District Not Recorded

The owner of a Miami home health care agency pleaded guilty today in connection with a $6.9 million Medicare fraud scheme. 

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

Orelvis Olivera, 45, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Robert N. Scola Jr. of the Southern District of Florida.  A sentencing hearing is scheduled for April 21, 2015.

According to his plea documents, Olivera was an owner and operator of Acclaim Home Healthcare Inc. (Acclaim Home Health), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.  Olivera admitted that he and his co-conspirators operated Acclaim Home Health for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary.

Olivera further admitted that he paid kickbacks and bribes to patient recruiters in exchange for patient referrals, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries.  Olivera admitted that he and his co-conspirators used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for home health care services.  

From May 2008 to September 2014, Acclaim Home Health billed Medicare approximately $6.9 million for fraudulent claims, and was paid approximately $5.7 million for the same. 

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  This case is being prosecuted by Trial Attorney Kelly Graves of the Criminal Division’s Fraud Section.  

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

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

ResCare Iowa Inc. has agreed to pay $5.63 million to the United States and the state of Iowa to resolve allegations that it violated the False Claims Act by submitting false home healthcare billings to the Medicare and Medicaid programs, the Department of Justice announced today.  ResCare Iowa – a subsidiary of Louisville, Kentucky, based ResCare Inc. – provides home healthcare services to patients in the state of Iowa.

“Home health agencies that bill Medicare and Medicaid must follow the rules,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “This settlement demonstrates the Department’s commitment to safeguarding taxpayer dollars and ensuring that they are used to provide medically necessary services to federal health care beneficiaries.”

The rules of both Medicare and the state of Iowa’s Medicaid program require an independent physician to certify that home healthcare services are medically necessary and to order the specific type and amount of healthcare services to be provided by the home health agency.  Additionally, since 2011, Medicare and Iowa Medicaid rules require these independent physicians to perform an in-person “face-to-face” assessment of each patient before the home health agency can bill the government for any home healthcare services.  The settlement resolves allegations that between 2009 and 2014, ResCare Iowa billed the government for services provided to Medicare and Medicaid patients in Iowa without documenting compliance with these requirements. 

“We commenced this investigation due to concerns that this provider was not complying with the rules and was not submitting accurate claims for payment,” said U.S. Attorney Kevin W. Techau of the Northern District of Iowa.  “When the government pays for home-based medical services, we are dedicated to ensuring the money is well spent and medically deserving patients receive the care to which they are entitled.”

“Home health care providers that receive Medicare and Medicaid funds must abide by rules designed to ensure taxpayer funds are spent properly and that patients receive the appropriate care,” said Special Agent in Charge Gerald T. Roy of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).  “We will continue to hold health care providers accountable for submitting improper claims.”

Medicaid is jointly funded by the states and the federal government.  The state of Iowa, which paid part of the Medicaid funds at issue, will receive $2.32 million of the settlement amount. 

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 $23.6 billion through False Claims Act cases, with more than $15.1 billion of that amount recovered in cases involving fraud against federal health care programs.

This settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the Northern District of Iowa, HHS-OIG and the Iowa Attorney General’s Office.  The claims settled by this agreement are allegations only, and there has been no determination of liability.

The former operator of the wireless technology company Distributive Networks LLC (Distributive Networks) pleaded guilty today in federal court to willfully failing to pay more than $900,000 in employment taxes, Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department’s Tax Division and the Internal Revenue Service (IRS) announced.

Kevin Bertram pleaded guilty to a criminal information filed in the U.S. District Court for the District of Columbia.  According to court documents, Bertram operated Distributive Networks from 2004 through 2010.  Distributive Networks was a wireless technology company located in the District of Columbia.

According to court documents, Bertram was responsible for Distributive Networks’ federal tax obligations and he failed to account for and pay employment taxes due and owed to the IRS.  From late-2007 through mid-2009, Bertram failed to file IRS Forms 941 (Employer’s Quarterly Federal Tax Returns) and failed to pay $927,922 in employment taxes that he had withheld from his employees’ wages.  These taxes included federal income, social security and Medicare taxes that the company was required to withhold from its employees’ wages, as well as the company’s portion of social security and Medicare taxes.

As a condition of the plea agreement, Bertram is required to make restitution to the IRS.  Bertram also faces a statutory maximum sentence of five years in prison and a maximum fine of $250,000.  U.S. District Court Judge Amy Berman Jackson set sentencing for May 5.

The case was investigated by special agents from IRS-Criminal Investigation and prosecuted by Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan of the Tax Division.

The U.S. District Court for the Northern District of California entered a consent decree of permanent injunction against Fong Kee Tofu Co. Inc., Yan Hui Fong, the firm’s co-owner and chief executive officer, and Jen Ying Fong and Suny Fong, co-owners and corporate officers, to prevent the distribution of adulterated tofu and other soy food products, the Department of Justice announced today.

The department filed a complaint in the Northern District of California on Jan. 23 at the request of the U.S. Food and Drug Administration (FDA).  The complaint alleges that the defendants have a history of processing soy food products under insanitary conditions.  As detailed in the complaint, the company receives, prepares, processes, manufactures, labels, packs, holds and distributes soy food products including soy drinks, firm tofu, soft tofu, fried tofu balls (oil bean cake) and soybean cake.  The complaint also alleges that Yan Hui Fong, Suny Fong and Jen Yin Fong are Fong Kee Tofu’s corporate officers with the authority and responsibility for preventing and correcting violations of federal law at the company. 

In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and to be bound by a permanent injunction that requires Fong Kee Tofu to cease all operations and requires that if the defendants wish to resume manufacturing and distributing food in the future, the FDA first must determine that the firm’s manufacturing practices have come into compliance with the law. 

“Fong Kee Tofu was repeatedly informed that the sanitation practices at its facility were deficient,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “The failure to make sure that its facility was operating under sanitary conditions could be a serious risk to the public health and needed to be remedied.”

According to the complaint, FDA inspectors in 2014 observed pigeons on top of plastic-wrapped raw soybean pallets and they observed insects flying around the area used to process firm tofu.  The complaint further alleges that employees were observed using utensils that had not been properly sanitized in food production and packing tofu without washing or sanitizing their hands after coming into contact with insanitary objects.  In addition, according to the complaint, residue was observed on equipment used in processing tofu even after the equipment had been cleaned.  Under federal law, food manufacturers are required to comply with current good manufacturing practices to ensure that all food distributed into interstate commerce is not adulterated. 

The government is represented by Counsel Melanie Singh of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Enforcement Deeona Gaskin of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division. 

Attorney General Eric Holder released the following statement on the resignation of U.S. Attorney Tim Purdon:

“Tim Purdon has been an outstanding United States Attorney, a fierce advocate for the people of North Dakota and a strong national leader whose efforts to improve public safety in Indian Country have made a profound difference – and touched countless lives,” said Attorney General Eric Holder.  “Throughout his tenure, Tim has distinguished himself as a skilled attorney and a consummate public servant, rising to challenges as diverse as human trafficking, violent crime, drug trafficking and fraud.  His work to forge close partnerships with tribal leaders – and to develop and implement an Anti-Violence Strategy for Indian Country – have provided a model for success, increased federal prosecutions on North Dakota’s reservations and laid a strong foundation on which future efforts can be built.  His exceptional leadership and wise counsel at the national level – advising me and other Justice Department officials as Chair of the Native American Issues Subcommittee – have had an important and enduring impact.  And although we are all sorry to see him go, I am proud to join Tim’s dedicated colleagues in thanking him for his exemplary service as United States Attorney, and wishing him all the best as he begins a new chapter in his career.”

The Justice Department announced today that under its settlements with five of the nation’s largest mortgage servicers, 952 service members and their co-borrowers are eligible to receive over $123 million for non-judicial foreclosures that violated the Servicemembers Civil Relief Act (SCRA).  The five mortgage servicers are JP Morgan Chase Bank N.A. (JP Morgan Chase); Wells Fargo Bank N.A. and Wells Fargo & Co. (Wells Fargo); Citi Residential Lending Inc., Citibank, NA and CitiMortgage Inc. (Citi); GMAC Mortgage, LLC, Ally Financial Inc. and Residential Capital LLC (GMAC Mortgage); and BAC Home Loans Servicing LP formerly known as Countrywide Home Loans Servicing LP (Bank of America).

In the first round of payments under the SCRA portion of the 2012 settlement known as the National Mortgage Settlement (NMS), 666 service members and their co-borrowers will receive over $88 million from JP Morgan Chase, Wells Fargo, Citi and GMAC Mortgage.  The other 286 service members and their co-borrowers are receiving over $35 million from Bank of America through an earlier settlement.  The non-judicial foreclosures at issue took place between Jan. 1, 2006, and Apr. 4, 2012.

“These unlawful judicial foreclosures forced hundreds of service members and their families out of their homes,” said Acting Associate Attorney General Stuart F. Delery.  “While this compensation will provide a measure of relief, the fact is that service members should never have to worry about losing their home to an illegal foreclosure while they are serving our country.  The department will continue to actively protect our service members and their families from such unjust actions.”

“We are very pleased that the men and women of the armed forces who were subjected to unlawful non-judicial foreclosures while they were serving our country are now receiving compensation,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “We look forward, in the coming months, to facilitating the compensation of additional service members who were subjected to unlawful judicial foreclosures or excess interest charges.   We appreciate that JP Morgan Chase, Wells Fargo, Citi, GMAC Mortgage and Bank of America have been working cooperatively with the Justice Department to compensate the service members whose rights were violated.”

Section 533 of the SCRA prohibits non-judicial foreclosures against service members who are in military service or within the applicable post-service period, as long as they originated their mortgages before their period of military service began.  Even in states that normally allow mortgage foreclosures to proceed non-judicially, the SCRA prohibits servicers from doing so against protected service members during their military service and applicable post-military service coverage period.

Under the NMS, for mortgages serviced by Wells Fargo, Citi and GMAC Mortgage, the identified service members will each receive $125,000, plus any lost equity in the property and interest on that equity.  Eligible co-borrowers will also be compensated for their share of any lost equity in the property.  To ensure consistency with an earlier private settlement, JP Morgan Chase will provide any identified service member either the property free and clear of any debt or the cash equivalent of the full value of the home at the time of sale, and the opportunity to submit a claim for compensation for any additional harm suffered, which will be determined by a special consultant, retired U.S. District Court Judge Edward N. Cahn.  Payment amounts have been reduced for those service members or co-borrowers who have previously received compensation directly from the servicer or through a prior settlement, such as the independent foreclosure review conducted by the Office of the Comptroller of the Currency and the Federal Reserve Board.  The Bank of America payments to identified service members with nonjudicial foreclosures were made under a 2011 settlement with the Department of Justice.

The NMS also provides compensation for two categories of service members: (1) those who were foreclosed upon pursuant to a court order where the mortgage servicer failed to file a proper affidavit with the court stating whether or not the service member was in military service; and (2) those service members who gave proper notice to the servicer, but were denied the full benefit of the SCRA’s 6% interest rate cap on pre-service mortgages.  The service members entitled to compensation for these alleged violations will be identified later in 2015.

The following chart shows the number of service members who will be compensated by each of the servicers for the non-judicial foreclosures:

 

Amount of Money to be Distributed

Number of Service Members Eligible for Compensation

Bank of America

$35,369,756

286

Citi

$14,880,578

126

GMAC Mortgage

$13,720,588

113

JP Morgan Chase

$31,068,523

188

Wells Fargo

$28,358,179

239

TOTALS

$123,397,624

952

 

 

 

Borrowers should use the following contact information for questions about SCRA payments under the National Mortgage Settlement:

• Bank of America borrowers should call Rust Consulting, Inc., the settlement administrator, toll-free at 1-855-793-1370 or write to BAC Home Loans Servicing Settlement Administrator, c/o Rust Consulting, Inc., P.O. Box 1948, Faribault, MN 55021-6091.

• Citi borrowers should call Citi toll-free at 1-888-326-1166.

• GMAC Mortgage borrowers should call Rust Consulting Inc., the settlement administrator, toll-free at 1-866-708-0915 or write to P.O. Box 3061, Faribault, Minnesota 55021-2661.

• JPMorgan Chase borrowers should call Chase toll-free at 1-877-469-0110 or write to P.O. Box 183224, OH-7160/DOJ, Columbus, Ohio 43219-6009.

• Wells Fargo borrowers should call the Wells Fargo Home Mortgage Military Customer Service Center toll free at 1-877-839-2359.

Service members and their dependents who believe that their SCRA rights have been violated should contact an Armed Forces Legal Assistance office.  To find the closest office, consult the military legal assistance office locator at http://legalassistance.law.af.mil and click on the Legal Services Locator.  Additional information about the Justice Department’s enforcement of the SCRA and the other laws protecting service members is available at www.servicemembers.gov.

Today’s settlement was announced 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 including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

 

Note: The release is corrected to reflect that the other 286 service members and their co-borrowers are receiving over $35 million from Bank of America through an earlier settlement.

The Department of Justice reached an agreement today to resolve a lawsuit it brought against Sairam Enterprises Inc. LLC, which owns a hotel in Tulsa, Oklahoma.  The proposed consent decree, which must be approved by the court, resolves a 2014 lawsuit that the department filed against Sairam Enterprises over allegations that it violated the Americans with Disabilities Act (ADA) when it denied a room at a Days Inn to a person with a service animal and his family.

The lawsuit alleged that on July 31, 2010, a veteran of the U.S. Air Force and the U.S. Marine Corps who relies on a service animal sought a hotel room at the Days Inn and Conference Center Tulsa which had a no pets policy.  The Days Inn is now known as the Tuscany Inn.  The veteran wanted a room for himself, his family and his service dog.  His service dog is a German shepherd, which performs tasks related to his disabilities. 

The complaint alleged that Sairam violated Title III of the ADA when it refused to rent the family a room because of the service dog.  The ADA requires that hotels allow guests to stay with their service animals without being subjected to additional fees.  Sairam denies the allegations.

Under the terms of the consent decree, Sairam will pay $5,000 to the veteran and his wife and will provide its employees with training regarding the ADA and the protections it provides to guests with service animals.  The consent decree also requires Sairam to post signs and other announcements at its hotel stating its willingness to lodge travelers with service animals.

“The Department of Justice is determined to enforce the right of all people with disabilities to have equal access to hotels and other public accommodations,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “This settlement vindicates the rights of a veteran and his family and protects the rights of all future travelers with disabilities who pass through Tulsa.”

“The Northern District of Oklahoma is committed to protecting the rights of people with disabilities to ensure equal access to public accommodations,” said U.S. Attorney Danny C. Williams Sr. for the Northern District of Oklahoma.       “My office will continue to work to eliminate barriers to the use of public accommodations and to protect every citizen’s rights.”

To read the consent decree and for more information on the ADA, visit the ADA website at www.ada.gov.  Those interested in finding out more about this consent decree or the obligations of public entities under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website.  ADA complaints may be filed by email to ada.complaint@usdoj.gov.  

A former police officer employed by the City of Salem, Virginia, and assigned to a U.S. Drug Enforcement Administration (DEA) task force, was sentenced today to 30 months in prison for soliciting and receiving sexual favors from a cooperating defendant in exchange for agreeing to recommend a favorable sentence to a federal prosecutor on the defendant’s behalf. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Adam S. Lee of the FBI’s Richmond Division and Special Agent in Charge Michael Tompkins of the Department of Justice, Office of the Inspector General’s Washington Field Office made the announcement after the sentence was imposed by Chief U.S. District Judge Glen E. Conrad of the Western District of Virginia.   

Kevin C. Moore, 42, of Roanoke, Virginia, pleaded guilty on Dec. 16, 2014, to one count of bribery.  

According to his plea agreement and accompanying statement of facts, between June and September 2014, while Moore was serving as a DEA task force officer, Moore informed a female cooperating defendant that he was in a position to help her with her pending federal methamphetamine trafficking case.  In August 2014, for example, in a series of text messages with the cooperating defendant, Moore made clear that he could recommend a favorable sentence to a prosecutor on the cooperating defendant’s behalf in exchange for sexual favors.  Moore then convinced the cooperating defendant to go for a ride in his official vehicle where she performed a sexual act with Moore.

As part of his guilty plea, Moore also admitted to engaging in similar conduct with two other female cooperating witnesses in federal drug investigations dating back to 2009.  According to the statement of facts, Moore falsely informed these witnesses that he had convinced federal prosecutors not to charge them with federal criminal offenses that would carry significant prison sentences.  Moore then solicited and received sexual favors from the witnesses in exchange for his purported assistance.

Moore was arrested on Oct. 10, 2014, without incident, and was suspended from the police department and DEA task force the same day.  Moore was terminated from his employment with the City of Salem Police Department after pleading guilty in this case.

This case was investigated by the FBI and the Justice Department’s Office of the Inspector General, and was prosecuted by Trial Attorneys Charles R. Walsh and Robert J. Heberle of the Criminal Division’s Public Integrity Section.

The general manager of a Southern California ambulance company was sentenced today to 78 months in federal prison for his role in a $5.5 million scheme to defraud the Medicare program.

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

Wesley Harlan Kingsbury, 34, of Bloomington, California, pleaded guilty on Sept. 15, 2014, to one count of conspiracy to commit health care fraud, one count of conspiracy to obstruct a Medicare audit and one count of making materially false statements to federal law enforcement officers.  In addition to the prison sentence, U.S. District Judge Dale S. Fischer of the Central District of California ordered Kingsbury to pay $1,338,413 in restitution.

According to admissions made in connection with his guilty plea, Kingsbury was the general manager of Alpha Ambulance Inc. (Alpha), which specialized in the provision of non-emergency ambulance transportation services to Medicare beneficiaries, primarily to and from dialysis treatments.  Kingsbury admitted that between April 2010 and July 2012, he conspired with the owners of Alpha, Alex Kapri and Aleksey Muratov, and the training supervisor, Danielle Medina, to bill Medicare for ambulance transportation services for individuals that did not need to be transported by ambulance.  In addition, as general manager, Kingsbury instructed emergency medical technicians employed by Alpha to conceal the true medical condition of patients they were transporting by altering paperwork and creating false justifications for the transportation services. 

In early 2012, Medicare notified Alpha that they would be subject to a Medicare audit.  In response, Kingsbury admitted that he and his co-conspirators altered patient documentation to falsely justify the ambulance transportation services.  Specifically, Kingsbury admitted that he and others used light tracing tables to trace over original documents and create falsified patient documentation for submission to Medicare.  They then shredded the original patient documents.

Kingsbury and his co-conspirators submitted $5,522,079 in fraudulent claims to Medicare, and Medicare paid $1,338,413 on those claims.

Further, according to admissions in connection with Kingsbury’s guilty plea, in April 2012, Kingsbury was approached by law enforcement officers and asked to assist with the investigation into Alpha.  Kingsbury disclosed to the owners of Alpha the names of the law enforcement officers who were conducting the investigation and the questions they had asked.  On May 1, 2012, Kingsbury falsely denied to the law enforcement agents that he had disclosed that information to the owners of Alpha.

Kapri, Muratov and Medina pleaded guilty to conspiracy to commit health care fraud on Oct. 28, 2013.  They were sentenced to 75 months, 108 months, and 30 months in prison, respectively.

The case was investigated by the FBI and the Los Angeles Region of HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  The case was prosecuted by Trial Attorneys Blanca Quintero and Alexander F. Porter, and Assistant Chief Ben Curtis of the Criminal Division’s Fraud Section.

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

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

A federal jury in Detroit today convicted an unlicensed physician for his participation in a nearly $4.7 million Medicare fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office.

Wilfred Griffith, 64, of Detroit, a graduate of a foreign medical school with no medical license, was found guilty of one count of conspiracy to commit health care fraud and one count of conspiracy to solicit and receive health care kickbacks.  A sentencing hearing is scheduled for July 8, 2015, before U.S. District Judge Sean F. Cox of the Eastern District of Michigan.   

According to evidence presented at trial, Griffith worked as an unlicensed physician at Phoenix Visiting Physicians in 2010 and 2011.  At that clinic, Griffith treated Medicare beneficiaries and used prescription pads pre-signed by Dr. Dwight Smith to prescribe medicine. 

The evidence demonstrated that Griffith also referred Medicare beneficiaries to a Detroit-area home health company called Cherish Home Health Services Inc. (Cherish) in exchange for kickbacks.  In ordering the home health services, Griffith used the names and signatures of Dr. Smith and two other Detroit-area physicians to certify that the beneficiaries were homebound and needed home health services, when they did not.

Evidence showed that based on the fraudulent referrals from Griffith and others, Cherish submitted false claims to Medicare for home health services that were never provided and were not medically necessary.  Medicare beneficiaries pre-signed supporting medical paperwork that was then completed and signed by others at Cherish to falsely show that care was provided.

Between November 2009 and December 2013, Medicare paid Cherish nearly $4.7 million, which included more than $680,000 for home health services purportedly rendered to beneficiaries referred by Griffith using the names of Dr. Smith and the two other physicians. 

Two other individuals have pleaded guilty for their roles in this scheme.  Zia Hassan, 48, the owner of Cherish, pleaded guilty on Jan. 16, 2015, and Nathan Miller, 53, a patient recruiter who referred beneficiaries to Hassan in exchange for cash kickbacks, pleaded guilty on Aug. 4, 2014.  On May 7, 2012, Dr. Smith also pleaded guilty to one count of conspiracy to commit health care fraud, and on June 12, 2014, U.S. District Judge Gerald E. Rosen of the Eastern District of Michigan sentenced Dr. Smith to three years in prison.

The case was investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  The case is being prosecuted by Trial Attorney Katharine A. Wagner and Special Trial Attorney Katie R. Fink of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Patrick J. Hurford of the Eastern District of Michigan.

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

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

Midwest Hospice Chain Allegedly Billed Medicare for Ineligible Patients

Today, Good Shepherd Hospice Inc., Good Shepherd Hospice of Mid America Inc., Good Shepherd Hospice, Wichita, L.L.C., Good Shepherd Hospice, Springfield, L.L.C., and Good Shepherd Hospice – Dallas L.L.C. (collectively Good Shepherd) agreed to pay $4 million to resolve allegations that Good Shepherd submitted false claims for hospice patients who were not terminally ill.  Good Shepherd is a for-profit hospice headquartered in Oklahoma City which provides hospice services in Oklahoma, Missouri, Kansas and Texas.

“The Medicare hospice benefit is intended to provide comfort and care to patients nearing the end of life,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “We will continue to aggressively pursue companies that abuse the hospice benefit to improperly inflate their profits.”

The Medicare hospice benefit is available for patients who elect palliative treatment (medical care focused on providing patients with relief from pain, symptoms or stress) for a terminal illness and have a life expectancy of six months or less if their illness runs its normal course.  When a Medicare patient receives hospice services, that individual is no longer entitled to Medicare coverage for care designed to cure his or her illness.

The government alleged that Good Shepherd knowingly submitted or caused the submission of false claims for hospice care for patients who were not terminally ill.  Specifically, the United States contended that Good Shepherd engaged in certain business practices that contributed to claims being submitted for patients who did not have a terminal prognosis of six months or less, by pressuring staff to meet admissions and census targets and paying bonuses to staff, including hospice marketers, admissions nurses and executive directors, based on the number of patients enrolled.  The United States further alleged that Good Shepherd hired medical directors based on their ability to refer patients, focusing particularly on medical directors with ties to nursing homes, which were seen as an easy source of patient referrals.  The United States also alleged that Good Shepherd failed to properly train staff on the hospice eligibility criteria. 

“Health care fraud puts profits above patients, and steals from taxpayers,” said U.S. Attorney Tammy Dickinson of the Western District of Missouri.  “In this case, company whistleblowers alleged that patients received unnecessary hospice care while Good Shepherd engaged in illicit business practices to enrich itself at the public’s expense.  Today’s settlement fairly resolves those issues and puts measures in place to prevent similar conduct in the future.”

In addition, as part of the settlement, each Good Shepherd entity agreed to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG), which will provide for procedures and reviews to be put into place to avoid and promptly detect conduct similar to that which gave rise to the settlement. 

“Being a hospice provider in the Medicare program is a privilege, not a right,” said Special Agent in Charge Mike Fields of the HHS-OIG Dallas Region.  “Hospice providers that seek to boost profits by providing hospice services to Medicare beneficiaries who are not terminally ill compromise both the health of its patients as well as the integrity of Medicare.  Our agency will continue to hold such hospice providers accountable for their actions.”

The settlement resolves allegations filed by relators Kathi Cordingley and Tracy Jones, former employees of Good Shepherd, under the qui tam or whistleblower provisions of the False Claims Act, which authorize private parties to sue for fraud on behalf of the United States and share in the recovery.  The relators will receive approximately $680,000.

This suit is part of 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 $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Missouri and HHS-OIG.  The claims asserted against defendants are allegations only and there has been no determination of liability. 

The lawsuit is captioned United States ex rel. Cordingley and Jones v. Good Shepherd Hospice, Mid America, Inc., No. 4:11-cv-1087 (W.D. Mo.). 

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Richard Callahan of the Eastern District of Missouri and Special Agent in Charge William P. Woods of the FBI’s St. Louis Division announced that a federal indictment was unsealed earlier today charging six individuals with terrorist related crimes.  Charged in the indictment are:  Ramiz Zijad Hodzic, 40, his wife Sedina Unkic Hodzic, 35, and Armin Harcevic, 37, all of St. Louis County, Missouri; Nihad Rosic, 26, of Utica, New York; Mediha Medy Salkicevic, 34 of Schiller Park, Illinois; and Jasminka Ramic, 42, of Rockford, Illinois.  All defendants are charged with conspiring to provide material support and resources to terrorists, and with providing material support to terrorists.  Ramiz Zijad Hodzic and Nihad Rosic are also charged with conspiring to kill and maim persons in a foreign country.

All six individuals are natives of Bosnia who immigrated to the United States.  Three have become naturalized citizens of the United States and the remaining three have either refugee or legal resident status.  Five of the defendants are in the United States and have been arrested.  A sixth defendant is overseas.

If convicted, the crimes of conspiring to provide material support and providing material support carry penalties ranging up to 15 years imprisonment for each count and/or fines up to $250,000.  The crime of conspiring to kill and maim persons in a foreign country carries a penalty of up to life in prison.  In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

“Today’s charges and arrests underscore our resolve to identify, thwart, and hold accountable individuals within the United States who seek to provide material support to terrorists and terrorist organizations operating in Syria and Iraq,” said Assistant Attorney General Carlin.  “Preventing the provision of supplies, money, and personnel to foreign terrorist organizations like ISIL remains a top priority of the National Security Division and our partners in the law enforcement and intelligence communities.  I want to thank the many agents, analysts and prosecutors responsible for this case.”

“The indictment unsealed today epitomizes the FBI's commitment to disrupting and holding accountable those who seek to provide material support to terrorists and terrorist organizations,” said Special Agent in Charge Woods.  “This case underscores the clear need for continued vigilance in rooting out those who seek to join or aid terrorist groups that threaten our national security.”

This case was investigated by the St. Louis FBI’s Joint Terrorism Task Force, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), U.S. Postal Inspection Service, St. Louis Metropolitan and St. Louis County Police Departments, with assistance from multiple law enforcement agencies.  The case is being prosecuted by Assistant U.S. Attorneys Matthew Drake, Howard Marcus and Kenneth Tihen of the Eastern District of Missouri and Mara Kohn, a Trial Attorney in the Counterterrorism Section of the Department of Justice.  

As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt.  Every defendant is presumed to be innocent unless and until proven guilty.      

Indictment     

A former executive of Japan-based Kawasaki Kisen Kaisha Ltd. (K-Line) pleaded guilty today and was sentenced to 14 months in a U.S. prison for his involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced today. 

According to the one-count felony charge filed in U.S. District Court for the District of Maryland in Baltimore on Dec. 29, 2014, Takashi Yamaguchi, who was a general manager and executive officer in K-Line’s car carrier division, conspired to allocate customers and routes, rig bids and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore.  Yamaguchi participated in the conspiracy from at least as early as July 2006 until at least April 2010.  

Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and off of an ocean-going vessel.  Examples of this cargo include new and used cars and trucks and construction and agricultural equipment.

“Today’s sentencing is another step in our efforts to hold executives accountable for raising the cost of shipping cars, trucks and other equipment to and from the United States,” said Bill Baer, Assistant Attorney General for the Antitrust Division.  “We will continue to pursue the corporations and executives whose illegal agreements have harmed American consumers.”  

Pursuant to the plea agreement, which was accepted by the court today, Yamaguchi was sentenced to serve a 14-month prison term and pay a $20,000 criminal fine for his participation in the conspiracy.  In addition, Yamaguchi has agreed to assist the department in its ongoing investigation into the ocean shipping industry.

Yamaguchi was charged with a violation of the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for an individual.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s sentence is the second imposed against an individual in the division’s ocean shipping investigation.  Previously, three corporations have agreed to plead guilty and to pay criminal fines totaling more than $136 million, including Yamaguchi’s employer K-Line, which was sentenced to pay a criminal fine of $67.7 million in November 2014.  Another K-Line executive was sentenced one week ago by the court in Baltimore.

Today’s plea agreement is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit.  Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Baltimore Field Office at 410-265-8080.

The owners of a tax preparation business that filed fraudulent tax returns on behalf of inmates at various New Jersey prisons were convicted at trial today of conspiracy, mail fraud and making false claims to the United States for payment of fraudulent tax refunds, U.S. Attorney Paul J. Fishman of the District of New Jersey and Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.       

Kamal J. James, aka Bro Messiah Aziz El, of Seaford, Delaware, and Crystal G. Hawkins, aka Sis. Crystal Gabri El, of Laurel, Delaware, had each been charged in a superseding indictment with one count of conspiracy, 16 counts of making false claims for income tax refunds and three counts of mail fraud.  They were convicted on all counts following a one-week trial before U.S. District Judge Peter G. Sheridan in federal court in Trenton, New Jersey.  The jury deliberated one hour before returning the guilty verdicts.

According to the superseding indictment and the evidence at trial:

Between October 2011 and October 2013, defendants James and Hawkins operated Release Refunds, a purported tax preparation business – previously based in Brick, New Jersey, and in Seaford, Delaware –  through which they solicited current and former New Jersey prison inmates as clients and then filed fraudulent tax returns on their behalf.   

James and Hawkins sent Release Refunds “promotional” flyers to inmates at various New Jersey prisons and halfway houses offering tax return preparation services.  The pair asked inmates interested in Release Refunds’ services to provide basic identification information and to sign income tax returns and other Internal Revenue Service (IRS) documents, but not to include any information about their income or withholdings.  James and Hawkins then filled in the missing income information on the return forms, fabricating the inmates’ earnings to trigger fraudulent and inflated refunds.

During the course of the investigation, an undercover IRS-Criminal Investigation agent posing as an inmate in a New Jersey prison submitted a completed Release Refunds form and sent it to James and Hawkins.  They then sent the “inmate” blank income tax forms and other IRS documents and instructions to sign the documents.  James and Hawkins did not request any financial information from the undercover agent before preparing three fraudulent tax returns – including false income information that James and Hawkins provided – to be filed on behalf of the agent for tax years 2010 through 2012.  The fraudulent returns resulted in several thousand dollars in refunds and a $1,485 fee claimed by the defendants.

The conspiracy count carries a statutory maximum sentence of 10 years in prison.  The fraudulent claims counts each carry a statutory maximum sentence of five years in prison and the mail fraud counts each carry a statutory maximum sentence of 20 years in prison.  The defendants also face a fine of $250,000, or twice the amount of the gain or loss from the offense, for each count of conviction.  Sentencing is scheduled for May 11.

U.S. Attorney Fishman and Principal Deputy Assistant Attorney General Ciraolo credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s charges.  They also thanked the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates, and the New Jersey Department of Corrections, under the direction of Commissioner Gary M. Lanigan, for their roles in the case.

The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton and Trial Attorney Thomas Jaworski of the Tax Division.

Medical device manufacturer Medtronic Inc. has agreed to pay the United States $2.8 million to resolve allegations under the False Claims Act that Medtronic caused certain physicians to submit false claims to federal health care programs for a medical procedure known as “SubQ stimulation,” the Justice Department announced today.  Medtronic Inc. is a medical technology company based in Minnesota.

“Today’s settlement demonstrates our commitment to ensure that beneficiaries of federal health care plans, including Medicare recipients and military families, receive medical treatments that have been proven safe and effective,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “Targeting chronic pain patients with a medical procedure that lacks evidence of clinical efficacy wastes the country’s health care resources.”

The United States alleged that from 2007 through 2011, Medtronic knowingly caused dozens of physicians located throughout more than 20 states to submit claims to Medicare and TRICARE for investigational medical procedures known as SubQ stimulation that were not reimbursable.  In these procedures, Medtronic’s spinal cord stimulation devices were placed just beneath the skin near an area of pain, most often in the lower back, where the devices could provide electrical impulses to create a “tingling” sensation intended to alleviate chronic pain.  The United States alleged that even though the safety and efficacy of SubQ stimulation had not been established as required by the Food and Drug Administration (FDA), the company promoted this procedure by, among other strategies, arranging to have physician-customers attend Medtronic-sponsored “on-site training programs” regarding the use of Medtronic spinal cord stimulation devices for SubQ stimulation.        

“Patients should be able to trust that their health care providers only use – and bill Medicare for – medical procedures that have been shown to be safe and effective,” said Special Agent in Charge Scott J. Lampert of the Department of Health and Human Services’ Office of Inspector General (HHS–OIG).  “Our agency will continue to pursue medical device makers that ignore requirements designed to protect patient health and federal health care programs.”

The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.  The lawsuit was filed by Jason Nickell, who formerly worked as a Medtronic sales representative.  Nickell will receive $602,000. 

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 $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with Medtronic was the result of a coordinated effort among the U.S. Attorney’s Office for the Western District of New York, the Civil Division’s Commercial Litigation Branch, HHS–OIG, the Defense Health Agency, the FDA’s Office of Chief Counsel and the FDA’s Office of Criminal Investigations.     

The claims resolved by this settlement are allegations only and there has been no determination of liability.  The lawsuit is captioned United States ex rel. Nickel v. Medtronic, Inc. Civ. No. 09 - CV - 0203-S (W.D.N.Y.).  

Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York announced that Adel Abdel Bary, aka “Adel Mohammed Abdul Almagid Abdel Bary,” aka “Abbas,” aka “Abu Dia,” aka “Adel” (Bary), was sentenced in Manhattan federal court to 25 years in prison for his conviction on international terrorism charges in connection with Bary’s work on behalf of al Qaeda and the Egyptian Islamic Jihad.  Bary was extradited to the United States from the United Kingdom on Oct. 6, 2012.  On Sept. 19, 2014, Bary pleaded guilty to a three-count superseding Information charging him with one count of conspiring to make a threat to kill, injure, intimidate, and damage and destroy property by means of an explosive, one count of making such a threat, and one count of conspiring to kill U.S. nationals.  Bary pleaded guilty before U.S. District Judge Lewis A. Kaplan, who also imposed today’s sentence.

“Adel Abdel Bary was a member of the London cell of the Egyptian Islamic Jihad and worked closely with al Qaeda leadership both before and after the bombings of the U.S Embassies in Kenya and Tanzania in 1998 to disseminate al Qaeda threats against U.S. citizens and interests around the world,” said Assistant Attorney General Carlin.  “This sentence holds him accountable for his key role in facilitating the delivery of al Qaeda’s message to extremists around the world encouraging the commission of violent acts against the United States and its citizens.  I commend all of the people who worked on this case over many years in order to reach this result.”

“Adel Abdel Bary occupied important positions in Egyptian Islamic Jihad and al Qaeda,” said U.S. Attorney Bharara.  “As he admitted at his plea last September, he facilitated communications by Osama bin Laden and other al Qaeda leaders, including publication of the 1998 al Qaeda fatwah to kill Americans, and al Qaeda’s claims of responsibility for the 1998 bombings of two American embassies in Africa.  The sentence imposed today reflects the seriousness of Bary’s crimes, his role, and his acceptance of responsibility for them.”

According to the indictment based on which Bary was extradited, the superseding information to which he pleaded, other documents filed in Manhattan federal court, and statements made at Bary’s guilty plea and at today’s sentencing:

In 1997 and 1998, Bary led the London, England, cell of the Egyptian Islamic Jihad (EIJ) organization.  EIJ, which was led for years by co-defendant Ayman al Zawahiri, was dedicated to the forceful overthrow of the Egyptian Government and to violent opposition of the United States, in part, for its support of the Government in Egypt.   By February 1998, EIJ had effectively merged with al Qaeda and EIJ joined with al Qaeda in targeting American civilians.  To that end, in February 1998, indicted co-defendant Usama Bin Laden and Zawahiri endorsed a purported fatwah under the banner of the “International Islamic Front for Jihad on the Jews and Crusaders.”  This fatwah stated that Muslims should kill Americans – including civilians – anywhere in the world where they can be found.  Then again, on Aug. 4, 1998, EIJ published a statement threatening to retaliate against America for its claimed involvement in the apprehension of EIJ members.  A copy of this statement was found in an office used by Bary and his London-based co-conspirators.

While in London, Bary pledged his commitment to pursue the goals of EIJ and to follow the orders of the leadership of the group.  Many of the leading members of EIJ became influential members of al Qaeda, including Zawahiri and indicted co-defendant Muhammad Atef, both of whom later sat on the majlis al shura (or consultation council) of al Qaeda.  Zawahiri is now the declared leader of al Qaeda.

On Aug. 7, 1998, three days after EIJ published its threat to retaliate against America, al Qaeda operatives bombed the United States Embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, killing 224 people.  Bary transmitted, via international telephone calls to the media, the contents of al Qaeda’s claims of responsibility for the Aug. 7, 1998, bombings.  These claims of responsibility included threats of future terrorist attacks by al Qaeda and its allies, and were sent from London to media organizations in France, Qatar, and the United Arab Emirates on Aug. 8, 1998 – the day after the embassy bombings.

In August 1998, both before and after the bombings, Bary additionally arranged for messages to be transmitted from members of the media to his co-conspirators, including Bin Laden and Zawahiri, and conveyed messages from his co-conspirators, including Bin Laden and Zawahiri, to members of the media.  Bary also used an office in London, which he shared with co-conspirators, to store documents, including the claims of responsibility described above, as well as for other conduct related to the conspiracy to murder U.S. nationals.

*                *                *

In addition to his prison term, Bary, 54, was ordered to pay restitution in the amount of $33,816,561, including $7,516,561 to victims’ family members for loss of income and $26,300,000 to the United States for property loss.

A co-defendant, Khalid al Fawwaz, aka “Khaled Abdul Rahman Hamad al Fawwaz,” aka “Abu Omar,” aka “Hamad” (Fawwaz), is currently on trial before U.S. District Judge Kaplan.  The charges against Fawwaz are merely accusations, and Fawwaz is presumed innocent unless and until proven guilty.

Assistant Attorney General Carlin and U.S Attorney Bharara praised the outstanding efforts of the FBI’s New York-based Joint Terrorism Task Force – which principally consists of special agents of the Federal Bureau of Investigation and detectives of the New York City Police Department – as well as the outstanding efforts of the United States Marshals Service, Metropolitan Police Department of London (New Scotland Yard) and the Department of Justice’s Office of International Affairs.

This case is being prosecuted by Assistant U.S. Attorneys Sean S. Buckley, Adam Fee, Nicholas J. Lewin, and Stephen J. Ritchin of the Southern District of New York’s Terrorism and International Narcotics Unit.

Today, U.S. District Court Judge L. Scott Coogler sentenced Pamela Morris, former secretary of a chapter of the Ku Klux Klan (KKK) in Ozark, Alabama, to 10 months in prison and three years of supervised release for committing perjury during a grand jury’s investigation into a racially motivated cross-burning.

Morris, 47, previously admitted during her plea hearing on June 12, 2014, that she lied to a federal grand jury investigating a cross-burning committed by Steven Joshua Dinkle, Morris’s son and the Exalted Cyclops (president) of the local KKK, and Thomas Smith, another KKK member.  On May 8, 2009, Dinkle and Smith burned a six-foot tall cross at the entrance to an African American neighborhood in Ozark to threaten and intimidate residents.  Several witnesses observed and were frightened by the cross, including a young man returning from choir practice as the defendants set the cross ablaze.  In sworn testimony before the grand jury, Morris made several false statements, including denying that she had been the secretary of the Klan or involved with the KKK at all.

In pleading guilty, Morris admitted that she had been an officer of the KKK and that her testimony denying any connection to the organization was false.  She further acknowledged that she knew Dinkle had committed the cross-burning.  In addition, Morris admitted that she testified falsely to prevent the grand jury from learning about other KKK members who had information relevant to the investigation.

Dinkle is currently serving a 24-month sentence imposed on May 15, 2014, for his conviction on hate-crime and obstruction-of-justice charges related to the cross-burning.  Smith, Dinkle’s co-conspirator, was sentenced to five years of probation on Aug. 19, 2014.

“Acts that target individuals and communities for violence based on race have no place in our society,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “Nor can we tolerate those who lie under oath to obstruct the pursuit of justice.”

“Ms. Morris blatantly lied to the grand jury in an attempt to protect herself and to protect a cross burner,” said U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.  "Ms. Morris lied after she swore to the grand jury that she would tell the truth.  For our system of justice to protect the rights of all, those who testify before the grand jury must provide accurate and honest information.  If someone fails to tell the truth while under oath, we will prosecute them."

This case was investigated by the Federal Bureau of Investigation, with the assistance of the Dale County Sheriff’s Office and the Ozark Police Department.  The case was prosecuted by Assistant U.S. Attorneys Jerusha T. Adams and of the Middle District of Alabama and Trial Attorney Chiraag Bains of the Justice Department’s Civil Rights Division.

An Army soldier was sentenced to life in prison without the possibility of parole today for murdering his five-year-old daughter, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Florence T. Nakakuni of the District of Hawaii. 

Naeem Williams, 34, was sentenced today by U.S. District Judge J. Michael Seabright of the District of Hawaii.  On June 27, 2014, a federal jury in Honolulu found Williams guilty of beating his daughter, Talia Williams, to death at the family’s residence on Wheeler Army Airfield in Honolulu.

The jury also convicted Williams of participating, along with his wife, Delilah Williams, in a pattern and practice of assault and torture from December 2004 until July 16, 2005, that resulted in Talia’s death.  In addition, Williams was convicted of obstructing justice and making false statements to Army Criminal Investigation Division agents on the night of his arrest in July 2005.

The evidence presented at trial demonstrated that Naeem Williams and his wife beat Talia almost daily.  Naeem Williams testified that the abuse was aimed at disciplining his daughter for bathroom accidents and was exacerbated due to frustrations he was experiencing in his marriage.  The evidence indicated that the physical abuse included punching Talia repeatedly, commanding her to eat her own feces, depriving her of food, requiring her to do strenuous exercises and then beating her when she was unable to continue, and using duct tape to bind her to a bed post where she was whipped with a belt.  In the hours preceding her death, Naeem Williams struck Talia and her head slammed backwards against the floor.  Talia then appeared to have a seizure. 

Delilah Williams pleaded guilty to first-degree felony murder, agreed to testify against her husband and was sentenced to 20 years in prison.

This case was investigated by the FBI and the Army Criminal Investigation Division, and was prosecuted by Trial Attorney Steven D. Mellin of the Criminal Division’s Capital Case Section and Assistant U.S. Attorney Darren W.K. Ching of the District of Hawaii.

A federal court in Orlando, Florida, has permanently barred two managers of tax preparation stores in Florida from preparing tax returns for others and from owning or operating a tax return preparation business, the Justice Department announced today.

The civil injunction order, to which Jehoakim Victor and Lauri Rodriguez agreed, was signed by Chief Judge Anne C. Conway of the U.S. District Court for the Middle District of Florida.

The United States filed its civil injunction complaint in September 2014 against Kerny Pierre-Louis, Rodriguez and Victor.  Rodriguez and Victor managed and supervised employees at LBS Tax Services stores, which were owned by Pierre-Louis.  According to the complaint, both Rodriguez and Victor were paid, in part, based on a percentage of the gross tax preparation fees that the locations charged its customers.  The government alleged that they, and return preparers they supervised, prepared fraudulent federal tax returns on which they falsely claimed the earned-income credit and bogus education credits, report improper filing statuses, inflated federal income tax withholdings and fabricated business expenses.

The lawsuit against Pierre-Louis, Rodriguez and Victor is one of eight suits filed by the United States in Florida against Walner Gachette, the founder and franchisor of LBS Tax Services, and numerous other LBS franchisees and managers.  The other cases, as well as the claims against Pierre-Louis in this case, remain pending. 

Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2015.  The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department 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.

The U.S. District Court for the District of Oregon entered a permanent injunction against James G. Cole Inc., of Hood River, Oregon, its president James G. Cole and its former general manager Julie D. Graves to prevent the distribution of unapproved and misbranded drugs and adulterated dietary supplements, the Department of Justice announced today. 

The company manufactures various products that have been distributed under the name “Maxam Nutraceutics.”  The department filed a complaint in the U.S. District Court for the District of Oregon, at the request of the U.S. Food and Drug Administration (FDA), alleging that the company’s dietary supplements are manufactured under conditions that are inadequate to ensure the quality of its products and that its products are unapproved and misbranded drugs.  Pursuant to the permanent injunction entered by the court on Feb. 5, the defendants are prevented from distributing the company’s products until the defendants comply with the requirements set forth in the court’s order. 

U.S. District Court Judge Michael H. Simon held that the company’s Maxam products are unapproved new drugs under the federal Food, Drug, and Cosmetic Act (FDCA).  The court based its decision in part on the company’s claims that the products could treat autism, Alzheimer’s, HIV and Fibromyalgia, among other diseases.

“The American public needs to have confidence that products promoted for the treatment of disease are safe and effective,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “The failure of manufacturers of dietary supplements to have procedures in place to ensure the quality and identity of all ingredients that go into their products poses a serious risk to public health.”

The court also held that the company’s products were misbranded drugs because the products failed to bear adequate directions for use for the purposes for which the drugs were intended – in the case of the company’s products, to treat diseases such as autism.  The court noted that such directions for use, including dosages, warnings and side effects, must be premised on clinical data derived from scientifically controlled investigation, and that the defendants had “conducted no controlled studies and collected no clinical data” regarding their products.

The court also found that the company’s products were adulterated dietary supplements because they were not produced in compliance with federal good manufacturing practice regulations.  Under the FDCA, dietary supplement manufacturers are required to have systems in place to ensure that their products meet specifications for identity, purity, strength and composition.  A series of inspections of the company’s manufacturing facility, conducted by the FDA beginning in 2012, revealed, among other things, that the defendants did not have specifications for the ingredients in their products and did not conduct appropriate tests on incoming shipments of components used in the manufacture of their products to determine the identity, strength, purity and composition of each component.  The court found that the state of the defendants’ manufacturing practices was such that the defendants have “no idea what goes into their products.”

The permanent injunction prohibits the defendants from manufacturing or distributing their products unless and until they take a number of steps to come into compliance with federal law, including obtaining FDA approval of their drug products or working with an expert to remove all claims from their product labels, promotional materials and websites that evidence an intended use for their products as drugs, and coming into full compliance with good manufacturing practice regulations.

“Along with our partners at the FDA, we are committed to protecting our citizens from threats to their health and safety,” said U.S. Attorney Amanda Marshall of the District of Oregon.  “Everyone who deals in products that affect people’s health must comply with federal law.”

The government was represented by Trial Attorney Ann Entwistle of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Enforcement Sonia Nath and Associate Chief Counsel for Enforcement Son Nguyen of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.  Assistance was also provided by the U.S. Attorney’s Office for the District of Oregon.

Attorney General Eric Holder released the following statement today on President Obama’s 2015 National Security Strategy:

“With the 2015 National Security Strategy, President Obama has laid out a credible and timely vision of strong and sustainable American leadership on a global scale.  This strategy is predicated on strength, both at home and around the world, and founded on the timeless values the American people have always held sacred.  In concert with our global partners – through patience, persistence, and a clear sense of purpose – this strategy will drive our efforts to confront threats, to reduce risks, and to advance our core interests of security, prosperity, and a rules-based international order.”

40 acusados de delitos federales por armas de fuego en los condados de Fresno, Tulare y Madera en el 2013; sentenciados a prisión federal en el 2013

SACRAMENTO, Calif. —Martin Wayne Flanders, 50, anteriormente de Roseville, y Ligia Sandoval Spafford, 48, de Roseville, se declararon culpables hoy de fraude por correo por su participación en un esquema de fraude dirigido a propietarios en dificultades, anunció Benjamín Wagner, procurador federal del Distrito Oriental de California.

De acuerdo con documentos del tribunal, entre 2008 y 2010, Flanders facturó a clientes tarifas adelantadas a cambio de un número de servicios financieros, incluyendo modificaciones de préstamo, auditorías de préstamo de hipoteca, reparación de créditos, alivio de deudas, solicitud de bancarrota, y un programa para vender casas a “inversores” con una opción de alquiler con derecho a compra. Flanders y Sandoval comercializaron estos servicios a propietarios en dificultades económicas con particular énfasis a aquellos de habla hispana. Durante un programa de radio transmitido dos veces a la semana por Radio Luz, una estación de radio cristiana de habla hispana en la Bay Area, Sandoval promocionó los servicios que ella y Flanders ofrecían. Flanders también se anunció en una estación de televisión de habla hispana, Univision, y en revistas hispanas. Aproximadamente un 98% de los clientes de los demandados eran de origen hispano, algunos de los cuales hablaban muy poco o nada de inglés. Sandoval habla español; Flanders no lo habla.

Flanders y Sandoval hicieron numerosas declaraciones falsas a inversores sobre el éxito de los programas que ofrecían o reembolsos que estarían disponibles si los programas no tenían éxito. “Ofertas fantasma” – ej., ofertas ficticias de comprar la propiedad de la víctima a través de ventas ràpidas – y “quiebras esqueleto” – ej., simulaciones de peticiones de bancarrota que fueron desechadas ràpidamente por el tribunal de bancarrotas – también fueron usadas por Flanders o Sandoval para tratar de retrasar el proceso de ejecución hipotecaria. Al menos de 25 a 30 personas pagaron por los servicios y no los recibieron o no recibieron los reembolsos cuando los programas fallaron en entregar los reembolsos prometidos. El total de pérdidas para las víctimas es al menos de  $120,000. Algunos propietarios que no fueron capaces de obtener ayuda fueron embargados por sus prestamistas.

“Flanders y Sandoval se aprovecharon de las víctimas con escasos conocimientos de inglés,   cuando esas víctimas eran màs vulnerables financieramente,” dijo Benjamín Wagner, procurador federal del Distrito Oriental de California.  “Esquemas de este tipo de fraude predador han sido y continuaràn siendo uno de los focos principales de nuestros esfuerzos en procesar fraudes con hipotecas.”

Este caso es el producto de una investigación por la Oficina Federal de Investigación. El procurador federal asistente Todd A. Pickles està procesando el caso.

Flanders ha estado detenido desde su arresto en octubre de 2012. Sandoval està actualmente libre de custodia.

Flanders y Sandoval estàn programados para ser sentenciados por el Juez de Distrito de los Estados Unidos Troy L. Nunley el 11 de junio de 2015.  Flanders y Sandoval se enfrentan a una pena màxima reglamentaria de 20 años en prisión y una multa de $250,000. La sentencia actual, sin embargo, serà determinada a discreción del tribunal después de considerar cualquier factor reglamentario aplicable y las Directrices Federales de Sentencia, que toman en consideración un número de variables.

A Detroit federal grand jury returned a two-count indictment against two former executives of a Japanese automotive parts manufacturer for their participation in a conspiracy to fix prices and rig bids of automotive parts and for obstruction of justice for ordering the destruction of evidence related to the conspiracy, the Department of Justice announced today.

The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Hiroyuki Komiya and Hirofumi Nakayama, former executives of Mitsuba Corporation, with conspiring to fix the prices of various automotive parts, including windshield wiper systems and components, sold to Honda Motor Company Ltd., Nissan Motor Co. Ltd., Toyota Motor Corp., Chrysler Group, LLC, Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and certain of their subsidiaries in the United States and elsewhere.

Komiya and Nakayama are also charged with knowingly and corruptly persuading, and attempting to persuade, employees of Mitsuba to destroy documents and delete electronic data that may contain evidence of antitrust crimes in the United States and elsewhere. 

“These charges demonstrate the Antitrust Division’s continued commitment to prosecuting individuals who commit criminal antitrust violations,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s Criminal Enforcement Program.  “Because these same individuals committed the additional crime of obstructing the investigation, they also serve as cautionary tale for those who are tempted to try to thwart the Antitrust Division’s investigative activities by destroying evidence.”

Komiya participated in the conspiracy as Mitsuba Director of Automotive Sales.  In 2007, he was promoted to Executive Managing Officer and Vice President of Sales.  Nakayama was the Office Manager of Mitsuba’s Nagoya sales office.  In 2005, he was promoted to Sales Operating Officer.

The indictment alleges, among other things, that beginning at least as early as April 2000 and continuing until at least February 2010, Komiya, Nakayama and co-conspirators participated in and directed, authorized or consented to the participation of subordinate employees in, meetings with co-conspirators and reached collusive agreements to rig bids, allocate the supply and fix the price to be submitted to automobile manufacturers.  Upon learning of the existence of this investigation, Komiya and Nakayama also urged their subordinates to delete and destroy documents related to this collusion.

Mitsuba is a corporation organized and existing under the laws of Japan with its principal place of business in Gunma, Japan.  On Nov. 6, 2013, Mitsuba pleaded guilty and agreed to pay a $135 million criminal fine for its role in the conspiracy as well as obstruction of justice. 

Including Komiya and Nakayama, 52 individuals have been charged in the government’s ongoing investigation into market allocation, price fixing, and bid rigging in the auto parts industry.  Additionally, 33 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.4 billion in fines.

Komiya and Nakayama are charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine 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.  The maximum penalty for obstruction of justice is 20 years in prison and a $250,000 criminal fine for individuals.

Today’s indictment is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.

Komiya et al Indictment

Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Richard L. Durbin Jr. of the Western District of Texas, FBI Special Agent in Charge Christopher Combs and Chief Patrol Agent Rudolfo Karisch of the U.S. Border Patrol’s Del Rio Sector announced today that Abdinassir Mohamud Ibrahim was sentenced to 15 years in federal prison for conspiring to provide material support to Al-Shabaab, a designated foreign terrorist organization, and for making a false statement in an immigration matter.

Ibrahim, 43, a citizen of Somalia, was charged in a two-count superseding information, returned on July 31, 2014 and unsealed today in San Antonio, and pleaded guilty to both counts of the information on July 31, 2014.  Ibrahim admitted that from about May 18, 2010, to about Jan. 31, 2014, he knowingly conspired to provide material support and resources, specifically sending emails enlisting support for al-Shabaab and making a cash payment to a known member of al-Shabaab for the benefit of the organization.  Ibrahim knew at the time that al-Shabaab was designated by the United States as a foreign terrorist organization. 

Ibrahim also pleaded guilty to making a false statement in an immigration matter.  According to the information, Ibrahim knowingly lied in his application for naturalization as he had previously lied on his request for refugee status, falsely claiming that he was of a member of the minority Awer clan in Somalia and subject to persecution by the majority Hawiye clan.  However, Ibrahim was actually a member of the Hawiye clan and not subject to persecution.  Ibrahim also admitted he had lied on his naturalization application by having previously lied on his refugee application by falsely claiming that he had not provided material support to a terrorist group, when he had in fact provided material support in the form of cash to an al-Shabaab member. 

The case was investigated by the FBI and the Border Patrol together as part of the San Antonio Joint Terrorism Task Force.  The case was prosecuted by Assistant U.S. Attorneys Mark Roomberg and Christina Playton for the Western District of Texas.

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Rodney M. Kidd, age 29, stationed on board Andersen Air Force Base, Guam, has been indicted  by a federal grand jury on February 4, 2015, with two counts of theft of government money (18 U.S.C. § 641), one count of fraudulent claim against the United States (18 U.S.C. § 287), and one count of false statement to a federal government agency (18 U.S.C. § 1001).  For each count of theft of government money, the maximum sentence under the statute is 10 years in prison and a $250,000 fine.  For each count of fraudulent claim against the United States and each count of false statement to a federal government agency, the maximum sentence under the statute is 5 years in prison and a $250,000 fine.  A summons was issued for Kidd to appear in federal court on February 18, 2015, for his arraignment.

The indictment alleges that from October 1, 2012 through April 30, 2013, Kidd, an active duty Staff Sergeant in the U.S. Air Force, knowingly stole about $19,645.15 in Overseas Housing Allowance funds from the Defense Finance and Accounting Service (DFAS), a Department of Defense agency that pays military service members.

Military members who are active duty or activated reservists or activated National Guardsmen are eligible to receive a tax-free housing allowance known as Overseas Housing Allowance (OHA).  The amount of OHA compensation that an active duty military member can receive is determined by the actual amount of money the individual is paying for housing costs, up to a maximum amount determined by the individual’s rank and whether or not the individual has dependents.  If a military member is sharing his residence with another military member, then the amount of OHA distributed to that person would be cut in half.

According to the indictment, from October 1, 2012 through April 30, 2013,  Kidd secretly shared his residence with another Air Force Staff Sergeant.  According to forms he signed and briefs he heard, Kidd knew that he was only entitled to be reimbursed for $1,100 of his $2,200 monthly rent, yet he kept the additional amounts.   Kidd received tax-free reimbursement for his fraudulent rental payments as well as tax-free reimbursements for utility expenses, which totaled approximately $19,645.15.

The indictment further alleges that on May 13, 2013, Kidd knowingly submitted false OHA documentation to DFAS that falsely claimed that Kidd and another active duty Air Force Staff Sergeant paid a total of $4,400 in rent every month for their occupancy of their residence in Dededo.  Relying on the OHA documentation Kidd submitted, DFAS paid tax-free OHA reimbursement for the $2,200 he supposedly paid for his share of the rent every month.  In reality, Kidd and the other Staff Sergeant had a secret arrangement with their landlord to pay a significantly reduced amount of rent each month so that they could each pocket the remaining OHA payments.

The indictment further alleges that from May 1, 2013 through May 31, 2014, Kidd received tax-free reimbursement for his fraudulent rental payments as well as tax-free reimbursements for utility expenses, which totaled approximately $35,136.60.  To corroborate this OHA claim, Kidd presented a false lease agreement to DFAS that falsely stated that Kidd paid $2,200.00 every month in rent for his occupancy of this Dededo residence.  The total amount of OHA payments Kidd fraudulently received was $54,781.75.

This case is the result of an investigation conducted by the Air Force Office of Special Investigations.  The prosecution is being handled by Special Assistant U.S. Attorney Kurt Grunawalt.

The charges in the Indictment are only allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Medical device manufacturer ev3 Inc., formerly known as Fox Hollow Technologies Inc., has agreed to pay the United States $1.25 million to resolve allegations under the False Claims Act that Fox Hollow caused certain hospitals to submit false claims to Medicare for unnecessary inpatient admissions related to minimally-invasive atherectomy procedures, the Justice Department announced today. 

“Today’s settlement demonstrates our commitment to ensure that the Medicare Trust Fund is used to pay for only necessary medical care,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “Charging the government for higher-cost inpatient services that patients do not need wastes the country’s precious health care resources.”

“It should come as no surprise to anyone that proper health care of a patient includes more than just competence of a provider, it requires accuracy and honesty in billing Medicare for the patient’s treatment,” said U.S. Attorney William J. Hochul Jr. of the Western District of New York.  “In this case, a medical device manufacturer allegedly induced hospitals to admit patients as inpatients for minimally-invasive procedures involving its device, even though many of those patients should have been treated as outpatients at significantly less cost.  This was done in order to collect higher Medicare reimbursements which ultimately drive up costs for all taxpayers and beneficiaries of government health programs.”

The United States alleged that Fox Hollow, which was acquired by ev3 Inc. in late 2007, knowingly caused 12 hospitals located throughout nine states to submit claims to Medicare for medically unnecessary inpatient stays for certain Medicare beneficiaries undergoing elective atherectomy procedures.  Atherectomy is a minimally-invasive surgical procedure that uses a small cutting device to remove atherosclerosis, or hardening of the arteries, from large blood vessels within the body, and it is intended to open up narrowed coronary arteries to increase blood flow and circulation.  One such device used in atherectomy procedures is the Silver Hawk Plaque Excision System sold by Fox Hollow.  The United States alleged that throughout 2006 and 2007, to increase hospital purchases of the Silver Hawk device, Fox Hollow advised hospitals that they should bill Silver Hawk atherectomy procedures as more expensive inpatient claims, as opposed to less costly outpatient claims.  As a result, certain hospitals allegedly claimed greater reimbursement than they were entitled to for treating Medicare beneficiaries who underwent Silver Hawk atherectomy procedures. 

“Medical device makers that try to boost their profits by causing patients to be admitted for unnecessary and expensive inpatient hospital stays will be held accountable,” said Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG).  “Both patients and taxpayers deserve to have medical decisions made based on what is medically appropriate.”

The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.  The lawsuit was filed by Amanda Cashi, who formerly worked as a Fox Hollow sales representative.  Cashi will receive $250,000. 

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 $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with ev3 was the result of a coordinated effort among the U.S. Attorney’s Office for the Western District of New York, the Civil Division’s Commercial Litigation Branch, and HHS-OIG.

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

The civil lawsuit is captioned United States ex rel. Cashi v. Fox Hollow Technologies, Inc., et al. Civ. No. 09-CV-01066-S (W.D.N.Y.). 

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Gillian A. Gallardo, age 29, stationed on board Andersen Air Force Base, Guam, has been  indicted by a federal grand jury on February 4, 2015, with two counts of theft of government money (18 U.S.C. § 641), two counts of fraudulent claim against the United States (18 U.S.C. § 287), and two counts of false statement to a federal government agency (18 U.S.C. § 1001).  For each count of theft of government money, the maximum sentence under the statute is 10 years in prison and a $250,000 fine.  For each count of fraudulent claim against the United States and each count of false statement to a federal government agency, the maximum sentence under the statute is 5 years in prison and a $250,000 fine.  A summons was issued for Gallardo to appear in federal court on February 18, 2015, for her arraignment.

The indictment alleges that on November 27, 2012, Gallardo, an active duty Staff Sergeant in the U.S. Air Force, knowingly submitted false Overseas Housing Allowance documentation to the Defense Finance and Accounting Service (DFAS) that falsely claimed that Gallardo paid $2,450 in rent every month for her supposed occupancy of a certain residence in Yigo. In reality, Gallardo lived rent-free at an entirely different address in Dededo and pocketed the OHA funds.

Military members who are active duty or activated reservists or activated National Guardsmen are eligible to receive a tax-free housing allowance known as Overseas Housing Allowance (OHA).  The amount of OHA compensation that an active duty military member can receive is determined by the actual amount of money the individual is paying for housing costs, up to a maximum amount determined by the individual’s rank and whether or not the individual has dependents.  In Gallardo’s case, the maximum rental amount for which she could be compensated was $2,450.

The indictment further alleges that from October 1, 2012 through April 30, 2013, Gallardo received tax-free reimbursement for her fraudulent rental payments as well as tax-free reimbursements for utility expenses, which totaled approximately $21,501.90.  To corroborate her OHA claim, Gallardo presented a false lease agreement to DFAS that falsely stated that Gallardo paid $2,450.00 every month in rent for her occupancy of this Yigo residence.

The indictment further alleges that on May 13, 2013, Gallardo again knowingly submitted false OHA documentation to DFAS that falsely claimed that Gallardo and another active duty Air Force Staff Sergeant paid a total of $4,400 in rent every month for their occupancy of their residence in Dededo.  Relying on the OHA documentation Gallardo submitted, DFAS paid tax-free OHA reimbursement for the $2,200 she supposedly paid for her share of the rent every month.  In reality, Gallardo and the other Staff Sergeant had a secret arrangement with their landlord to pay a significantly reduced amount of rent each month so that they could each pocket the remaining OHA payments.

From May 1, 2013 through March 31, 2014, Gallardo received tax-free reimbursement for her fraudulent rental payments as well as tax-free reimbursements for utility expenses, which totaled approximately $29,231.20.  To corroborate this OHA claim, Gallardo again presented a false lease agreement to DFAS that falsely stated that Gallardo paid $2,200.00 every month in rent for her occupancy of this Dededo residence.  The total amount of OHA payments Gallardo fraudulently received was $50,733.10.

This case is the result of an investigation conducted by the Air Force Office of Special Investigations.  The prosecution is being handled by Special Assistant U.S. Attorney Kurt Grunawalt.

The charges in the Indictment are only allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

An Army National Guard recruiter and recruiting assistant were convicted today for their roles in a bribery and fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

Jammie T. Martin, 37, and Michelle H. Davis, 34, both of Katy, Texas, were convicted today of conspiracy, bribery, wire fraud and aggravated identity theft.  The defendants were indicted on Aug. 7, 2013, and will be sentenced on May 7, 2015, by U.S. District Judge David Hittner of the Southern District of Texas.

From February 2009 through April 2011, Martin served as an Army National Guard recruiter. Davis served as a recruiting assistant with the Guard Recruiting Assistance Program (G-RAP), which was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the National Guard.  Both defendants worked out of a Texas National Guard Armory known as the Westheimer Armory. 

According to evidence presented at trial, Martin—who, as a recruiter, was ineligible for the G-RAP incentives—provided the personal identifying information of potential soldiers to Davis and at least three other National Guard soldiers.  Davis and the others then falsely claimed they were responsible for referring the potential soldiers to join the military and fraudulently received referral bonus payments through the G-RAP program.  Davis and the others paid approximately half of each fraudulent bonus payment to Martin as a kickback. 

To date, this investigation has led to the conviction of 26 individuals, including Martin and Davis.

This case is being investigated by the San Antonio Fraud Resident Agency of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit and prosecuted by Trial Attorneys Sean F. Mulryne and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John P. Pearson of the Southern District of Texas. 

A tax return preparer in Worcester and Hyde Park, Massachusetts, pleaded guilty today in the U.S. District Court for the District of Massachusetts to two counts of filing false claims with the Internal Revenue Service (IRS), the Department of Justice announced today. 

Yaw Aboagye-Marfo, 42, of Worcester and Hyde Park, Massachusetts, was charged in a superseding indictment in August 2014 with filing false tax returns that claimed refunds to which clients were not entitled.  According to the indictment, Aboagye-Marfo also filed false tax returns on his own behalf that claimed refunds from the IRS to which he was not entitled. 

According to the indictment, Aboagye-Marfo owned and operated People’s Choice Tax Service and National Taxpert, located in Worcester and Hyde Park, respectively.  Aboagye-Marfo used other individuals to recruit taxpayers for their personal identifying and related information so that he could use the information to file false tax returns on their behalf.  In some cases, Aboagye-Marfo obtained only the personal identifying information of individual taxpayers and filed tax returns that claimed false Schedule C businesses, regardless of the individual’s income or employment status, qualifying that individual for large tax refunds.  In some instances, Aboagye-Marfo also reported false dependents on the tax returns.  Aboagye-Marfo charged a fee for his services and he also claimed a portion of the false tax refund proceeds for himself.

Sentencing is scheduled for May 15 before U.S. District Court Judge George A. O’Toole.  Aboabye-Marfo faces a statutory maximum sentence of five years in prison and a $250,000 fine for each count. 

This case was investigated by the special agents of IRS - Criminal Investigation.  Trial Attorney Jeffrey B. Bender and Assistant Chief Karen Kelly of the Justice Department’s Tax Division are prosecuting the case.

Two San Jose, California, brothers were sentenced to prison for committing tax fraud and bank fraud,  Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Melinda Haag of the Northern District of California announced. 

Fidencio Moreno, 52, was sentenced to serve 41 months in prison and three years of supervised release, and Arturo Moreno, 38, was sentenced to serve 28 months in prison and three years of supervised release.  The court also ordered Arturo Moreno to pay $422,962 in restitution and to forfeit $3,328,600 and his interest in two pieces of real property.  In January 2015, Elena Moreno, 40, the wife of Fidencio Moreno, was sentenced to serve 22 months in prison and three years of supervised release for her role in the conspiracies as a bookkeeper at the company.  Prior to pleading guilty in this case, the three co-defendants collectively paid more than $200,000 in restitution to the Internal Revenue Service (IRS) for losses associated with their conspiracy to defraud the United States by filing false and fraudulent tax returns.

According to court documents, beginning in 2005 and continuing through at least 2010, Arturo, Fidencio and Elena Moreno conspired to defraud the United States by failing to report substantial amounts of gross receipts from their charter bus company, Quality Assurance Travel (QAT), on the federal corporate tax returns for QAT and on their personal income tax returns that they filed with the IRS.  The total amount of unreported gross receipts of QAT during those years exceeded $966,908.  Arturo and Fidencio Moreno were each 50 percent owners of QAT.  The unreported income consisted primarily of cash receipts that were paid by passengers as they boarded the bus, but that were not deposited into the business bank accounts or disclosed to the Morenos’ tax return preparer.

According to court documents, between 2005 and July 2013, Arturo, Elena and Fidencio Moreno also conspired to commit bank fraud and wire fraud by submitting false and fraudulent home mortgage loan applications that overstated the applicants’ income and assets in order to acquire and refinance homes located in San Jose.  In total, the defendants fraudulently obtained more than $3.3 million in home loans.  After the defendants fell behind on the loan payments, they attempted to avoid foreclosure by submitting false and fraudulent applications to modify these loans.  Two of the financial institutions approved the fraudulent applications, reducing the principal due on these loans.  One of the four properties was ultimately sold via a short sale in 2013, while another was foreclosed upon in 2014.  The total losses to the financial institutions resulting from the foreclosure and short sale exceeded $325,000.

The case was investigated by special agents of IRS-Criminal Investigation.  Trial Attorney Todd P. Kostyshak of the Tax Division and Assistant U.S. Attorneys Thomas Moore and Katherine Wong prosecuted the case. 

A former sergeant from the Police of Puerto Rico (POPR) was sentenced today to serve 101 months in prison for his involvement in a July 2012 home invasion robbery in Bayamon, Puerto Rico.  A second former POPR officer was also sentenced today to serve 24 months in prison for lying to federal agents about his role in the same robbery and for his participation in a second, unrelated robbery.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico made the announcement.

Jorge Fernandez-Aviles, 49, of Carolina, Puerto Rico, pleaded guilty on Oct. 7, 2014, to robbery and firearms charges, and was sentenced to 101 months in prison today.  According to admissions made in connection with his guilty plea, on July 14, 2012, Sergeant Fernandez and other POPR officers, armed with their POPR weapons, robbed a house in Bayamon.  They drove to the robbery in a marked patrol car loaned to them by a POPR officer.  Upon entering the house, the officers identified themselves as police, falsely claimed they were executing a search warrant, and searched and detained the individuals who were present.  They then stole money and cocaine.  Fernandez-Aviles later received payment from the proceeds of the sale of the stolen cocaine for his participation in the robbery.

Former POPR Officer Alexander Mir-Hernandez, 40, of Carolina, Puerto Rico pleaded guilty on Oct. 3, 2014, to making false statements to federal agents and to a separate civil rights crime in connection with a December 2013 robbery, and was sentenced to serve 24 months in prison today.  According to admissions made in connection with his guilty plea, when he was interviewed by FBI agents in June 2014, Mir made several false statements and falsely denied providing the patrol car that was used to commit the July 2012 robbery.  Mir also admitted to stealing thousands of dollars in drug trafficking proceeds from a money courier at Luis Munoz Marin International Airport in December 2013 while he was on duty as a POPR officer.  

Both defendants were sentenced by U.S. District Judge José Antonio Fusté of the District of Puerto Rico.  The remaining four defendants are scheduled to be sentenced in February and March 2015.

This case was investigated by the FBI’s San Juan Division.  The case is being prosecuted by Trial Attorneys Heidi Boutros Gesch and Brian K. Kidd of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana Bauzá of the District of Puerto Rico.

Attorney General Eric Holder announced today that the Department of Justice and 19 states and the District of Columbia have entered into a $1.375 billion settlement agreement with the rating agency Standard & Poor’s Financial Services LLC, along with its parent corporation McGraw Hill Financial Inc., to resolve allegations that S&P had engaged in a scheme to defraud investors in structured financial products known as Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs).  The agreement resolves the department’s 2013 lawsuit against S&P, along with the suits of 19 states and the District of Columbia.  Each of the lawsuits allege that investors incurred substantial losses on RMBS and CDOs for which S&P issued inflated ratings that misrepresented the securities’ true credit risks.  Other allegations assert that S&P falsely represented that its ratings were objective, independent and uninfluenced by S&P’s business relationships with the investment banks that issued the securities.

The settlement announced today is comprised of several elements.  In addition to the payment of $1.375 billion, S&P has acknowledged conduct associated with its ratings of RMBS and CDOs during 2004 to 2007 in an agreed statement of facts.  It has further agreed to formally retract an allegation that the United States’ lawsuit was filed in retaliation for the defendant’s decisions with regard to the credit of the United States.  Finally, S&P has agreed to comply with the consumer protection statutes of each of the settling states and the District of Columbia, and to respond, in good faith, to requests from any of the states and the District of Columbia for information or material concerning any possible violation of those laws.

“On more than one occasion, the company’s leadership ignored senior analysts who warned that the company had given top ratings to financial products that were failing to perform as advertised,” said Attorney General Holder.  “As S&P admits under this settlement, company executives complained that the company declined to downgrade underperforming assets because it was worried that doing so would hurt the company’s business.  While this strategy may have helped S&P avoid disappointing its clients, it did major harm to the larger economy, contributing to the worst financial crisis since the Great Depression.”

Attorney General Holder was joined in announcing the settlement with Acting Associate Attorney General Stuart F. Delery, Acting Assistant Attorney General for the Civil Division Joyce R. Branda and Acting U.S. Attorney for the Central District of California Stephanie Yonekura.  Also joining the Department of Justice in making this announcement are the attorneys general from Arizona, Arkansas, California, Connecticut, Colorado, Delaware, Idaho, Illinois, Indiana, Iowa, Maine, Mississippi, Missouri, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee, Washington and the District of Columbia.

“This resolution provides further proof that the Department of Justice will vigorously pursue investigations and litigation, no matter how challenging, to protect the best interests of the American people,” said Acting Associate Attorney General Delery.  “As part of the resolution, S&P admitted facts demonstrating that it misrepresented itself to investors and the public, allowing the pursuit of profits to bias its ratings.  S&P also agreed to retract its unsubstantiated claim that this lawsuit was initiated in retaliation for the decisions S&P made about the credit rating of the U.S. government.  Today's announcement is the latest result of our dedicated effort to address misconduct of every kind that contributed to the financial crisis.”

“Today’s historic settlement demonstrates that we will use all of our resources and every legal tool available to hold accountable those who commit financial fraud,” said Acting Assistant Attorney General Branda.  “Thanks to the tireless efforts of our team in Washington and California, S&P has not only paid a record-setting penalty, but has now admitted to the American people facts that make clear its own unlawful role in the financial crisis.”

Half of the $1.375 billion payment – or $687.5 million – constitutes a penalty to be paid to the federal government and is the largest penalty of its type ever paid by a ratings agency.  The remaining $687.5 million will be divided among the 19 states and the District of Columbia.  The allocation among the states and the District of Columbia reflects an agreement between the states on the distribution of that money.

In its agreed statement of facts, S&P admits that its decisions on its rating models were affected by business concerns, and that, with an eye to business concerns, S&P maintained and continued to issue positive ratings on securities despite a growing awareness of quality problems with those securities. S&P acknowledges that:

• S&P promised investors at all relevant times that its ratings must be independent and objective and must not be affected by any existing or potential business relationship;
   
• S&P executives have admitted, despite its representations, that decisions about the testing and rollout of updates to S&P’s model for rating CDOs were made, at least in part, based on the effect that any update would have on S&P’s business relationship with issuers;
   
• Relevant people within S&P knew in 2007 many loans in RMBS transactions S&P were rating were delinquent and that losses were probable;
   
• S&P representatives continued to issue and confirm positive ratings without adjustments to reflect the negative rating actions that it expected would come.

In addition, S&P acknowledges that the voluminous discovery provided to S&P by the United States in the litigation does not support their allegation that the United States’ complaint was filed in retaliation for S&P’s 2011 decisions on the credit rating of the United States.  S&P will formally retract that claim in the litigation.

“S&P played a central role in the crisis that devastated our economy by giving AAA ratings to mortgage-backed securities that turned out to be little better than junk,” said Acting U.S. Attorney Yonekura.  “Driven by a desire to increase profits and market share, S&P blessed innumerable securitizations that were used by aggressive lenders to offload the risks of billions of dollars in mortgage loans given to homeowners who had no ability to pay them off.  This conduct fueled the meltdown that ultimately led to tens of thousands of foreclosures in my district alone.  This historic settlement makes clear the consequences of putting corporate profits over honesty in the financial markets.”

Today’s settlement was announced 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 including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

The Justice Department announced today that it has asked a federal court in Greenbelt, Maryland, to permanently bar a Silver Spring, Maryland, tax preparer, doing business as Eplanet, Eplanet LLP, Eplanet Corp., and Eplanete Corp., from preparing tax returns for others. 

The government also filed a motion for a preliminary injunction seeking to prevent Komi Gbotcho from filing any returns for the 2014 tax year.

According to the complaint, the Internal Revenue Service (IRS) estimates that Gbotcho, through Eplanet, has prepared more than 1,300 tax returns for the 2010 through 2013 tax years.  The suit alleges that Gbotcho prepared returns claiming false or inflated deductions, such as deductions for personal property rental expenses, unreimbursed employee business expenses and home improvement expenses, without some customers’ knowledge.  The suit contends that the false and inflated deductions generated larger refunds for Gbotcho’s customers than they were entitled to receive, and that the losses to the U.S. Treasury could amount to as much as $3.4 million.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015.  The IRS has some tips on their website for choosing a tax preparer.  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 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.      

The Justice Department announced today that it has reached settlement agreements with the cities of DeKalb, Illinois; Vero Beach, Florida; Fallon, Nevada; and Isle of Palms, South Carolina.  The agreements resolve investigations of each city under Title I of the Americans with Disabilities Act (ADA).  The investigations found that each city’s online employment application asked questions about disabilities in violation of the ADA.  The ADA does not permit employers to inquire as to whether an applicant is an individual with a disability or as to the nature of such disability before making a conditional offer of employment.  Under Section 503 of the Rehabilitation Act of 1973, however, federal contractors subject to affirmative action requirements may invite an applicant voluntarily to self-identify as an individual with a disability, consistent with certain requirements. 

The investigations also found that each city’s online employment opportunities website or job applications were not fully accessible to people with disabilities, such as those who are blind or have low vision, are deaf or hard of hearing, or have physical disabilities affecting manual dexterity (such as limited ability to use a mouse).  In recent months, the department reached similar settlement agreements with the city of Hubbard, Oregon, and Florida State University. 

“Congress intended for people with disabilities to be able to compete for jobs on a level playing field,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “Including disability-based questions on a job application is illegal and creates barriers for people with disabilities.  These agreements ensure that people with disabilities will have an equal chance to compete for public sector jobs.  We commend each city for its cooperation and efforts to ensure accessibility and fairness in the job application process.”   

Under the settlement agreements, each city agrees to ensure that its hiring policies and procedures do not discriminate against any applicant on the basis of disability, including by:

• not conducting a medical examination or making a disability-related inquiry of a job applicant before a conditional offer of employment is made;

• not requiring a medical examination or making inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity;

• maintaining the medical or disability-related information of applicants and employees in separate, confidential medical files;

• training employees who make hiring or personnel decisions on the requirements of the ADA, designating an individual to address ADA compliance matters, and reporting on compliance; and

• ensuring that its online employment opportunities website and job applications conform with the Web Content Accessibility Guidelines 2.0, which are industry guidelines for making web content accessible.

Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.

Patient Recruiter Sentenced To Two Years In Prison For Participating In The Same Scheme

A South Florida man was sentenced to 10 years in prison today in connection with a long-running $6.2 million Medicare fraud scheme involving Professional Medical Home Health LLC (Professional Home Health), a Miami home health care agency that purported to provide home health and therapy services, as well as similar schemes at two additional Miami home health care agencies.  A second defendant was also sentenced to two years in prison today for his role as a patient recruiter in the fraud scheme at Professional Home Health.

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

Ernesto Fernandez, 48, of Miami, pleaded guilty on Nov. 26, 2014, to one count of conspiracy to commit health care fraud.  In addition to the 10-year prison sentence, Fernandez was also ordered to pay $2,163,057 in restitution and to forfeit $9,061,867, which represents the proceeds traceable to his criminal conduct at all three home health agencies.  Fernandez has been in custody since his bond was revoked on Jan. 30, 2015, for violating the condition of his bond prohibiting contact with victims or witnesses in the case except through counsel. 

According to documents filed with his plea agreement, Fernandez was an owner and operator of Professional Home Heath.  He was also the owner and operator of two other South Florida home health agencies.  At each of these companies, Fernandez and his co-conspirators billed the Medicare program for expensive physical therapy and home health services that were not medically necessary or were not provided.  Fernandez admitted that he caused patient documentation to be falsified, and planned, organized and oversaw the submission of fraudulent claims to the Medicare program. 

Fernandez also admitted to being a patient recruiter for all three home health agencies.  In that capacity, Fernandez recruited patients for the agencies in exchange for kickbacks, knowing that the agencies would bill the Medicare program on behalf of the recruited patients for expensive home health and therapy services that were not medically necessary or not provided.

Juan Valdes, 37, of Palm Springs, pleaded guilty on Nov. 10, 2014, to one count of conspiracy to defraud the United States and receive health care kickbacks.  In addition to the two-year prison sentence, Valdes was also ordered to pay 204,526 in restitution. 

According to documents filed with his plea agreement, Valdes was a patient recruiter for Professional Home Health.  In that role, he solicited kickbacks and bribes from the owners and operators of Professional Home Health in exchange for providing beneficiaries to allow Professional Home Health to bill Medicare for home health services that were not medically necessary or not provided. 

Fernandez and Valdes are the seventh and eighth defendants to be sentenced in connection with the fraudulent schemes at Professional Home Health.  Dennis Hernandez and Jose Alvarez, both owners and operators of Professional Home Health, were each sentenced to 10 years in prison on Jan. 29, 2015.  Joel San Pedro, a manager and supervisor of Professional Home Health, was sentenced to 97 months in prison on Jan. 29, 2015.  Annarella Garcia, an owner of Professional Home Health, was sentenced to 70 months in prison on Aug. 27, 2014.  Annilet Dominguez, an administrator of Professional Home Health, was sentenced to 68 months in prison on Sept. 29, 2014.  Alina Hernandez, a patient recruiter for Professional Home Health, was sentenced to two years in prison on Jan. 29, 2015.  

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  This case is being prosecuted by Trial Attorney Anne P. McNamara of the Criminal Division’s Fraud Section.

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

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

A former senior federal contracting officer was arrested this morning for conspiracy to commit bribery in connection with his alleged role in a scheme to steer contracts and benefits to Glenn Defense Marine Asia (GDMA), a defense contracting firm headquartered in Singapore.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General of Investigations James B. Burch of the Department of Defense (DCIS) made the announcement. 

“Today’s arrest in this ongoing investigation demonstrates our continued resolve to root out all of the corrupt officials involved in this bribery scheme,” said Assistant Attorney General Caldwell.  “As alleged, Paul Simpkins misused his position as a contracting officer at the U.S. Navy to obtain bribes of cash, air travel, hotel rooms, and prostitutes, and his actions tarnish the reputation earned by the vast majority of U.S. Navy officers and enlisted and civilian personnel.”

“With the arrest of Paul Simpkins, who was recently among the Defense Department’s high ranking civilians we have uncovered yet another tentacle of this pervasive bribery scheme,” said U.S. Attorney Duffy.  “The more we learn about the extent of the greed and corruption, the more determined we are to eviscerate it.”

“As we've mentioned previously, the GDMA investigation is far from over,” said Director Traver.  “NCIS will follow the evidence wherever it leads, to bring to justice those who were involved in perpetrating this massive fraud on the Department of the Navy and the American taxpayer.  Active leads remain and NCIS will stay on the case until our work is done.”

“As the filing of today's Criminal Complaint and subsequent arrest of Paul Simpkins shows, the Defense Criminal Investigative Service and its law enforcement partners will continue to identify and investigate those individuals who seek to defraud the U.S. taxpayer," said Deputy Inspector General of Investigations Burch.  “Any individual, regardless of position, who allowed Glenn Defense Marine Asia Ltd. to prosper at the expense of the American taxpayer, will be brought to justice.”

Paul Simpkins, 60, of Haymarket, Virginia, is the latest individual to be arrested in connection with a corruption probe involving the U.S. Navy, GDMA, and its owner, Leonard Glenn Francis.  At this morning’s hearing, United States Magistrate Judge Jones of the Eastern District of Virginia ordered Simpkins to be detained pending a bond hearing set for Feb. 4, 2015.  To date, seven individuals, including Francis, and GDMA have entered guilty pleas as part of the investigation.  

According to a criminal complaint unsealed today, Simpkins held several manager-level contracting positions throughout the federal government, including Supervisory Contract Special at the U.S. Navy Regional Contracting Center in Singapore from April 2005 through June 2007, and manager in the Department of Defense’s Office of Small Business Programs from December 2007 to August 2012.  The complaint alleges that between May 2006 and September 2012, Simpkins accepted several hundred thousand dollars in cash and wire transfers, travel and entertainment expenses, hotel rooms and the services of prostitutes.  In return, Simpkins allegedly helped steer lucrative U.S. Navy contracts to Francis and GDMA, advocated for and advanced the interests of GDMA in contract disputes, and assisted in preventing GDMA’s competitors from receiving U.S. Navy business. 

The complaint specifically alleges that, beginning in early 2006, Simpkins and Francis held a series of meetings at a hotel in Singapore in which Francis agreed to provide Simpkins with things of value in return for help in steering lucrative ship husbanding contracts to GDMA.  Specifically, the complaint alleges that Francis paid Simpkins by hand-delivering over $150,000 in cash and by making several wire transfers to a bank account held in the name of Simpkins’s wife at the time.  To conceal the true nature of the wire transfers, Simpkins allegedly used an email account belonging to his mistress to advise Francis of the routing and account information of the bank account belonging to his wife.    

In return for the things of value, Simpkins allegedly used his influence within the U.S. Navy to benefit GDMA, including by helping GDMA to secure lucrative ship husbanding contracts to service U.S. Navy vessels in Thailand and the Philippines.  In addition, Simpkins allegedly interceded on GDMA’s behalf in contract disputes with the U.S. Navy.  The complaint specifically alleges that in 2006, Simpkins’s subordinate recommended that GDMA’s husbanding contract in Thailand not be extended due to “many exceedingly high cost” items.  Simpkins allegedly overruled his subordinate and extended GDMA’s contract. 

In another example, Simpkins allegedly instructed U.S. Navy officials in Hong Kong to discontinue the use of meters that monitored the volume of liquid waste that GDMA removed from U.S. Navy ships under its husbanding contracts.  The use of these meters would have ensured proper accounting of the actual amount of waste removed to ensure that no overbilling occurred.  Simpkins also allegedly instructed a U.S. Navy official not to review invoices that GDMA submitted in connection to a recent port call in Hong Kong after Francis complained that U.S. Navy personnel were asking questions.      

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

The ongoing investigation is being conducted by NCIS and DCIS.The case is being prosecuted by Director of Procurement Fraud Catherine Votaw and Senior Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Robert S. Huie of the Southern District of California.

Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

The U.S. District Court for the District of New Hampshire entered a consent decree of permanent injunction against Atrium Medical Corporation (Atrium), Maquet Holding B.V. & Co. KG (Maquet), Maquet Cardiovascular LLC (Maquet CV), Maquet Cardiopulmonary AG (Maquet CP), Heinz Jacqui and Gail Christie to prevent the distribution of adulterated and misbranded medical devices, the Department of Justice announced today. 

The department filed a complaint on Feb. 3 in the U.S. District Court for the District of New Hampshire, at the request of the U.S. Food and Drug Administration (FDA), alleging that defendants introduced adulterated and misbranded medical devices into interstate commerce.  According to the complaint, Atrium manufactures medical devices for cardiovascular-related uses, including chest drains, surgical meshes, vascular grafts and stent systems.

The FDA’s Quality System (QS) regulation sets forth current good manufacturing practice requirements for medical devices.  The QS regulation governs the methods used in, and the facilities and controls used for, the design, manufacture, packaging, labeling, storage, installation and servicing of all finished devices intended for human use.  The regulation is intended to ensure that finished devices will be safe and effective and otherwise in compliance with the federal Food, Drug and Cosmetic Act (FDCA).  A medical device that has been manufactured, packed, stored or installed in violation of the QS regulation is deemed to be adulterated.     

“The American public needs to have the confidence that medical devices on the market are safe and effective,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “The failure to comply with the quality system regulation for medical devices can pose a serious risk to the public health.”

According to the complaint, Atrium manufactures its medical devices at a facility in Hudson, New Hampshire.  As set forth in the complaint, Maquet CV has a manufacturing facility in Wayne, New Jersey; Maquet CP has manufacturing facilities in Hechingen and Rastatt, Germany; and Maquet manages quality operations for the corporate defendants: Heinz Jacqui has been Maquet’s Chief Executive Officer and Managing Director since April 2012 and Gail Christie has been Maquet’s Corporate Chief Quality Assurance/Regulatory Affairs and Compliance Officer since October 2013. 

According to the complaint, FDA inspections of Atrium’s New Hampshire facility revealed deviations from current good manufacturing practice requirements for medical devices.  Specifically, the complaint alleges that during a 2013 inspection, FDA observed numerous deviations from regulations for medical devices, including a failure of the company to establish and maintain procedures for implementing corrective and preventive action.  As alleged in the complaint, the violations of the QS regulation observed in 2013 were similar to observations FDA made in separate inspections in September 2012, March 2010, and March 2009. 

In addition, according to the complaint, as part of the 2013 inspection of Atrium’s manufacturing facility, FDA documented a violation of the Medical Device Reporting regulation given the company’s failure to submit a medical device report within 30 days of receiving or otherwise becoming aware of information that reasonably suggested that a marketed device may have caused or contributed to a death or serious injury.

The complaint also alleges that FDA performed inspections at the Maquet CV’s and Maquet CP’s manufacturing facilities, and documented numerous violations of the QS regulation for medical devices.

In conjunction with the filing of the complaint, all of the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction, which requires the defendants to come into compliance with the FDCA and remedy past deficiencies in their current good manufacturing practices.  The consent decree requires that Atrium’s manufacturing facility in Hudson, New Hampshire, be shut down (with limited exceptions) until corrective actions described in the consent decree are completed.  Corrective actions include addressing the deficiencies previously identified by FDA. 

Under the consent decree, Atrium is permitted to continue to manufacture and distribute certain medical devices deemed to be medically necessary.  In order to do so, the defendants must comply with specific notification and other provisions in the consent decree.  The consent decree also provides that the corporate defendants shall pay the United States $6 million in equitable disgorgement within 28 days after the entry of the consent decree. 

“Patients must be assured that medical devices are safe, effective and high quality,” said Jan Welch, Acting Director of the Office of Compliance in the FDA’s Center for Devices and Radiological Health.  “The FDA will remain vigilant in bringing companies that do not meet our regulatory requirements back to a sustainable state of compliance.”

The government is represented by Trial Attorney Dan Baeza of the Civil Division’s Consumer Protection Branch, with the assistance from Assistant U.S. Attorney Michael McCormack of the District of New Hampshire and Assistant Chief Counsel Shannon Singleton of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.

An Army National Guard official pleaded guilty today for accepting a $30,000 bribe in exchange for steering a $3.6 million contract to a retired sergeant major of the Minnesota Army National Guard and his consulting company.  Today’s guilty plea is the eighth in connection with an investigation into corruption within the National Guard Bureau related to the awarding of millions of dollars of Army National Guard marketing, retention and recruitment contracts.

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, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office, Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Director Frank Robey of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID) made the announcement.

Jason Rappoccio, 39, of Hampton, South Carolina, pleaded guilty before U.S. District Judge Liam O’Grady of the Eastern District of Virginia to one count of conspiracy to commit bribery and one count of bribery.  Rappoccio was indicted on Sept. 25, 2014, and will be sentenced on May 22, 2015.

According to plea documents, Rappoccio, who was an active duty sergeant first class in the Army National Guard, admitted to accepting a $30,000 bribe from Timothy Bebus, a retired sergeant major of the Minnesota Army National Guard and owner of Mil-Team Consulting and Solutions LLC (Mil-Team).  In exchange, Rappoccio agreed to recommend the award of a $3.6 million contract to Mil-Team and to steer the contract to a Small Business Administration (SBA) 8(a) certified company, chosen by Bebus, that would sub-contract the work to Mil-Team.

Rappoccio admitted that he received the $30,000 bribe in installments to conceal the payment.  Bebus gave $6,000 in cash directly to Rappoccio at a meeting in Arlington, Virginia.  The remaining $24,000 was paid in a cashier’s check in the name of Rappoccio’s wife.

Rappoccio also admitted that days after receiving the $30,000 bribe, he solicited and received airline tickets for two of his family members from Bebus.  Three months later, Rappoccio also received NFL tickets worth $1,328 from another co-conspirator.  At the time that he accepted these additional benefits, Rappoccio agreed to steer an additional $4 million contract to Bebus and his company.

The case is being investigated by the FBI’s Washington Field Office, with assistance from DCIS’s Mid-Atlantic Field Office and Army-CID’s Expeditionary Fraud Resident Agency’s Major Procurement Fraud Unit.  The case is being prosecuted by Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Jonathan Fahey of the Eastern District of Virginia and Assistant U.S. Attorneys Marisa Seifan and Martin Coffey of the Eastern District of New York.

Minebea Co. Ltd., a small sized bearings manufacturer based in Nagano, Japan, has agreed to plead guilty and to pay a $13.5 million criminal fine for its role in a conspiracy to fix prices for small sized ball bearings sold to customers in the United States and elsewhere, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court for the Southern District of Ohio in Cincinnati, Minebea conspired to fix the prices of small sized ball bearings in the United States and elsewhere.  In addition to the criminal fine, Minebea has agreed to cooperate in the department’s ongoing investigation.  The plea agreement is subject to court approval.

According to the charge, Minebea and its co-conspirator discussed and agreed upon prices to be submitted to small sized ball bearings customers.  Minebea’s participation in the conspiracy lasted from at least as early as early-to-mid 2008 and continued until at least October 2011.

“Because of the unlawful price-fixing by the defendant and its co-conspirators, American businesses paid more for small-sized bearings than they otherwise would,” said Bill Baer, Assistant Attorney General of the Department of Justice’s Antitrust Division.  “Working with the Federal Bureau of Investigation and our other law enforcement partners, the Antitrust Division will continue our efforts to ensure American businesses and consumers benefit from competitive markets.”

“Any agreement that restricts price competition violates the law,” said U.S. Attorney Carter Stewart of Southern District of Ohio.  “We will continue to work to protect consumers’ right to free and open competition.”

Bearings are used in industry in numerous products to reduce friction and help parts roll smoothly past one another; they “bear” the load.  Small sized ball bearings are those ball bearings whose outside diameter is 26 millimeters or less.

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

The charge today is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the bearings industry, which is being conducted by the Antitrust Division’s Chicago Office and the FBI’s Cincinnati Field Office.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the bearings industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Cincinnati Field Office at 513-421-4310.

The Justice Department announced today the launch of an educational video reminding employers that Salvadorans with Temporary Protected Status (TPS) may continue working beyond the March 9, 2015, expiration date of their employment authorization documents.  The Justice Department also cautions employers that requesting additional work-authorization documents from these workers may violate anti-discrimination law.

Released by the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), the video explains that the Department of Homeland Security automatically extended the validity of employment authorization documents for Salvadorans with TPS for an additional six months.  Requesting additional work-authorization documents from these employees may violate the anti-discrimination provision of the Immigration and Nationality Act.  This provision prohibits employers from making additional and unauthorized documentary demands because of an employee’s citizenship status, immigration status or national origin when verifying or re-verifying an employee’s employment eligibility. 

The newly released video may be viewed at https://www.youtube.com/watch?v=9B3RKCX6dkM.

“We hope this video will prevent discrimination against work-authorized immigrants and help employers across the country understand employment eligibility verification rules,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “Federal law prohibits discrimination in the employment eligibility verification process, and the Justice Department is committed to enforcing the law.”

TPS is a temporary immigration benefit that allows qualified individuals from designated countries who are in the United States to stay and work for a limited period of time.  A foreign country is designated for TPS due to conditions in the country that temporarily prevent the country’s nationals from returning safely, such as on-going armed conflict, environmental disasters or other extraordinary and temporary conditions in the designated country.  Individuals with TPS can obtain employment authorization documents to work legally in the United States.  The Department of Homeland Security has automatically extended employment authorization documents for individuals with TPS from El Salvador until Sept. 9, 2015. 

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) within the Justice Department is responsible for enforcing the anti-discrimination provision of the Immigration and Nationality Act.  Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, and recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation. 

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

The Department of Justice announced today that it will not challenge a proposal by the Institute of Electrical and Electronics Engineers, Inc. (IEEE) to update the IEEE Standards Association’s (IEEE-SA) patent policy.  That policy governs the incorporation of patented technology in IEEE standards and explains the terms under which holders of patents essential to IEEE standards commit to make licenses available for use in implementing IEEE standards.  

The department’s position was stated in a business review letter to counsel for IEEE and IEEE-SA from Renata B. Hesse, Acting Assistant Attorney General for the Antitrust Division for this matter.

IEEE requested a business review letter from the Antitrust Division expressing its enforcement intentions regarding a proposed update to its patent policy.  According to representations made by the applicant, the update revises the policy’s provisions regarding commitments from parties holding patent claims that are essential to IEEE-SA standards to license those claims on reasonable and non-discriminatory (RAND) terms.  The update addresses the availability of injunctive relief, the meaning of a reasonable licensing rate, permissible requests for reciprocal licensing, and the production levels to which the commitment applies.

Standards can offer significant procompetitive benefits.  For example, they may facilitate product interoperability, lower costs, foster innovation and efficiency, and increase competition among technologies for inclusion in standards.  The stated purpose of the IEEE’s update is to add clarity to the commitment patent holders voluntarily make regarding the licensing of patent claims essential to IEEE standards on RAND terms. 

The department supports standards setting organizations’ efforts to clarify their patent licensing policies,” said Acting Assistant Attorney General Hesse.  “IEEE’s decision to update its policy, if adopted by the IEEE Board, has the potential to help patent holders and standards implementers to reach mutually beneficial licensing agreements and to facilitate the adoption of pro-competitive standards.  Where, as here, the department does not believe that adoption of a policy change is likely to result in harm to competition, IEEE and other standards setting organizations are free to adopt those modifications to their policies that they believe will benefit their standards setting activities.  The U.S. government does not dictate patent policy choices to private standards setting organizations."

The department issued similar guidance to VITA in 2006 and to IEEE in 2007 regarding changes to their patent policies that allowed patent holders to commit publicly to specific restrictions on their future licensing terms and conditions for the use of essential patents.

Under the department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided.  The department reserves the right to challenge the proposed action under the antitrust laws if it produces anticompetitive effects.

A file containing the business review request and the department’s response may be examined in the Antitrust Documents Group of the Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530.  After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure.

President Obama’s FY 2016 budget proposal totals $28.7 billion for the Department of Justice to support federal law enforcement priorities and the criminal justice priorities of our state, local and tribal law enforcement partners.  The request represents a comprehensive investment in the Justice Department’s mission and includes increases in funding for countering violent extremism and other national security areas, civil rights and advancing equality under the law, Smart on Crime activities, including increased funds for prisoner reentry initiatives, and other key enforcement initiatives.  The request represents a $1.3 billion increase over the comparable FY 2015 enacted level.

“The Department of Justice is dedicated to advancing the safety, the security, and the rights of all Americans – and the vital investments detailed in the department’s FY 2016 budget reflect that commitment,” said Attorney General Eric Holder.  “From our global efforts to safeguard the American people against terrorist attacks and prevent violent extremism, to the work we are doing through the Smart on Crime initiative to make our criminal justice system more fair and more effective, to our ongoing focus on building trust between law enforcement officers and the communities they serve, we are working every day to protect the American people and extend this nation’s promise of equal justice under law.  And as we move forward – with the resources outlined in this budget proposal – the Department of Justice will build on its groundbreaking work to strengthen our communities, to preserve our cherished values, and to build the safer, more just society that all Americans deserve.”

The Department of Justice’s areas of investment include:

• +$65 million for the department’s law enforcement components, including the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Marshals Service, and the Organized Crime Drug Enforcement Task Force program.
   
• +$125 million for our litigating components, including the U.S. Attorneys, National Security Division, Criminal Division, Civil Rights Division, Civil Division, and the Environment and Natural Resources Division.
   
• +$217 million for the prisons and detention functions of the Federal Bureau of Prisons.
   
• +$146 million for immigration and administration, technology, and other support functions, including the Executive Office for Immigration Review, Office of the Pardon Attorney, Office of the Inspector General, Community Relations Service, General Administration, and Justice Information Sharing Technology.
   
• +$154 million for DOJ grant programs overall (Office of Justice Programs, Office of Community Oriented Policing Services, and Office on Violence Against Women), for a total grant program request of $2.4 billion.

National Security

Defending U.S. citizens from both internal and external threats remains the department’s highest priority.  National security threats are constantly evolving, requiring additional investments to adapt to those threats in innovative ways.  The FY 2016 budget request provides $106.8 million in program increases to develop the department’s capacity in a number of critical national security areas including: countering violent extremism and domestic radicalization; counterterrorism; cybersecurity both domestic and abroad; information sharing and collaboration with the intelligence community; and training and technical assistance for our foreign partners. 

The FY 2016 request supports a comprehensive national security strategy that includes countering violent extremism (CVE) and cybersecurity.  Through grants provided by the Office of Justice Programs and the Community Oriented Policing Services, the department will foster community-led CVE efforts and emphasize trusted partnerships between public safety agencies and local residents and community organizations.  Funding is also requested to build upon recent cyber investments that address computer intrusions and defend the security of the department’s critical information networks from cyber threats. 

To maintain its role as a national security leader, the department must continue to improve its coordination with both domestic and foreign partners through training and technical assistance.  The FY 2016 request includes resources for both the FBI and Drug Enforcement Administration to enhance collaboration with the intelligence community through improved IT infrastructure and counterintelligence programs.  In addition, the FY 2016 request includes resources for improving the process of sharing evidence with our foreign partners, coordinated investigations, and operating overseas security sector assistance programs. The department’s foreign experts are best situated to build the strong overseas partnerships that are essential to joint efforts to fight terrorism and transnational crime.

For more information, view the National Security Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.

Civil Rights

The department’s mission is to uphold the civil and constitutional rights of all Americans, particularly the most vulnerable members of our society—thus extending equality under the law to all Americans.  Accomplishing this requires resources both to investigate and to litigate.

Protecting the nation’s most vulnerable populations is a top priority of this Administration and the department. These issues remain a highly relevant to the American people and a significant focus of both the Civil Rights Division and the Community Relations Service.  The FY 2016 request includes $102.8 million in new investments addressing ongoing and growing threats of human trafficking, hate crimes, and campus sexual assaults.  The request includes funds to expand civil and criminal enforcement efforts to ensure that all communities have effective and democratically accountable policing.

Our request supports the health of our democracy by augmenting our Voting Rights Act enforcement to protect each citizen’s fundamental right to vote.  Further, our request creates a sustainable and lasting legacy of civil rights enforcement in U.S. Attorneys Offices and the coordination of our efforts with state and local partners across the nation.

Increases for grant programs will provide technical assistance and training to improve the public’s access to counsel and legal assistance in state, local, and tribal courts and juvenile justice systems.  The resources will also help to implement the recommendations of the White House Task Force to Protect Students from Sexual Assault and assist law enforcement agencies on criminal justice issues, including use of force practices and the deployment of crisis intervention teams.

For more information, view Civil Rights Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.

Smart on Crime

In total, our budget invests an additional $247 million to support Smart on Crime initiatives. At the direction of the Attorney General, in early 2013 the Justice Department launched a comprehensive review of the criminal justice system in order to identify reforms that would ensure federal laws are enforced fairly and—in an era of reduced budgets—efficiently.  As part of its review, the department studied all phases of the criminal justice system, including charging, sentencing, incarceration, and reentry, to identify the practices that are successful at deterring crime and protecting the public.

We must remain vigilant in our efforts to stop violent crime.  However, for far too long, well-intentioned policies created to lower criminal activity perpetuated a cycle of poverty, criminality, and incarceration that broke too many families and weakened too many communities. The Smart on Crime initiative focuses on effectively using federal resources for the most important law enforcement priorities, addressing the disparate impact of the criminal justice system on vulnerable communities, and implementing a series of commonsense reforms to create a fundamental shift in response to certain crimes—particularly low-level, nonviolent offenses.  The new guidance also bolstered prevention and reentry programs to deter crime, reduce recidivism, and create pathways of opportunity for eligible candidates.

The Attorney General’s plan focuses federal resources and places the harshest sentences on the most violent offenders rather than prioritizing the sheer number of prosecutions.  Considering alternatives to incarceration for low-level, non-violent offenses also strengthens our justice system and places a lower financial burden on the budget.  This means increased use of diversion programs, such as drug courts, that reduce taxpayer expense and have the potential to be successful at preventing recidivism.  Even when imprisonment is appropriate, sentencing should reflect the individualized circumstances of the case.

We must also pay attention to what happens to inmates after prison.  To better prevent recidivism, it is important to reduce barriers to reentry for formerly incarcerated individuals.  This includes emphasizing reentry programs, and revisiting rules and regulations that make it harder for these individuals to find a job, an education, or affordable housing. 

For more information, view the Smart on Crime Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.

Prisons and Detention

Maintaining safe and secure detention and prison facilities, while investing in ways to reduce recidivism, is critical to the department’s ongoing efforts to reform the criminal justice system and be Smart on Crime.  To continue this commitment, the department requests $217 million in program increases for prisons and detention.

The Administration is committed to a comprehensive strategy to contain incarceration costs over the long term by facilitating inmates’ transition into society in order to reduce recidivism rates, increase public safety, and strengthen communities.  The budget reflects these commitments and takes steps to address the cycle of incarceration by investing additional resources in the BOP re-entry programs for the approximately 45,000 federal inmates that return to our communities each year.  

The request increases staffing at BOP’s 17 high security institutions.  The request would provide funding to have two correctional officers on duty in each housing unit for all three shifts, increasing officer and inmate safety at high security institutions.  The request also funds additional medical beds at Federal Correctional Institution Fort Worth that will house and treat severely ill inmates currently housed in community hospitals.  Finally, the request also increases funding for BOP to undertake essential rehabilitation, modernization, and renovation of BOP institutions, one third of which are 50 years old or older.  Adequately maintaining structures preserves capital investments and ensures sufficient security within institutions.

For more information, view the Prisons and Detention Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.

Immigration 

The department plays an integral role in the immigration system by ensuring the fair, expeditious, and uniform application of the Nation’s immigration laws. The department’s Executive Office for Immigration Review (EOIR) oversees the immigration court and Board of Immigrant Appeals.  In recent years, in response to the Department of Homeland Security’s (DHS) increased enforcement efforts along the borders, EOIR has sought to keep pace with the rising number of immigration cases, in order to maintain the effectiveness and efficiency of immigration enforcement, adjudication and detention programs.  But EOIR’s immigration court caseload continues to increase to record levels.

To process this increasing workload and improve the efficiency of the immigration court system, the Department requests an increase of $124 million to support additional Immigration Judge (IJ) Teams and Board of Immigration Appeals attorneys and provide for other improvements to the immigration system.  This enhancement will help IJ Teams and attorneys adjudicate rising immigration caseloads resulting from the increase in Southwest Border crossings.  Also included in this program increase are funds to expand legal representation for unaccompanied children and to improve efficiencies in immigration court proceedings by expanding the Legal Orientation Program.

For more information, view the Immigration Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.

Enforcement Priorities

The department’s mission and responsibility is to investigate and punish those who break federal laws and harm innocent citizens.  Continued investments to uphold its commitments and obligations are needed to strengthen the department’s ability to protect the health and well-being of our nation’s citizens, and have the flexibility to address threats as they emerge; simply maintaining existing law enforcement capacity is not sufficient.  For FY 2016, the department requests $43 million in additional investments to address violent crime and illicit drugs, along with health care fraud and environmental crime. 

For more information, view the Enforcement Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.

State, Local and Tribal Law Enforcement

The department strongly supports its partnerships with state, local, and tribal entities. 
The FY 2016 budget maintains its commitments to state, local, and tribal law enforcement partners without reducing the department’s federal operational role.  Simultaneously, efficiencies are identified to ensure that federal resources are being targeted to the most effective grant programs. 

The FY 2016 discretionary and mandatory request for state, local, and tribal law enforcement assistance is $3.5 billion.  The request for state, local, and tribal assistance includes $15 million for implementation of the Administration’s Countering Violent Extremism Initiative, discussed under National Security above.  The budget also targets $97 million for the President’s new Community Policing Initiative to build and sustain trust between law enforcement and the people they serve.  Both the Office of Community Oriented Policing Services (COPS) and Office of Justice Programs (OJP) budgets include enhancements to support these two initiatives.

The request also includes $249.5 million for the Community Oriented Policing Services (COPS) Hiring Program and a $14 million increase to the Office on Violence Against Women Campus Violence Program.

For more information, view the State, Local and Tribal Law Enforcement Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.

Public Safety in Indian Country

The United States has a unique legal and political relationship with American Indian tribes and Alaska Native communities as provided by the Constitution, treaties, court decisions and federal statutes.  The Department of Justice has an important legal and moral responsibility to prosecute violent crime in Indian Country because under current law, in much of Indian Country, the department alone has the authority to seek an appropriate sentence when a major crime has been committed.  Federal investigation and prosecution of serious violent crime in Indian Country is often both the first and only avenue of protection for the victims of these crimes.

The FY 2016 President’s budget requests $417 million in total resources for public safety initiatives in Indian Country.  Investments include significant and versatile grant funding for addressing a range of criminal justice issues, among which is a $5 million request for a new Tribal Domestic Violence Criminal Jurisdiction program authorized by Congress in the Violence Against Women Reauthorization Act of 2013.  This program would provide grants to tribal governments and their designees to support tribal efforts to exercise special domestic violence criminal jurisdiction over non-Indian offenders who commit violence against Indian spouses, intimate partners or dating partners, or who violate protection orders, in Indian Country.   

For more information, view the Public Safety in Indian Country Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.

Infrastructure

In order to maintain an effective and efficient Department of Justice, the department must invest in its physical and non-physical infrastructure to support its investigative and prosecutorial enterprises.  The department’s request addresses gaps in critical infrastructure including information technology systems, facility construction and maintenance, litigation support services, operational oversight and other investments.

The investments requested for FY 2016 build on many DOJ investments already made and will allow the department to make significant strides in several areas.  With these investments, the department will be able to make forward progress in consolidating its data centers, reduce the significant backlog for U.S. Marshals Service construction projects in federal courthouses, direct and oversee administration and operation of the department activities, and provide data transparency to the public. 

For more information, view the Infrastructure Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.

Community Health Systems Professional Services Corporation (CHSPSC) and three affiliated New Mexico hospitals (collectively CHS) have agreed to pay the United States $75 million to settle allegations that they violated the False Claims Act by making illegal donations to county governments which were used to fund the state share of Medicaid payments to the hospitals, the Justice Department announced today.  CHSPSC is based in Franklin, Tennessee, and manages more than 200 affiliated hospitals in 29 states.  The three New Mexico hospitals are Eastern New Mexico Medical Center in Chaves County, Mimbres Memorial Hospital and Nursing Home in Luna County and Alta Vista Regional Medical Center in San Miguel County.

“Congress expressly intended that states and counties use their own money when seeking federal matching funds in order to encourage them to join the federal government in ensuring that Medicaid funds are spent on the needs of beneficiaries,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Joyce R. Branda.  “When private hospitals violate the rules against hospital donations funding the state share, that important protection of the Medicaid program is destroyed.”

New Mexico’s Sole Community Provider (SCP) program, which was discontinued in 2014, provided supplemental Medicaid funds to hospitals in mostly rural communities.  The federal government reimbursed the state of New Mexico for approximately 75 percent of its health care expenditures under the SCP program.  Under federal law, New Mexico’s 25 percent “matching” share of SCP program payments had to consist of state or county funds, and not impermissible “donations” from private hospitals.  This restriction on the use of private hospital funds to satisfy state Medicaid obligations was enacted by Congress to curb possible abuses and ensure that states have sufficient incentive to curb rising Medicaid costs. 

The United States alleged that from Aug. 1, 2000, through Dec. 31, 2010, CHS knowingly caused the state of New Mexico to present false claims to the United States for payments made to CHS under the SCP program by making improper donations to Chaves, Luna and San Miguel counties, which were then used by the counties, and subsequently the state, to obtain federal matching payments.  The government alleged that CHS concealed the true nature of these donations to avoid detection by federal and state authorities, and as a result of its scheme, received SCP payments which were funded by the United States in the amount of three times CHS’ “donations.”

“Hundreds of thousands of New Mexicans depend on Medicaid for medical care and other services,” said U.S. Attorney Damon P. Martinez for the District of New Mexico.  “This litigation underscores the importance of maintaining the integrity of the Medicaid Program. Those who violate the law in order to profit from the Medicaid Program undercut the financial integrity of the program and can thus put at risk the availability of medical care and other services to those in need.  We are committed to protecting the integrity of the Medicaid Program no matter the effort required or the time it may take, even in the face of the most vigorous litigation.”

“Hospitals that make provider donations with the expectation that they will receive a windfall from the Medicaid program threaten the integrity of the Medicaid program and will be held accountable,” said Special Agent in Charge Mike Fields for the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Dallas region.

The settlement announced today stems from a whistleblower complaint filed by a former CHSPSC revenue manager, Robert Baker, pursuant to the qui tam provisions of the False Claims Act, which permit persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit.  The act also permits the government to intervene in and take over the lawsuit, as it did in this case as to some of Baker’s allegations.  The United States did not intervene in Baker’s allegations as to SCP payments made to two other affiliated New Mexico hospitals, Carlsbad Medical Center and Lea Regional Medical Center.  Today’s settlement also resolves these other allegations.  Baker will receive $18,671,561 as his share of the government’s recovery.

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 $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal health care programs. 

The investigation and litigation of this case was conducted by the U.S. Attorney’s Office for the District of New Mexico and the Justice Department’s Civil Division, with assistance from HHS-OIG and the HHS Office of General Counsel.  The case is captioned United States ex rel. Baker v. Community Health Systems Professional Services Corporation, et al., Civ. Action No. 05-279 (D. N.M.).  The claims settled by this agreement are allegations only and there has been no determination of liability.

Laguna Beach Resident is the Latest in a Series of Defendants Charged with Concealing Bank Accounts at Israeli Banks

Dr. Baruch Fogel of Laguna Beach, California, pleaded guilty today in the U.S. District Court for the Central District of California to willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR) for tax year 2009, announced the Justice Department’s Tax Division, the U.S. Attorney’s Office for the Central District of California and Internal Revenue Service-Criminal Investigation (IRS-CI).

According to court documents, Fogel, a U.S. citizen, maintained an undeclared bank account held in the name of a foreign corporation at the Luxembourg branch of Bank Leumi.  The undeclared foreign bank account and foreign corporation were set up with the assistance of David Kalai, a tax return preparer who owned United Revenue Service (URS).  In December 2014, David Kalai and his son, Nadav Kalai, were convicted in the Central District of California of conspiracy to defraud the United States for helping certain URS clients set up foreign corporations and undeclared bank accounts to evade U.S. income taxes and for willfully failing to file FBARS for an undeclared foreign account that they controlled.

According to court documents and evidence introduced at the trial of David and Nadav Kalai, Fogel was a doctor who operated several managed health care businesses.  David Kalai suggested to Fogel that he could reduce his taxes by transferring money to a foreign bank account held in the name of a foreign corporation.  David Kalai advised Fogel to open up the bank account that was set up in the name of a British Virgin Islands corporation.  At a meeting facilitated and attended by David Kalai at the Beverly Hills branch of Bank Leumi, Fogel executed documents to open his Luxembourg bank account at Bank Leumi.  According to court documents, Fogel diverted at least $8 million to his undeclared bank account at Bank Leumi’s branch in Luxembourg. 

U.S. citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns.  Additionally, U.S. citizens and residents must file a FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.

Fogel has agreed to pay a civil penalty in the amount of approximately $4.2 million to resolve his civil liability with the IRS for failing to file FBARs.  Fogel faces a statutory maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss to any person, whichever is greater.

Principal Deputy Assistant Attorney General for the Tax Division Caroline D. Ciraolo and Acting U.S. Attorney Stephanie Yonekura of the Central District of California thanked special agents of IRS-CI, who investigated the case, Tax Division Trial Attorneys Christopher S. Strauss and Ellen M. Quattrucci who prosecuted the case, and Assistant U.S. Attorney Sandra R. Brown of the Central District of California, who assisted with the prosecution.

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

Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Andrew M. Luger for the District of Minnesota announced today a criminal complaint charging Alagie Barrow, 41, for his role in a recent attempted coup in The Gambia.  Barrow is charged with conspiracy to violate the Neutrality Act by making an expedition against a friendly nation from the United States and conspiracy to possess a firearm in furtherance of a crime of violence.

On Dec. 30, 2014, there was an unsuccessful attempted coup against the government of The Gambia.  The Gambia is a country in West Africa bordered by Senegal and the Atlantic Ocean.

According to the criminal complaint, in December 2014, Barrow traveled from the United States to The Gambia for the purpose of overthrowing the Gambian government.  Barrow is a dual U.S./Gambian citizen and a resident of Tennessee.  A separately charged co-conspirator, Cherno Njie, a U.S. citizen of Gambian descent and a resident of Texas, is a businessman who served as a financier and a leader of the conspiracy.  Had the coup attempt succeeded, Njie and his co-conspirators expected that Njie would have served as the interim leader of the Gambia had the coup attempt succeeded.

According to the criminal complaint, before departing the United States for The Gambia, Barrow participated in conference calls to discuss the operational plan of the coup.  Barrow and two others were the primary authors of the operational plan.  Prior to departing for The Gambia, the members of the conspiracy purchased multiple firearms, including M4 semi-automatic rifles, and shipped them to The Gambia for use in the coup attempt.  Members of the conspiracy also acquired night-vision goggles, body armor, ammunition, black military style uniform pants, boots, and other personal equipment.

According to the criminal complaint, Barrow traveled to The Gambia as part of the “advance party.”  Barrow assisted other members of the group when they arrived in The Gambia and was responsible for delivering them to safe houses.  Barrow also conducted reconnaissance of the group’s target, the State House.

According to the criminal complaint, on Dec. 30, 2014, a number of the co-conspirators met in the woods near the State House in Banjul, which is the home of the Gambian President, and split into two assault teams.  Barrow was not present at that meeting, and waited with Njie in a safe place until the assault teams took control of the facility.  Barrow was supposed to escort Njie to the State House and elsewhere after the coup.

According to the criminal complaint, when one of the assault teams approached the State House and fired a shot into the air, the team began taking heavy fire from the guard towers.  Numerous conspirators on the assault teams were killed or injured during the failed attempt to take control of the government building.  Both Barrow and Njie have since returned to the U.S. and been arrested.

This investigation is being led by the Federal Bureau of Investigation and its partners on Joint Terrorism Task Forces in multiple field offices.  Assistant Attorney General Carlin and U.S. Attorney Luger thank the many agents, analysts, and prosecutors in multiple offices who are responsible for this ongoing investigation.

Assistant U.S. Attorneys Charles Kovats and John Marti of the District of Minnesota are prosecuting this case, with assistance from Richard Scott, a Deputy Chief in the Counterespionage Section of the Justice Department's National Security Division.  A number of other U.S. Attorney’s Offices, including those in the Middle District of Tennessee, District of Maryland and the Western District of Texas provided critical support during the investigation.

An executive of Japan-based Kawasaki Kisen Kaisha Ltd. (K-Line) pleaded guilty today and was sentenced to 18 months in a U.S. prison for his involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced today. 

According to the one-count felony charge filed today in U.S. District Court for the District of Maryland in Baltimore, Hiroshige Tanioka, who was at various times an assistant manager, team leader and general manager in K-Line’s car carrier division, conspired to allocate customers and routes, rig bids and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore.  Tanioka participated in the conspiracy from at least as early as April 1998 until at least April 2012.

Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and off of an ocean-going vessel.  Examples of this cargo include new and used cars and trucks and construction and agricultural equipment.

"For more than a decade this conspiracy has raised the cost of importing cars and trucks into the United States,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division.  “Today’s sentencing is a first step in our continuing efforts to ensure that the executives responsible for this misconduct are held accountable.”

Today’s sentence was the first to be imposed against an individual in the division’s ocean shipping investigation.  Previously, three corporations have agreed to plead guilty and to pay criminal fines totaling more than $136 million, including Tanioka’s employer K-Line, which was sentenced to pay a criminal fine of $67.7 million in November 2014. 

Pursuant to the plea agreement, which was accepted by the court today, Tanioka was sentenced to serve an 18-month prison term and pay a $20,000 criminal fine for his participation in the conspiracy.  In addition, Tanioka has agreed to assist the department in its ongoing investigation into the ocean shipping industry.

Tanioka was charged with a violation of the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for an individual.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s plea agreement is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit.  Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Baltimore Field Office at 410-265-8080.

The Department of Justice today announced the entry of a consent decree of permanent injunction involving pharmaceutical company, Laclede Inc. and its president, Michael A. Pellico, concerning the distribution of unapproved over-the-counter vaginal drug products made by the company.

The consent decree, approved by U.S. District Judge Percy Anderson for the Central District of California on Jan. 29, permanently enjoins Laclede and Pellico from interstate distribution of unapproved drug products sold under the name Luvena Prebiotic unless and until these products receive approval by the U.S. Food and Drug Administration (FDA).  The drug products include: Luvena Prebiotic Vaginal Moisturizer & Lubricant; Luvena Prebiotic Feminine Wipes; Luvena Prebiotic Enhanced Personal Lubricant; and Luvena Prebiotic Daily Therapeutic Wash. 

Among other things, the decree also authorizes the FDA to order Laclede and Pellico to stop manufacturing products or to recall distributed products should the FDA determine that there is a violation of the terms of the decree.

Moreover, for the next five years, Laclede must notify the FDA before the company markets any new Luvena product or modify product labeling, and the company may not legally market such products until the FDA tells the company it may do so.

“We are pleased that the court has approved the consent decree,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “The department will continue to partner with the FDA to vigorously enforce laws that protect women and other consumers against companies that make unapproved claims about health care products that are sold over the counter, as was the case with Laclede’s Luvena Prebiotic products.”

The consent decree resolves a lawsuit brought by the department in June 2014.  According to the allegations in the complaint, the sale and distribution of the Luvena Prebiotic products, which were manufactured by Laclede at its Rancho Dominguez, California, facility, violated various provisions of the Federal Food, Drug, and Cosmetic Act. 

The act generally prohibits the distribution in interstate commerce of any drug for which the FDA has not given the required premarket approval.  Moreover, the act prohibits the distribution of drugs that are misbranded, including drugs that fail to comply with FDA labeling regulations for over the counter drugs.

The complaint alleged that since 2010, Laclede had sold one or more of the Luvena Prebiotic products without the required FDA approval.  The complaint also alleged that Laclede and Pellico ignored repeated FDA warnings that the company must obtain FDA approval before distributing one or more of the Luvena Prebiotic products in interstate commerce. 

Furthermore, the complaint alleged that the company had made unapproved claims on its websites, Facebook page and Twitter feed that the Luvena Prebiotic products balanced vaginal bacterial flora and/or treated or prevented vaginal infections.  For instance, according to examples described in the government’s complaint, Laclede made numerous unapproved claims on its product labels or on the company’s websites, Facebook page or Twitter feed that its Laclede Prebiotic products would “rebalance” vaginal bacterial flora, correct pH and reduce or minimize vaginal infections.

For instance, the company’s Twitter feed posted: “If your vagina pH isn’t slightly acidic, correct it with Luvena Prebiotics and rebalance the flora for fewer infections.”

Moreover, Laclede’s Facebook page posted: “Yes, Luvena Prebiotics absolutely do help dryness, but their enzymes help with pH also . . . If you have frequent vaginal infections, use Luvena Prebiotics every two weeks — see if it stops your infections.”

The lawsuit was filed by the Civil Division’s Consumer Protection Branch in Washington, D.C., and was handled by Trial Attorney David A. Frank.  Assistance for the lawsuit was provided by Yen P. Hoang of the FDA’s Office of Chief Counsel in Silver Spring, Maryland.

The Department of Justice announced today an agreement with Nueces County, Texas, to resolve issues of accessible entry inside buildings that offer county services and programs, in violation of the Americans with Disabilities Act (ADA).  This year marks the 25th anniversary of the ADA, which the Civil Rights Division plays a critical role in enforcing.  In honor of the anniversary, each month the Department of Justice will spotlight efforts that are opening gateways to full participation and opportunity for people with disabilities.

Nueces County and the U.S. Department of Justice reached an agreement under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the ADA.  One of the hallmarks of the agreement is the requirement that the county will assess all existing web content and online services for conformance with industry guidelines—the Web Content Accessibility Guidelines (WCAG) 2.0—for making web content accessible.

The agreement with Nueces County will allow people with disabilities, like Marshall Burns, who was invited to present at the Coastal Bend Hurricane Conference in Nueces County.  Unfortunately, when Burns tried to register online for the conference, he wasn’t able to do so because he is blind.  The forms on the county website were incompatible with the software program that reads text out loud to him.  Experiences like this, however, will become a thing of the past over the next three years thanks to the PCA agreement.  You can learn more about Burns’ story by checking out the Justice Department blog where we will highlight each month different ways the ADA benefits people with disabilities. 

Under the agreement announced today, Nueces County, Texas, will also ensure that people with disabilities—especially people who use wheelchairs and other mobility devices—can get inside buildings that offer county services and programs.  That means the county will renovate everything from entrances, service areas and counters, restrooms, and parking so that people with disabilities can get into county buildings and use services and programs the county offers.  Sidewalks and curb cuts all over the county will also be targeted—another change that promises to significantly improve life for people with disabilities in Nueces County. 

“Over the past 15 years, nearly 220 communities have signed agreements with the Department of Justice to ensure that their citizens with disabilities enjoy the same services, programs and activities that all others enjoy,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “Participation in and enjoyment of the benefits of the services, programs and activities provided by local government is a fundamental civil right and the ADA is shaping the way local municipalities deliver their services to people with disabilities.”

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

The former information technology manager for Liberty Reserve, a company that operated one of the world’s most widely used digital currency services, was sentenced today to 36 months in prison for conspiring to operate an unlicensed money transmitting business.  

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Preet Bharara of the Southern District of New York made the announcement.

Maxim Chukharev, 28, of San José, Costa Rica, pleaded guilty in September 2014 before U.S. District Judge Denise L. Cote, who also imposed today’s sentence.

According to allegations contained in the indictment and statements made in related court proceedings, Chukharev was an associate of Liberty Reserve founder Arthur Budovsky and served as Liberty Reserve’s information technology manager in Costa Rica.  In that role, Chukharev was principally responsible, along with co-defendant Mark Marmilev, formerly Liberty Reserve’s chief technology officer, for maintaining Liberty Reserve’s technological infrastructure.

According to allegations in the indictment and statements made in related court proceedings, Liberty Reserve was incorporated in Costa Rica in 2006 and billed itself as the Internet’s “largest payment processor and money transfer system.”  Liberty Reserve was created, structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes, and it emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store and launder the proceeds of illegal activity.  Liberty Reserve was used extensively for illegal purposes, functioning as the bank of choice for the criminal underworld because it provided an infrastructure that enabled cybercriminals around the world to conduct anonymous and untraceable financial transactions. 

According to court records, before being shut down by the government in May 2013, Liberty Reserve had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions through its system totaling more than $6 billion in funds.  These funds encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking and other crimes. 

Chukharev, Marmilev and Budovsky were among seven individuals charged in the indictment, which was unsealed on May 28, 2013.  Three co-defendants—Marmilev, Vladimir Kats and Azzeddine El Amine—previously pleaded guilty.  Marmilev was sentenced to five years in prison in December 2014; Kats and El Amine await sentencing.  The indictment also charged Liberty Reserve with conspiracy to commit money laundering and operation of an unlicensed money transmitting business, and the charges remain pending.

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

This case is being investigated by the U.S. Secret Service, the Internal Revenue Service-Criminal Investigation and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, with assistance from the Secret Service’s New York Electronic Crimes Task Force.  The Judicial Investigation Organization in Costa Rica, the National High Tech Crime Unit in the Netherlands, the Financial and Economic Crime Unit of the Spanish National Police, the Cyber Crime Unit at the Swedish National Bureau of Investigation and the Swiss Federal Prosecutor’s Office also provided assistance. 

This case is being prosecuted jointly by the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS) and the U.S. Attorney’s Office’s Complex Frauds Unit and Asset Forfeiture Unit in the Southern District of New York, with assistance from the Criminal Division’s Office of International Affairs and Computer Crime and Intellectual Property Section.

Trial Attorney Kevin Mosley of AFMLS and Assistant U.S. Attorneys Serrin Turner, Andrew Goldstein and Christine Magdo of the Southern District of New York are in charge of the prosecution, and Assistant U.S. Attorney Christine Magdo is in charge of the forfeiture aspects of the case.

A Washington, D.C., tax return preparer and former Washington, D.C., public school teacher and her son, a current Washington, D.C., public school teacher, were convicted today by a federal jury of conspiracy and preparing and filing false tax returns, the Justice Department and the Internal Revenue Service (IRS) announced. 

According to the evidence presented at trial, Sherri Davis, 42, of Washington, D.C., was the owner and operator of 2FT Fast Facts Tax Service, a tax return preparation business operating in Washington, D.C., from 2003 to 2012.  In 2012, Sherri Davis changed the business name to Davis Financial Services and her son, Andre Davis, 24, was listed as the owner and operator of the business.

Sherri and Andre Davis were each convicted on one count of conspiracy to defraud the United States.  Sherri Davis was also convicted of 25 counts of aiding and assisting in the preparation and filing of false federal income tax returns and three counts of filing false personal income tax returns.  Andre Davis, a Washington, D.C., resident, was also convicted of one count of aiding and assisting in the preparation and filing of false tax returns.

“As we enter the 2015 filing season, tax return preparers should take note of today’s conviction,” said Principal Deputy Assistant Attorney General Caroline D. Ciraolo for the Department of Justice’s Tax Division.  “The Department of Justice’s Tax Division, working with IRS-Criminal Investigation, the Offices of the U.S. Attorneys and other local, state and federal law enforcement partners, will identify, investigate and prosecute to the fullest extent of the law those individuals who willfully participate in the preparation and filing of false returns.  These individuals are a threat to the integrity of the tax system, and will face felony charges, incarceration and substantial economic sanctions.”

At trial, the evidence established that Sherri and Andre Davis prepared and filed false tax returns for clients that included various false and fraudulent schedules, deductions, expenses and credits with the goal of reducing the amount of taxes owed by the taxpayers and obtaining larger refunds for the taxpayers than they were entitled to receive.  In some instances, Sherri and Andre Davis and those working for them attached to the false tax returns false and fraudulent Schedules C that reported false business losses and false Schedules A that reported fraudulent itemized deductions.  On some returns, the Schedule C business claimed on the return was completely fabricated.  On other returns, the Schedule A included false or grossly inflated gifts to charity, job expenses and other miscellaneous expenses.

The evidence at trial further established that for calendar years 2007 through 2009, Sherri Davis filed her own false income tax returns in which she failed to report more than $300,000 in tax preparation fees that she received from her business.

“Intentionally preparing false tax returns is a criminal offense that reflects badly on the entire industry,” said Special Agent in Charge Thomas J. Kelly of IRS-Criminal Investigation’s Washington, D.C., Field Office.  “As Sherri and Andre Davis found out today, it is not a good idea to file false tax returns and expect the IRS not to investigate and recommend prosecution.  IRS-Criminal Investigation is committed to holding individuals accountable for their criminal actions.”

Sherri and Andre Davis will be sentenced on April 29 in the U.S. District Court for the District of Columbia by U.S. District Judge Thomas Hogan.  The conspiracy conviction has a statutory maximum sentence of five years in prison and a $250,000 fine.  Each of the remaining counts of conviction has a statutory maximum sentence of three years in prison and fine of $250,000. 

Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation and the D.C. Office of Tax and Revenue Criminal Investigation Division, who investigated the case, as well as Trial Attorneys Jessica Moran, Tiwana Fleming and Mark McDonald for the Tax Division, who are prosecuting the case.  Ciraolo also thanked the U.S. Attorney’s Office for the District of Columbia for their substantial assistance.