“Critical portions of education are moving online, in tandem with the rest of our social experience,” said U.S. Attorney Ortiz.  “This new, educational online world readily can, and should be, built from the outset in a way that does not discriminate against those with disabilities.”

Title III of the ADA prohibits discrimination on the basis of disability by public accommodations in the full and equal enjoyment of the goods, services, facilities, privileges, advantages and accommodations of places of public accommodations.  Title III of the ADA also requires public accommodations to take necessary steps to ensure individuals with disabilities are not excluded, denied services, segregated or otherwise treated differently because of the absence of auxiliary aids and services, such as accurate captioning of audible materials and labeling of visual materials.  The Justice Department has long considered Title III and its implementing regulation to apply to the online services and communications of public accommodations.

To find out more about federal disability rights laws, call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov.  ADA complaints, including those involving the inaccessibility of www.edx.org, may be filed by email to ada.complaint@usdoj.gov.

edX Settlement Agreement

A former trader at ConvergEx Global Markets Limited (CGM Limited) pleaded guilty this morning in federal court in New Jersey for his role in a scheme to falsify the books and records of a registered U.S. broker-dealer. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office and Inspector in Charge Philip R. Bartlett of the U.S. Postal Inspection Service (USPIS) made the announcement.

Michael Craig Marshall, 47, of Bermuda, pleaded guilty before U.S. District Judge Jose L. Linares of the District of New Jersey, to one count of conspiracy to falsify the books and records of a broker-dealer.

According to court documents, CGM Limited and G-Trade Services, LLC (G-Trade) were both wholly owned subsidiaries of ConvergEx Group LLC (ConvergEx Group).  G-Trade was a registered U.S. broker-dealer.  As part of his plea today, Marshall admitted that clients placed orders to buy or sell securities with G-Trade, and G-Trade then routed the orders to CGM Limited.  Marshall further admitted that traders at CGM Limited regularly added a mark-up (an additional amount paid for the purchase of a security) or mark-down (a reduction of the amount received for the sale of a security) when executing the orders.  Employees of CGM Limited, G-Trade and other ConvergEx Group entities referred to mark-ups and mark-downs as “spread,” “trading profits” or “TP.” 

At his plea hearing today, Marshall admitted that he and the other coconspirators falsified G-Trade’s books and records.  In particular, Marshall admitted that he reviewed falsified transaction reports for two trades executed in August 2009 to verify that the falsified data regarding the quantities, prices and times of the purchases reflected on the report matched actual trades that had been executed on the market on Aug. 7, 2009, by both G-Trade’s client and other market participants.  The reports hid the fact that spread had been taken on the brokerage orders, Marshall admitted.  These reports were later provided to G-Trade’s client.

On Dec. 18, 2013, Jonathan Daspin, the head trader at CGM Limited, Thomas Lekargeren, a sales trader at a different ConvergEx subsidiary, and CGM Limited each pleaded guilty to conspiracy to commit securities and wire fraud.  On the same day, ConvergEx Group entered into a deferred prosecution agreement.  Collectively, the two ConvergEx entities paid $43.8 million in criminal penalties and restitution.

The case is being investigated by the FBI’s Washington Field Office and the USPIS offices in Washington, D.C. and New York.  The case is being prosecuted by Senior Trial Attorneys Jason Linder and Patrick Pericak of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Leslie Schwartz of the District of New Jersey.  Fraud Section Assistant Chief Robert Zink and Trial Attorney Justin Goodyear also assisted with the investigation.  The Department appreciates the substantial assistance of the Securities and Exchange Commission.

Defendant Allegedly Supported a Conspiracy to Kill Americans and Carry Out Attacks Against U.S. Military

U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Attorney General for National Security John P. Carlin, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department (NYPD) announced that a complaint and arrest warrant were unsealed today in federal court in the Eastern District of New York charging Muhanad Mahmoud Al Farekh, an American citizen, with conspiracy to provide material support to terrorists.  Farekh’s initial appearance is scheduled today before U.S. Magistrate Judge Viktor V. Pohorelsky of the Eastern District of New York.  Farekh was deported from Pakistan to the United States and arrested pursuant to the pending warrant.

As alleged in the complaint, Farekh conspired with others to provide material support to terrorists and specifically to provide personnel to be used in support of efforts to kill American citizens and members of the U.S. military abroad.  In approximately 2007, Farekh, an individual named Ferid Imam and a third co-conspirator departed Canada for Pakistan with the intention of fighting against American forces.  They did not inform their families of their plan before departing, but called a friend in Canada upon arrival to let him know that he should not expect to hear from them again because they intended to become martyrs.  According to public testimony in previous criminal trials in the Eastern District of New York, in approximately September 2008, Ferid Imam provided weapons and other military-type training at an al-Qaeda training camp in Pakistan to three individuals – Najibullah Zazi, Zarein Ahmedzay and Adis Medunjanin – who intended to return to the United States to conduct a suicide attack on the New York City subway system.  Zazi and Ahmedzay pleaded guilty pursuant to cooperation agreements and have yet to be sentenced; Medunjanin was convicted after trial and sentenced to life imprisonment.  Ferid Imam has also been indicted for his role in the plot. 

“Today’s arrest demonstrates that there is no escape from the long reach of our law for American citizens who seek to do harm to our country on behalf of violent terrorist,” said U.S. Attorney Lynch.  “We will continue to use every tool at our disposal to bring such individuals to justice.”

“Muhanad Mahmoud Al Farekh is alleged to have conspired with others to provide material support to terrorists,” said Assistant Attorney General Carlin.  “Counterterrorism is the highest priority of the National Security Division, and we will continue to be tireless in our pursuit of those who wish to harm the United States or its people.  I would like to thank the many agents, analysts and prosecutors who are responsible for the charges in this case.”           

“Al Farekh allegedly provided material support to terrorists with every intention of becoming a martyr,” said Assistant Director in Charge Rodriguez.  “Today members of our military are safer because of the relentless investigative work by the FBI’s Manhattan-based Joint Terrorism Task Force.”

“The NYPD will continue to work with our law enforcement partners to investigate and arrest individuals who choose to work alongside terrorist organizations and threaten the lives of Americans,” said Commissioner Bratton.  “We applaud the investigators and prosecutors whose efforts led to this arrest.”       

If convicted, the defendant faces a maximum sentence of 15 years’ imprisonment.                

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

The government’s case is being prosecuted by Assistant U.S. Attorneys Zainab Ahmad and Richard M. Tucker of the Eastern District of New York, with assistance provided by Trial Attorney Bridget Behling of the Justice Department’s National Security Division.

Farekh Complaint

An indictment was unsealed yesterday in the U.S. District Court in the District of Columbia that charges a Washington, D.C., Metropolitan Police Department (MPD) officer with obstructing and impeding the Internal Revenue Service (IRS) and evading his federal income taxes for 2009 and 2010, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

According to the indictment, Jamal A. Adams, also known as Ishmeal Heru-Bey, failed to file federal income tax returns for 2005 through 2012 while he was employed as a MPD officer and earning income.  During this time period, Adams submitted IRS forms falsely claiming to be exempt from federal income tax withholding to the MPD.  In 2010, he filed false documents signed under the penalties of perjury with the U.S. Bankruptcy Court for the District of Columbia in which he failed to report the tax debts that he owed to the IRS.

If convicted, Adams faces a total statutory maximum sentence of 13 years in prison, plus a fine of up to $250,000 per count of conviction.

Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Jeffrey McLellan and Erin Pulice of the Tax Division, who are prosecuting the case.

The charges contained in the indictment are only allegations.  A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

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

Six individuals were charged today in connection with their involvement in an armed robbery crew that conducted home invasion robberies in Michigan and Texas, principally targeting victims of Indian and Asian ancestry.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Division, Acting Special Agent in Charge Katherine J. Greer of U.S. Immigration and Customs Enforcement’s Homeland Security Investigation’s (ICE-HSI) Dallas Field Office, Chief John Seto of the Ann Arbor, Michigan, Police Department, Sheriff Jerry L. Clayton of the Washentaw County, Michigan, Sheriff’s Department and Director Todd L. Mutchler of Canton, Michigan, Public Safety made the announcement.  

“The armed robberies allegedly committed by this organized criminal group were horrific home invasions that spread fear through Asian and Indian communities across multiple states,” said Assistant Attorney General Caldwell.  “This indictment is the first step in holding responsible those accused of carrying out armed robberies that were both life threatening and ethnically targeted.”

“As alleged in the indictment, these defendants used online research to target their victims from a distance, traveled to their homes, and then carried out the robberies while the victims were at home,” said U.S. Attorney McQuade.  “The defendants either broke in or used a female decoy to knock, luring victims to open the door.  Once the door was open, the robbers would charge inside with guns and threats of violence, round up all the adults and children into one room, and bind them with duct tape before ransacking the house and stealing valuables.  We are grateful for the outstanding work of federal, state and local law enforcement in various jurisdictions to connect the dots and put this case together.”

“This multistate investigation serves as an example of the successful collaboration between federal, state and local law enforcement to bring justice to bear upon those who have wreaked havoc upon our neighborhoods and victimized families in their own homes,” said Special Agent in Charge Abbate.  “Combating violent crime is among the highest of priorities for the FBI.  There is nothing more important than protecting our communities and keeping law abiding citizens safe in their own homes.  The FBI, along with our law enforcement partners, will maintain its resolve and continue the fight against violent criminal offenders.”

Chaka LeChar Castro, 40, Juan Olaya, 35, and Octavius Scott, 22, all of Houston,  and Jakeyra Augustus, 21, of La Marque, Texas, are each charged with engaging in a RICO conspiracy, four counts of assault with a dangerous weapon in aid of racketeering, and four counts of use and carrying of a firearm in furtherance of a crime of violence.  Rodney Granger, 19, and Johnisha Williams, 19, both of Houston, are each charged with engaging in a RICO conspiracy.  All of the defendants are currently in custody.

According to the indictment, the defendants committed four armed home invasion robberies in the greater Ann Arbor area over the Thanksgiving weekend in 2014, as well as additional armed robberies in the greater Dallas area in early December 2014.  The crews allegedly utilized a similar modus operandi in each of the robberies.  According to the indictment, they typically used female decoys to knock on the victims’ doors and gain entry, or they merely forced entry themselves.  Once inside, members of the robbery crew—disguised with bandanas and masks—allegedly brandished firearms to gain control of their victims, including children, and then forced them at gunpoint into a single room of the home.  Some members of the crew were allegedly assigned to bind the victims with duct tape, or otherwise maintain control over them.  At the same time, other members of the crew allegedly ransacked the homes in search of cash, jewelry and electronics.

According to allegations in the indictment, Castro was the leader of the enterprise.  In that capacity, she allegedly coordinated with Olaya to generate lists of robbery targets by conducting research on the Internet, among other methods, to identify families of Asian and Indian ancestry.  Castro then assigned crews to carry out the armed robberies of these targeted families.  Olaya allegedly led the robberies themselves, and Scott, Augustus, Granger and Williams were allegedly members of the robbery crew.

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

The case was investigated by a collaboration of local, state and federal law enforcement in Michigan and Texas, including the FBI, ICE-HSI, Washtenaw County Sheriff’s Office, the Ann Arbor Police Department and the Canton Police Department.  The case is being prosecuted by Trial Attorney Kelly Pearson of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Douglas C. Salzenstein of the Eastern District of Michigan.

Castro Indictment

Robert Menendez, a U.S. Senator, and Salomon Melgen, a Florida ophthalmologist, were indicted today in connection with a bribery scheme in which Menendez allegedly accepted gifts from Melgen in exchange for using the power of his Senate office to benefit Melgen’s financial and personal interests, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division.

“Government corruption – at any level of elected office – corrodes the public trust and weakens our democratic system,” said Assistant Attorney General Caldwell.  “It is the fundamental responsibility of the Department of Justice to hold public officials accountable by conducting thorough investigations and seeking an indictment when the facts and the law support it.”

“The job of an elected official is to serve the people,” said Special Agent in Charge Frankel.  “The citizens of New Jersey have the right to demand honest, unbiased service and representation from their elected officials at all levels of government.  The charges and activity alleged in this indictment are another example of the FBI's commitment to aggressively and tenaciously pursue public corruption in the state of New Jersey.”

Menendez, 61, of Paramus, New Jersey, and Melgen, 60, of Palm Beach, Florida, were indicted in the District of New Jersey for one count of conspiracy, one count of violating the travel act, eight counts of bribery and three counts of honest services fraud.  Menendez was also charged with one count of making false statements.

According to allegations in the indictment, between January 2006 and January 2013, Menendez accepted close to $1 million worth of lavish gifts and campaign contributions from Melgen in exchange for using the power of his Senate office to influence the outcome of ongoing contractual and Medicare billing disputes worth tens of millions of dollars to Melgen and to support the visa applications of several of Melgen’s girlfriends. 

Specifically, the indictment alleges that, among other gifts, Menendez accepted flights on Melgen’s private jet, a first-class commercial flight and a flight on a chartered jet; numerous vacations at Melgen’s Caribbean villa in the Dominican Republic and at a hotel room in Paris; and $40,000 in contributions to his legal defense fund and over $750,000 in campaign contributions.  Menendez never disclosed any of the reportable gifts that he received from Melgen on his financial disclosure forms.   

According to allegations in the indictment, during this same time period, Menendez allegedly engaged in three efforts to use his Senate office and staff to advocate on behalf of Melgen’s personal and financial interests.  First, Menendez allegedly pressured executive agencies in connection with a conflict between Melgen and the government of the Dominican Republic relating to a disputed contract that Melgen purchased to provide exclusive screening of containers coming through Dominican ports.  Second, Menendez allegedly advocated on behalf of Melgen in connection with a Medicare billing dispute worth approximately $8.9 million to Melgen.  Third, Menendez allegedly took active steps to support the tourist and student visa applications of three of Melgen’s girlfriends, as well as the visa application of the younger sister of one of Melgen’s girlfriends.  Throughout these efforts, Menendez allegedly engaged in advocacy for Melgen all the way up to the highest levels of the U.S. government, including meeting with a U.S. cabinet secretary, contacting a U.S. Ambassador, meeting with the heads of executive agencies and other senior executive officials and soliciting other U.S. Senators, all in order to assist Melgen’s personal and pecuniary interests. 

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

The case is being investigated by the FBI.  The case is being prosecuted by Deputy Chiefs Peter Koski and J.P. Cooney, and Trial Attorney Monique Abrishami of the Criminal Division’s Public Integrity Section. 

Menendez and Melgen Indictment

Justice Department spokeswoman Dena Iverson released the following statement today regarding the latest visit to Ferguson, Missouri, by Justice Department officials: 

“Members of the Civil Rights Division of the Department of Justice have completed three days of meetings in Ferguson, Missouri, with a broad variety of individuals and community groups regarding the department’s findings in the investigation of the Ferguson Police Department and the next steps for institutional reform.  The meetings generated thoughtful and constructive recommendations for changes to address the unconstitutional practices identified by the investigation.  Community members were overwhelmingly committed to assist in the effort to achieve meaningful police and court reform as quickly as possible.  In the coming weeks, department officials will continue to meet with these and other individuals, including Ferguson police officers, to solicit ideas for potential solutions.  

“As department officials with the Civil Rights Division explained to the community groups and individuals with whom they met, the division looks forward to meeting in the coming weeks with Ferguson city leaders to begin to work collaboratively towards sustainable reform in the form of a court enforceable consent decree to achieve the necessary changes.  If the city agrees to this process, the Department of Justice stands ready to meet with the city to begin negotiations.  If the city does not agree to negotiate a consent decree, the Department of Justice retains the option of filing suit to ensure that the unconstitutional practices identified in our findings are remedied.

“During the meetings with community members and organizations, department officials saw a high level of constructive engagement, thoughtfulness and dedication to meaningful improvement of Ferguson’s police and court system.  The department encourages the city to work with these well-intentioned and creative individuals and groups.”

Identities Stolen from the U.S. Army, Various Alabama State Agencies and Georgia Call Center

Alabama and Georgia residents pleaded guilty for their roles in a $20 million stolen identity refund fraud (SIRF) conspiracy, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama announced today.

The defendants pleaded guilty on the following dates to the following charges:

• Talarius Paige on March 31, to one count of conspiracy to file false claims and one count of aggravated identity theft;

• Tracy Mitchell on March 30, to one count of conspiracy to file false claims, one count of wire fraud and one count of aggravated identity theft;

• Latasha Mitchell on March 30, to one count of conspiracy to file false claims and one count of aggravated identity theft;

• Demeisha Mitchell on March 26, to one count of conspiracy to file false claims and one count of aggravated identity theft;

• Keisha Lanier on March 5, to one count of wire fraud and one count of aggravated identity theft;

• Sharondra Johnson on Feb. 17, to one count of conspiracy to file false claims;

• Cynthia Johnson on Dec. 17, 2014, to one count of conspiracy to file false claims; and

• Patrice Taylor on July 18, 2014, to one count of conspiracy to file false claims. 

The defendants are scheduled to be sentenced on June 30.  Mequetta Snell-Quick, another co-conspirator, is scheduled to appear in court on April 6.  In a related case, on Oct. 2, 2014, Tamika Floyd pleaded guilty to one count of conspiracy to file false claims and one count of aggravated identity theft and is scheduled to be sentenced on May 19.  The defendants each face a statutory maximum sentence of 10 years in prison for each count of conspiracy to file false claims, a statutory maximum sentence of 20 years in prison for each wire fraud count, and a statutory mandatory minimum sentence of two years in prison for each aggravated identity theft count. 

“The guilty pleas of the nine defendants who participated in this conspiracy send a clear message that the Tax Division, along with its law enforcement partners, will vigorously pursue and prosecute individuals involved at every level of these extensive criminal schemes,” stated Acting Assistant Attorney General Ciraolo.  “The division will seek significant jail time and restitution from offenders who choose to victimize unsuspecting American taxpayers, including the dedicated men and women serving in the U.S. military, and steal from the U.S. Treasury.”

“Stealing a person’s identity is a horrendous crime,” said U.S. Attorney Beck.  “It can take months or years for a victim of identity theft to correct the damage that these criminals reaped upon him or her.  But these defendants stole identities from military men and women who have volunteered to protect our country.  That is inexcusable and will not be tolerated.”

According to court documents, between January 2011 and December 2013, the defendants ran a large-scale identity theft ring in which they filed more than 7,000 false tax returns that included fraudulent claims for refunds in excess of $20 million.  In order to file false returns, the defendants obtained stolen identities from various sources.  Tracy Mitchell worked at a military hospital located at Fort Benning, Georgia, and as a hospital employee, she had access to the identification data of military personnel, including soldiers who were deployed to Afghanistan.  Tracy Mitchell stole soldiers’ personal information and used that information to file false tax returns.

“This case is an excellent example of Army CID working shoulder-to-shoulder with our fellow law enforcement partners to protect the nation’s soldiers,” said Director Daniel Andrews of the U.S. Army Criminal Investigation Command’s (CID) Computer Crime Investigative Unit.  “It demonstrates our vigilance against cybercrime and an unswerving commitment to dismantle criminal operations impacting the U.S. Army.”

Floyd stole personal information from two Alabama state agencies and provided those names to Lanier.  Lanier provided those names to Tracy Mitchell, Latasha Mitchell, Paige and others for use in filing false tax returns.  Lanier also obtained stolen identities from the Alabama Department of Corrections that were then used to file false tax returns.  Also, Paige and Taylor worked in a call center for a Columbus, Georgia, company and stole identities from that company.  Paige, in turn, used those identities to file false tax returns and filed some of the returns from Tracy Mitchell’s residence.

In order to file the false tax returns, Floyd applied for and obtained several Electronic Filing Numbers (EFINs) from the Internal Revenue Service (IRS) in the names of sham tax businesses.  The tax refunds claimed on the false returns were paid via U.S. Treasury checks mailed to addresses under the control of participants in the scheme, prepaid debit cards issued by financial institutions, and deposits to financial institutions connected to the business EFINs so that the defendants could print refund checks. 

The defendants cashed the tax refund checks at several businesses located in Alabama, Georgia and Kentucky.  Sharondra Johnson worked at the Walmart money center in Columbus, Georgia, and as part of her employment, she cashed checks for customers of the money center.  Demeisha Mitchell approached Sharondra Johnson about cashing tax refund checks issued in the names of other individuals.  Sharondra Johnson agreed to cash these refund checks and was paid a fee for her role in the scheme. 

“Taking advantage of innocent citizens, especially service members and their families, is disgraceful,” said Chief Richard Weber of IRS Criminal Investigation (CI).  “IRS Criminal Investigation is committed to stopping those who would prey on others by stealing their identities.  As criminals continue to become more sophisticated, we will continue to work with our law enforcement partners to bring them to justice.”

Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck Jr. commended special agents of IRS - CI and the U.S. Army – CID, who investigated the case, and Trial Attorneys Michael C. Boteler and Gregory P. Bailey of the Tax Division and Assistant U.S. Attorney Todd A. Brown of the Middle District of Alabama, for prosecuting the case.  Ciraolo and Beck Jr. also thanked the U.S. Attorney’s Office of the Middle District of Georgia for their assistance in the case.

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