District Not Recorded

Two Georgia real estate investors pleaded guilty today for their roles in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Separate felony charges were filed against Mohammad Adeel Yoonas and Kevin Shin on Dec. 23, 2014, in the U.S. District Court for the Northern District of Georgia in Atlanta.  According to court documents, from at least as early as April 2008 until at least March 2012, Yoonas conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County, Georgia.  Yoonas was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire titles to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

Shin, according to court documents, conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County from at least as early as March 2009 until at least March 2012.  Shin was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.         

“These six guilty pleas result from the Antitrust Division’s ongoing investigation into schemes to rig public real estate foreclosure auctions in Georgia,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division.  “The division will continue working with its law enforcement partners to expose cartels that harm distressed homeowners and lenders.”       

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

“The criminal actions of the defendants in this case provide a clear example of why enforcement of the Sherman Act remains necessary in maintaining a level and competitive field within commerce,” said Special Agent in Charge J. Britt Johnson for the FBI Atlanta Field Office.  “The FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying such financial schemes that attempt to take unfair advantage, to include those targeting the foreclosure auction process.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

The investigation is being conducted by Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.htm.

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

All 16 Former Officers Charged Have Now Been Sentenced

Four additional former Puerto Rico police officers have been sentenced for using their law enforcement affiliation and equipment to commit robbery and extortion, and to sell illegal narcotics and manipulate court records.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.

Jose Sanchez-Santiago, Miguel Perez-Rivera and Carlos Laureano-Cruz were each sentenced to 63 months in prison.  Luis Suarez-Sanchez was sentenced to 87 months in prison.  All four defendants were former officers from the Police of Puerto Rico, and all four pleaded guilty in January 2014 to conspiracy to violate RICO.

The officers admitted to being members of a criminal organization that sought to enrich its members through a pattern of illegal conduct.  Over the course of the conspiracy, the officers worked together to conduct traffic stops and enter homes or buildings used by suspected criminals to steal money, property and narcotics.  The officers also planted evidence to make false arrests, and then extorted money in exchange for their victims’ release from custody.  In exchange for bribe payments, the officers gave false testimony, manipulated court records and failed to appear in court when required so that cases would be dismissed.  Additionally, the officers sold and distributed wholesale quantities of narcotics. 

The officers frequently shared the proceeds they illegally obtained and used their power, authority and official positions as police officers to promote and protect their illegal activity.  Among other things, the officers used their police firearms, badges, patrol cars, tools, uniforms and other equipment to commit the crimes, and concealed their illegal activity with fraudulently obtained court documents and falsified police paperwork to make it appear that they were engaged in legitimate police work.

The other 12 defendants charged in this case were sentenced in December 2014.  All defendants were sentenced by Senior U.S. District Judge Daniel R. Dominguez of the District of Puerto Rico. 

The case was investigated by the FBI’s San Juan Division and prosecuted by Trial Attorneys Brian K. Kidd, Emily Rae Woods and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana E. Bauzá of the District of Puerto Rico.

Four South Florida residents were sentenced 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.  Two of the defendants were also sentenced in connection with their conduct in similar schemes at other Miami home health care agencies.

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 sentences.

Dennis Hernandez, 32, of Miami, was sentenced to serve 120 months in prison and ordered to pay $1,438,186 in restitution.  Jose Alvarez, 48, of Miami, was sentenced to serve 120 months in prison and ordered to pay $2,972,570 in restitution.  Joel San Pedro, 45, of Miami, was sentenced to serve 97 months in prison and ordered to pay $4,938,432 in restitution.  Alina Hernandez, 38, of West Palm Beach, was sentenced to serve 24 months in prison and ordered to pay $204,526.05 in restitution. 

Dennis Hernandez, Alvarez, San Pedro and Alina Hernandez each pleaded guilty to one count of conspiracy to commit health care fraud in November 2014. 

In connection with their guilty pleas, each of the defendants admitted that Professional Home Health was actually operated for the purpose of billing the Medicare program for expensive physical therapy and home health services that were not medically necessary or not provided.  Dennis Hernandez, San Pedro and Alvarez admitted to being managers, supervisors, owners and operators at Professional Home Health.  In those capacities, they coordinated and oversaw the submission of fraudulent claims at Professional Home Health, and falsified patient documentation to make it appear that Medicare beneficiaries qualified for and received home health services that were, in fact, not medically necessary or not provided.  Dennis Hernandez and Alvarez also admitted to partaking in similar schemes at additional Miami-area home health agencies. 

Additionally, all four defendants admitted to acting as patient recruiters for Professional Home Health.  In this role, they solicited and received kickbacks and bribes from other co-conspirators at Professional Home Health in exchange for recruiting beneficiaries who neither needed, nor, in some cases, received services. 

From December 2008 through February 2014, Medicare paid Professional Home Health more than $6.2 million for fraudulent home health claims. 

Earlier this year, two other individuals pleaded guilty and were sentenced in connection with the same scheme.  Annarella Garcia, an owner of Professional Home Health, was sentenced to 70 months in prison.  Annilet Dominguez, an administrator of Professional Home Health, was sentenced to 68 months in prison.  Both were also ordered to pay $6,257,142 in restitution.  A sentencing hearing for Ernesto Fernandez and Juan Valdes, co-defendants in the case, is scheduled for Feb. 3, 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 & 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. 

Attorney General-Designate Loretta E. Lynch released the following statement today at the opening of the U.S. Senate confirmation hearing:

“Thank you, Chairman Grassley, Senator Leahy, and distinguished members of the Committee.  I am honored to appear before you in this historic chamber, among so many dedicated public servants.  I want to thank you for your time this morning – and President Obama for the trust he has placed in me by nominating me to serve as Attorney General of the United States.

“It is a particular privilege to be joined today by members of my family – including my husband, Stephen Hargrove, my father, Rev. Lorenzo Lynch, my brother, Rev. Leonzo Lynch and his wife NiCole, as well as several other family members who are here today.

“Mr. Chairman, one of the privileges of my position as United States Attorney for the Eastern District of New York is welcoming new attorneys into the office and administering to them the oath of office.  It is a transformative moment in the life of a young prosecutor.  As they stand before me, prepared to pledge their honor and their integrity, I remind them that they are making their oath not to me, not to my office, or even to our Attorney General, but to our Constitution, the fundamental foundation for all that we do.  It is that document and the ideals embodied therein to which I have devoted my professional life.  Senators, if confirmed as Attorney General I pledge to you and to the American people that the Constitution, the bedrock of our system of justice, will be my lodestar as I exercise the power and responsibility of that position. 

“I owe much to those who have worked to make its promise real for all Americans, beginning with my own family.  All of them – and so many others – have supported me on the path that has brought me to this moment, not only through their unwavering love and support, but through their shining examples, and the values that shaped my upbringing.

“My mother, Lorine, who was unable to travel here today, is a retired English teacher and librarian for whom education was the key to a better life.  She recalls people in her rural community pressing a dime or a quarter into her hands to support her college education.  As a young woman she refused to use segregated restrooms because they did not represent the America in which she believed.  She instilled in me an abiding love of literature and learning, and taught me the value of hard work and sacrifice.  My father, Lorenzo, is a fourth-generation Baptist preacher who in the early 1960’s opened his Greensboro church to those planning sit-ins and marches, standing with them while carrying me on his shoulders.  He has always matched his principles with action – encouraging me to think for myself, but reminding me that we all gain the most when we act in service to others. 

“It was the values my parents instilled in me that led me to the Eastern District of New York, and from my parents I gained the tenacity and resolve to take on violent criminals, to confront political corruption and to disrupt organized crime.  They also gave me the insight and compassion to sit with the victims of crime and share their loss.  Their values have sustained me as I have twice had the privilege of serving as United States Attorney, leading an exceptional office staffed by outstanding public servants, and these values guide and motivate me even today.

“Should I be confirmed as Attorney General, my highest priorities will continue to be to ensure the safety of our citizens, to protect the most vulnerable among us from crime and abuse, and to strengthen the vital relationships between America’s brave law enforcement officers and the communities they are entrusted to serve. 

“In a world of complex and evolving threats, protecting the American people from terrorism must remain the primary mission of today’s Department of Justice.  If confirmed, I will work with colleagues across the executive branch to use every available tool to continue disrupting catastrophic attacks against our homeland and bringing terrorists to justice.  I will draw upon my extensive experience in the Eastern District of New York, which has tried more terrorism cases since 9/11 than any other office.  We have investigated and prosecuted terrorist individuals and groups that threaten our nation and its people – including those who have plotted to attack New York City’s subway system, JFK airport, the Federal Reserve Bank of New York, and U.S. troops stationed abroad, as well as those who have provided material support to foreign terrorist organizations.  And I pledge to discharge my duties always mindful of the need to protect not just American citizens but also American values. 

“If confirmed, I intend to expand and enhance our capabilities in order to effectively prevent ever-evolving attacks in cyberspace, expose wrongdoers, and bring perpetrators to justice.  In my current position, I am proud to lead an office that has significant experience prosecuting complex, international cybercrime, including high-tech intrusions at key financial and public sector institutions.  If I am confirmed, I will continue to use the combined skills and experience of our law enforcement partners, the department’s Criminal and National Security Divisions, and the United States Attorney community to defeat and to hold accountable those who would imperil the safety and security of our citizens through cybercrime.

“I will also do everything I can to ensure that we are safeguarding the most vulnerable among us.  During my tenure as U.S. Attorney, the Eastern District of New York has led the prosecution of financial fraudsters who have callously targeted hard working Americans, including the deaf and the elderly, and stolen their trust and their hard-earned savings.  We have taken action against abusers in over one hundred child exploitation and child pornography cases, and have prosecuted brutal international human trafficking rings that sold victims as young as 14 and 15 years old into sexual slavery.  If confirmed as Attorney General, I will continue to build upon the department’s record of vigorously prosecuting those who prey on those most in need of our protection and I will continue to provide strong and effective assistance to survivors who we must both support and empower.

“Throughout my career as a prosecutor, it has been my honor to work hand in hand with dedicated law enforcement officers and agents who risk their lives every day in the protection of the communities we all serve.  I have served with them.  I have learned from them.  I am a better prosecutor because of them.  Few things have pained me more than the recent reports of tension and division between law enforcement and the communities we serve.  If confirmed as Attorney General, one of my key priorities would be to work to strengthen the vital relationships between our courageous law enforcement personnel and all the communities we serve.  In my career, I have seen this relationship flourish – I have seen law enforcement forge unbreakable bonds with community residents and have seen violence-ravaged communities come together to honor officers who risked all to protect them.  As Attorney General, I will draw all voices into  this important discussion. 

“In that same spirit, I look forward to fostering a new and improved relationship with this committee, the United States Senate, and the entire United States Congress – a relationship based on mutual respect and constitutional balance.  Ultimately, I know we all share the same goal and commitment: to protect and serve the American people. 

“Now, I recognize that we face many challenges in the years ahead.  But I have seen – in my own life and in my own family – how dedicated men and women can answer the call to achieve great things for themselves, for their country, and for generations to come.

“My father – that young minister who carried me on his shoulders – has answered that call.  As has my mother, that courageous young teacher who refused to let Jim Crow define her.  Standing with them are my uncles and cousins who served in Vietnam – one of whom is with me here today - and my older brother, a Navy SEAL, who answered that call with their service to  our country. 

“As I come before you today in this historic chamber, I still stand on my father’s shoulders, as well as on the shoulders of all those who have gone before me and who dreamed of making the promise of America a reality for all and worked to achieve that goal. 

“I believe in the promise of America because I have lived the promise of America. 

“If confirmed to be Attorney General of the United States, I pledge to all of you and to the American people that I will fulfill my responsibilities with integrity and independence.  I will never forget that I serve the American people, from all walks of life, who continue to make our nation great – as well as the legacy of all those whose sacrifices have made us free.  And I will always strive to uphold the trust that has been placed in me to protect and defend our Constitution, to safeguard our people, and to stand as the leader and public servant that they deserve.

“Thank you all, once again, for your time and your consideration.  I appreciate the opportunity to speak with you today.  I look forward to your questions – and to all that we may accomplish in the days ahead, together, in the spirit of cooperation, shared responsibility, and justice.”

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Damon P. Martinez for the District of New Mexico, Assistant Director Randall C. Coleman of the FBI’s Counterintelligence Division and Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division announced that Pedro Leonardo Mascheroni, a scientist formerly employed at the Los Alamos National Laboratory (LANL), was sentenced this morning for Atomic Energy Act and other violations relating to his communication of classified nuclear weapons data to a person he believed to be a Venezuelan government official.

Mascheroni, 79, a naturalized U.S. citizen from Argentina, was sentenced in Albuquerque, New Mexico, by U.S. District Judge William P. Johnson to 60 months in federal prison followed by the three years of supervised release.  His wife, Marjorie Roxby Mascheroni, 71, previously was sentenced in August 2014 to a year and a day of imprisonment followed by three years of supervised release for her conviction on conspiracy and false statement charges.

“The public trusts that the government will do all it can to safeguard Restricted Data from being unlawfully transmitted to foreign nations not entitled to receive it,” said Assistant Attorney General Carlin.  “We simply cannot allow people to violate their pledge to protect the classified nuclear weapons data with which they are entrusted.  Today’s sentencing should leave no doubt that counterespionage investigations remain one of our most powerful tools to protect our national security.  I thank the many people who worked to bring these convictions to fruition.”

“Our laws are designed to prevent ‘Restricted Data’ from falling into the wrong hands because of the potential harm to our national security,” said U.S. Attorney Martinez.  “Those who work at our country’s national laboratories are charged with safeguarding that sensitive information, and we must and will vigorously prosecute anyone who compromises our nation’s nuclear secrets for profit.  I commend the many agents, analysts and prosecutors who worked tirelessly to bring about the convictions in this case.  I also thank the Los Alamos National Laboratory for cooperating fully in the investigation and prosecution of this case.”

“This case demonstrates the consequences that result when those charged with protecting our nation’s secrets violate the trust placed in them by the American people,” said Assistant Director Coleman.  “Safeguarding classified material is vital to the public interest, and the FBI will continue to hold accountable those who knowingly and willfully threaten the national security of the United States through the unauthorized disclosure of protected information.”

“America trusts those who work with our country's classified information to keep it away from those who would harm us.  Anyone who betrays that trust for his own gain puts our nation's security up for auction, and the price for us all could be very high indeed,” said Special Agent in Charge Lee.  “Since World War II, the FBI has worked tirelessly to protect U.S. nuclear weapons data, and we are proud of our investigation in this case.”

Mascheroni, a Ph.D. physicist, worked as a scientist at LANL from 1979 to 1988 and held a security clearance that allowed him access to certain classified information, including “Restricted Data.”  Roxby Mascheroni worked at LANL between 1981 and 2010, where her duties included technical writing and editing.  She also held a security clearance at LANL that allowed her access to certain classified information, including “Restricted Data.”  As defined under the Atomic Energy Act, “Restricted Data” is classified information concerning the design, manufacture or use of atomic weapons; the production of special nuclear material; or the use of special nuclear material in the production of energy.

Mascheroni and Roxby Mascheroni were indicted in September 2010 and charged with conspiracy to communicate and communicating Restricted Data to an individual with the intent to secure an advantage to a foreign nation, as well as conspiracy to convey and conveying classified information.  The indictment also charged Mascheroni with concealing and retaining U.S. records with the intent to convert them to his own use and gain, and both defendants with making false statements.

Mascheroni pleaded guilty in June 2013, to counts seven and eight of the indictment, charging him with conversion of government property and retention of U.S. records, and counts 10 through 15, charging him with making false statements.  Mascheroni also pleaded guilty to a felony information charging him with two counts of communication of Restricted Data and one count of retention of national defense information. 

In entering his guilty plea, Mascheroni admitted that in November 2008 and July 2009, he unlawfully communicated Restricted Data to another individual with reason to believe that the data would be utilized to secure an advantage to Venezuela.  He also admitted unlawfully converting Department of Energy information to his own use and selling the information in November 2008 and July 2009, and failing to deliver classified information relating to the United States’ national defense to appropriate authorities and instead unlawfully retaining the information in his home.  Finally, Mascheroni admitted making materially false statements to the FBI when he was interviewed in October 2009. 

Roxby Mascheroni pleaded guilty in June 2014, to count six of the indictment, charging her with conspiracy, and counts 16 through 22, charging her with making false statements.  She also pleaded guilty to a felony information charging her with conspiracy to communicate Restricted Data.  Roxby Mascheroni admitted that between October 2007 and October 2009, she conspired with Mascheroni to convey Restricted Data belonging to the United States to another person with reason to believe that the information would be used to secure an advantage to Venezuela.  She also admitted making materially false statements to the FBI when she was interviewed in October 2009.

The indictment in this case did not allege that the government of Venezuela or anyone acting on its behalf sought or was passed any classified information, nor did it charge any Venezuelan government officials or anyone acting on their behalf with wrongdoing.  The indictment also did not allege any wrongdoing by other individuals working at LANL. 

This investigation was conducted by the FBI’s Albuquerque Division with assistance from the Department of Energy and LANL.  The prosecution was handled by Senior Counsel Kathleen Kedian and Trial Attorney David Recker of the Counterespionage Section of the Justice Department’s National Security Division and Assistant U.S. Attorneys Fred J. Federici, Dean Tuckman and Holland S. Kastrin of the U.S. Attorney’s Office for the District of New Mexico.

Today, the U.S. Department of Justice’s Office of Justice Programs’ (OJP) Diagnostic Center and the Minneapolis Police Department (MPD) released the final assessment and implementation plans to support the MPD’s accountability procedures.  The Diagnostic Analysis will allow MPD to implement changes that will improve police and community trust in the Minneapolis community.  The assessment focused on goals set by MPD including improving police accountability and preventing officer misconduct.

The Diagnostic Center analyzed citizen complaints over a six-year period, identified strengths and gaps in oversight, discipline and accountability, and evaluated MPD’s current early-intervention system and how it compares to other model systems.  The full report is available at the Diagnostic Center’s website.

“Strengthening relationships between law enforcement agencies and the communities they serve is one of the defining public safety challenges of our time,” said Assistant Attorney General Karol V. Mason for the Office of Justice Programs.  “I commend Chief [Janeé] Harteau for calling on the resources of the OJP Diagnostic Center and for her commitment to building trust with the citizens of Minneapolis.”

In 2014, the Diagnostic Center conducted an independent assessment including community stakeholder interviews and data analysis to identify promising practices for police accountability related to managing oversight and preventing misconduct.  In October 2014, the Diagnostic Center presented its assessment findings to the MPD and broader Minneapolis community.  Since the presentation of the Diagnostic Center’s Analysis, the MPD has moved forward with creating five committees comprising representatives from MPD, the Office of Police Conduct Review, city leadership and the community to address recommendations on police conduct, early interventions systems, community outreach, and coaching and strategic communications.

“The work that the Minneapolis Police Department and the Diagnostic Center have embarked on fits squarely into the goals of community safety, officer safety and criminal justice reform that the Justice Department has made a top priority,” said Deputy Assistant Attorney General Mark Kappelhoff for the Justice Department’s Civil Rights Division.  “I applaud Chief Harteau, the Minneapolis Police Department and the community on their leadership and commitment to implementing sustainable solutions that will lead to increased public trust and safety for everyone.”

The Diagnostic Center provides customized technical assistance to help state, county, city and tribal communities identify and confront persistent, systemic public safety challenges.  In addition to addressing a particular public safety concern, engagement with the Diagnostic Center is intended to build the community’s capacity to act independently and use data to make future policy and programming decisions.  Federal agencies and experts across the Department of Justice are available to leverage resources and develop a coordinated federal response to community-specific public safety issues and provides customized assistance to communities by collecting and analyzing data to identify the factors contributing to the public safety issue and then mapping those factors to strategies and solutions that have demonstrated success in reducing crime.For more information or to request assistance go to https://www.ojpdiagnosticcenter.org/.

OJP, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims.  OJP has six components: the Bureau of Justice Assistance, the Bureau of Justice Statistics, the National Institute of Justice, the Office of Juvenile Justice and Delinquency Prevention, the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking.  More information about OJP can be found at www.ojp.gov.

Sanden Corp., an automotive parts manufacturer based in Gunma, Japan, has agreed to plead guilty and to pay a $3.2 million criminal fine for its role in a conspiracy to suppress and eliminate competition for the purchase of compressors used in air conditioning systems sold to Nissan North America Inc. for installation in vehicles manufactured and sold in the United States and elsewhere, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Sanden conspired to fix the prices of compressors sold to Nissan.  In addition to the criminal fine, Sanden has agreed to cooperate in the department’s ongoing investigation.  The plea agreement is subject to court approval.

“Today’s charge is the latest in the Antitrust Division’s ongoing investigation of automobile parts suppliers,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal, anticompetitive means.”

The department said that Sanden and its co-conspirator held meetings and conversations to discuss and agree upon the bids and price quotations submitted to Nissan for the purchase of compressors used in automotive air conditioning systems.  Sanden’s involvement in the conspiracy lasted from as early as August 2008 until at least April 2009.

Including Sanden, 33 companies and 50 individuals have been charged in the department’s ongoing investigation into price fixing and bid rigging in the automotive parts industry.  All of the charged companies have pleaded guilty or have agreed to plead guilty and to pay a combined total of more than $2.4 billion in fines.

Sanden is charged with fixing prices 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.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the Antitrust Division’s New York Office and the FBI’s New York 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 the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1–888–647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s New York Field Office at 212-384-1000.

A Peruvian man charged with running an operation that threatened and defrauded Spanish-speaking U.S. residents was sentenced today to more than 17 years in prison in federal district court in Miami, the Department of Justice and U.S. Postal Inspection Service (USPIS) announced. 

Juan Alejandro Rodriguez Cuya, 35, was sentenced to serve 210 months in federal prison to be followed by three years of supervised release for his operation of Angeluz Florida Corporation and call centers in Peru that lied to and threatened Spanish-speaking victims into paying fraudulent settlements for nonexistent debts.  In addition to his prison sentence, Rodriguez Cuya was ordered to forfeit assets.

In October 2014, Rodriguez Cuya was convicted by a jury after less than two hours of deliberation following a two-week trial before U.S. District Court Judge Patricia A. Seitz.  The 26 charges against him included conspiracy, mail fraud, wire fraud and attempted extortion.  His mother, Maria Luzula, pleaded guilty to all counts against her midway through trial and on Dec. 18, 2014, was sentenced to serve 165 months in prison. 

“The victims of this case tell horrible stories of false threats made against them – threats of seized property, arrest and sometimes even deportation,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “The Justice Department will be particularly vigilant in cases such as this, in which individuals target and exploit specific populations.”

According to evidence presented at trial, the defendants’ employees in Peru used Internet-based telephone calls to threaten Spanish-speaking victims in the United States.  The Peruvian callers falsely accused the victims of having failed to accept delivery of certain products and claimed that the victims owed thousands of dollars in fines and that lawsuits would be brought against them.  In reality, the victims had never ordered these products and nothing had been delivered.

Additional evidence at trial established that the call center employees claimed that the consumers could resolve the fines if they immediately paid a “settlement fee.”  Consumers who contested these settlement fees were told that failure to pay could lead to arrest, deportation or seizure of property.  Thousands of victims succumbed to these threats and paid fees that they did not owe. 

 Victims who testified at trial spoke of how anxious the calls made them.  The victims were so afraid of the threats that they paid fees they simply could not afford.  At sentencing, victims told the judge that they have lost trust in people and that they still become nervous when their phones ring.  Also at sentencing,  a victim told the judge that, like many other people, she came to this country for opportunity and a better life, but the crime made her feel she was not in the United States.  It made her feel assaulted without any recourse.

“Consumer fraud that targets a specific population is shameful,” said U.S. Attorney Wilfredo A. Ferrer for the Southern District of Florida.  “In this case, the defendants targeted Spanish-speaking consumers and falsely threatened them with arrest, deportation, forfeiture of property or harm to their credit scores when the consumers refused to settle claims for products that were not delivered or ordered.  Such tactics are intolerable.  The U.S. Attorney’s Office is committed and stands united with the Department of Justice’s Civil Division Consumer Protection Branch to protect our consumers from fraud.” 

“The USPIS will continue to aggressively investigate and go after those who defraud citizens of their hard earned money through the use of threats and other abusive tactics,” said Postal Inspector in Charge Ronald Verrochio of the USPIS Miami Division.

Acting Assistant Attorney General Branda commended the USPIS for its investigative efforts and thanked the U.S. Attorney’s Office for the Southern District of Florida for their contributions to the case.  The case was prosecuted by Trial Attorney Phil Toomajian and Assistant Director Richard Goldberg of the Civil Division’s Consumer Protection Branch.

An attorney licensed to practice in New York was found guilty yesterday of three counts of subscribing to false tax returns for the 2007, 2008 and 2009 tax years following a bench trial before U.S. District Judge Vincent L. Briccetti, Principal Deputy Assistant Attorney General Caroline D. Ciraolo for the U.S. Department of Justice’s Tax Division and U.S. Attorney Preet Bharara for the Southern District of New York, announced today. 

Matthew Libous was found not guilty by Judge Briccetti of false subscription counts for his 2010, 2011 and 2011 amended returns and not guilty of one count of obstructing the Internal Revenue Service (IRS).

“Yesterday’s verdict was a just conclusion for Matthew Libous’s repeated, willful failure to report all his income to the IRS over a period of years,” said U.S. Attorney Bharara.  “As a practicing attorney, Libous knew better.  My office will continue to make every effort to ensure that everyone pays his or her fair share of taxes.”

“Yesterday’s conviction should serve as clear notice that the Tax Division, working with IRS Criminal Investigation and the Offices of the U.S. Attorneys, will vigorously enforce our nation’s criminal tax laws and prosecute those individuals, including legal professionals, who willfully file false federal tax returns,” said Principal Deputy Assistant Attorney General Ciraolo. 

According to the superseding indictment and the evidence presented at trial, Libous engaged in the practice of law from 2006 through 2008.  Libous deposited the fees he received into his personal bank account but never reported them on his tax return.  In 2008, Libous became a minority partner and manager of Wireless Construction Solutions LLC (WCS), a company that maintained cellular telephone towers.  Libous caused WCS to pay thousands of dollars in his personal expenses on his behalf from 2008 to 2011.  In returning yesterday’s verdict following a three-day bench trial, Judge Briccetti said that he found that Libous willfully failed to report the income from his law practice in 2007 and 2008, and the income he received as a result of his causing WCS to pay his personal expenses in 2008 and 2009.

Libous faces a statutory maximum sentence of three years in prison for each of the false subscription convictions.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  Sentencing is scheduled for April 29.

This prosecution is being handled by the U.S. Attorney’s Office for the Southern District of New York, White Plains Division.  Assistant U.S. Attorney James McMahon for the Southern District of New York and Special Assistant U.S. Attorney Andrew Kameros of the Tax Division are in charge of the prosecutions.

Attorney General Eric Holder released the following statement today on Stuart F. Delery’s nomination to be Associate Attorney General:

“I am delighted to join President Obama in congratulating Stuart Delery on his nomination as Associate Attorney General – an office in which he has distinguished himself in an acting capacity over the last four months.

“Throughout his tenure at the Department of Justice – from his time as Chief of Staff to the Deputy Attorney General, to his service as Senior Counselor in my office, and his leadership of the Department’s Civil Division, Stuart has proven himself to be an outstanding attorney, an extraordinarily dedicated public servant, and an indispensable part of our senior leadership team.

"In the last few years alone, Stuart has made significant contributions in our ongoing efforts to ensure the integrity of America’s financial system, to safeguard the health and safety of our citizens, to protect consumers throughout the nation, and to bolster national security.  I am confident that, should he be confirmed by the U.S. Senate, Stuart will continue to build on the record of progress he has already established – and to uphold the standards of excellence that have always defined his work.  I join the President in urging Senate leaders to confirm Stuart Delery as Associate Attorney General in a timely manner, and look forward to all that he will help this Department achieve in the days ahead.”

An elected county commissioner for Precinct 1 of the Webb County Commissioners Court in Texas was sentenced today to 76 months in prison for accepting bribes in exchange for official actions.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division made the announcement.  U.S. District Judge Marina Garcia Marmolejo of the Southern District of Texas imposed the sentence.

Kristopher Michael Montemayor, 37, of Laredo, Texas, pleaded guilty to one count of federal programs bribery on June 19, 2014.  In addition to the prison sentence, he was ordered to pay a fine of $109,405.72 and to forfeit $13,721.16.

In his plea agreement, Montemayor admitted that he solicited and accepted multiple bribes in exchange for promising to perform official acts.  Specifically, Montemayor admitted that he accepted three separate bribe payments totaling $11,000 and over $2,700 in electronics and other merchandise, including two Apple iPads and two pairs of Dr. Dre Beats Solo HD headphones, from a businessman who, unbeknownst to Montemayor, was an undercover law enforcement agent.  In exchange for the cash and the other items, Montemayor promised to take various forms of official action to promote the business interests of the undercover agent.

Montemayor also admitted to accepting a 2012 Ford F-150 pick-up truck, worth approximately $37,000, in exchange for providing government jobs to the vehicle owner and his spouse.  As a result of these appointments, the vehicle owner and his wife received salaries of $26,000 and $45,553 from Webb County.  Montemayor admitted that the vehicle owner performed little or no work in exchange for his government salary.

The case was investigated by the Laredo Resident Agency of the FBI’s San Antonio Division.  The case was prosecuted by Trial Attorneys Emily Rae Woods and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section.

A federal jury sitting in Providence, Rhode Island, convicted a Cranston, Rhode Island, man of one count of corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), one count of tax evasion and two counts of aiding and assisting in the preparation and filing of false corporate tax returns, the Justice Department and the IRS announced.

John Fall was remanded into custody after the jury verdict.  Fall faces a statutory maximum sentence of 14 years in prison and a $1 million fine at his sentencing on April 28 before U.S. District Judge John J. McConnell Jr. for the District of Rhode Island. 

According to the evidence presented at trial, Fall was a real estate consultant who bought, sold and brokered real estate.  Fall also participated in handling the financial affairs of his wife and her businesses, including her dental practice, Comfort Dental Inc., and Broad Street Investments.  Between 1999 and 2010, Fall used numerous nominee entities and business names to conceal his business and financial transactions.  Fall also used multiple bank accounts, including commingled or “warehouse” bank accounts, in at least six states to conceal his financial transactions, as well as certain financial transactions of Comfort Dental and Broad Street Investments.  To further disguise business and financial transactions, Fall used fake names and aliases to conceal his ownership and control over his nominee entities.

The evidence at trial proved that Fall filed false federal income tax returns for 1998 and 1999, and failed to file any tax returns for the years 2000 through 2010.  The IRS audited Fall for 1998 through 2000, assessing him taxes totaling approximately $72,000. 

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

This case was investigated by special agents with the IRS – Criminal Investigation.  The case is being prosecuted by Assistant Chief John Kane and Trial Attorney Jeffrey Bender with the Justice Department’s Tax Division.

The owner and operator of a Miami home health care agency was sentenced today to 106 months in prison for his participation in a $30 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.

Ramon Regueira, 66, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud on Nov. 13, 2014.  In addition to the prison sentence, U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida ordered Regueira to pay $21 million in restitution, both jointly and severally with his co-conspirator. 

According to his plea agreement, Regueira was an owner of Nation’s Best Care Home Health Corp. (Nation’s Best), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.  Regueira admitted that he and his co-conspirators operated Nation’s Best 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 or not provided.

Specifically, Regueira admitted that he and his co-conspirators paid kickbacks and bribes to patient recruiters who provided patients to Nation’s Best, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services.  Regueira and his co-conspirators then used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for unnecessary home health care services.

From January 2007 through January 2011, Nation’s Best submitted approximately $30 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $21 million for these fraudulent claims. 

The case was investigated by the FBI and 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 Southern District of Florida.  This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer and 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.

The U.S. Court of Appeals for the Ninth Circuit today affirmed the convictions of a former Nevada lobbyist for making excessive campaign contributions and contributions in the name of another person, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.

“We're pleased that today's decision confirms that the cornerstones of our campaign finance laws - contribution limits and transparency - are not subject to creative misinterpretations of those determined to break the law,” said Assistant Attorney General Caldwell.

“Harvey Whittemore knew the law, he knew how to raise money the right way, he knew right from wrong, and he knew how he could violate the law and avoid detection,” said U.S. Attorney Bogden.  “He made a conscious and willful choice to violate federal elections laws in order to increase his own power and influence at the expense of the voting public and the election process.”

F. Harvey Whittemore, 62, of Reno, Nevada, a prominent Nevada lawyer, former lobbyist and land developer, was convicted by a jury in the District of Nevada in May 2013 of making excessive campaign contributions, making contributions in others’ names, and causing a materially false statement to be made to the Federal Election Commission (FEC).  He was sentenced on Sept. 30, 2013, to two years in prison and a $100,000 fine. 

According to evidence presented at trial, Whittemore was aware of the strict limits on individual federal campaign contributions.  In an effort to circumvent those limits, he devised a scheme to unlawfully funnel more than $130,000 of his own money through approximately 29 family members, employees and their spouses to the campaign committee for a U.S. senator.  This scheme allowed Whittemore to make an individual campaign donation in excess of the federal limits. Whittemore concealed the scheme from the FEC, the senator, and the senator’s campaign committee.

The case was investigated by the FBI and prosecuted by Deputy Chief Eric G. Olshan of the Criminal Division’s Public Integrity Section and First Assistant U.S. Attorney Steven W. Myhre of the District of Nevada.  Appellate Chief and Assistant U.S. Attorney Elizabeth Olson White of the District of Nevada argued the appeal.

The Department of Justice today announced a sentencing and guilty plea for two members of a family run sex trafficking organization based in southern Florida.  Rafael Alberto Cadena-Sosa was sentenced by U.S. District Court Judge Joes E. Martinez to serve 15 years in prison and Carmen Cadena pleaded guilty before U.S. District Court Judge Jose Martinez for participating in a brutal family run sex trafficking organization.

Rafael Alberto Cadena-Sosa

Cadena-Sosa, 46, a Mexican national, was sentenced to serve 15 years in prison for conspiring and holding a person in a condition of involuntary servitude.  Judge Martinez also ordered Cadena-Sosa to pay $1,261,563 in restitution to sixteen different victims. 

On Oct. 9, 2014, Cadena-Sosa pleaded guilty to conspiracy and to holding a person in a condition of involuntary servitude.  As part of his plea, Cadena-Sosa admitted that he, along with other family members and associates, approached women and girls, some as young as fourteen years old, in Veracruz, Mexico, and lured them into coming to the United States using false promises of legitimate jobs.  After illegally smuggling women and girls into the United States, Cadena-Sosa and other family members imposed a smuggling debt and used brutal physical force and violence, sexual assaults, and threats of death and bodily harm to the victims and their families to compel the victims to engage in prostitution 12 hours a day, six days a week and turn over the proceeds to the defendants to pay down the smuggling debts the defendants imposed.  Cadena-Sosa and other family members would also search for victims who had run away from a brothel and subject them to beatings and rapes upon capture.

Carmen Cadena

Cadena, 48, a Mexican national, pleaded guilty to one count of conspiracy for conspiring with other members of the Cadena organization to unlawfully encourage and bring undocumented victims into the U.S.; unlawfully transport victims within the U.S.; unlawfully harbor victims within the U.S.; unlawfully coerce and transport victims, including victims as young as 14-years-old, into the U.S. for purposes of illegal sexual activity; and unlawfully use extortionate means to collect extensions of credit made to the victims.  

Cadena faces a maximum sentence of five years in prison and a fine of $500,000.  Sentencing is scheduled to occur on May 18, 2015.  According to the terms of the plea agreement, the parties will jointly recommend the maximum sentence of five years in prison and $1,261,563 in restitution to 16 victims.

Sixteen defendants were charged in a superseding indictment filed in 1998.  Mexican authorities arrested Rafael Alberto Cadena-Sosa and Carmen Cadena and extradited them to the United States in November 2013 and December 2014, respectively.  Four other members of the Cadena sex trafficking organization have been convicted, including Cadena-Sosa’s uncle, Rogerio Cadena, who pleaded guilty in 1999 and was sentenced to 15 years; Cadena-Sosa’s brother, Abel Cadena-Sosa, who was convicted in Mexico and sentenced to 24 years, and two other brothers, Hugo and Juan Luis Cadena-Sosa—Carmen Cadena’s husband—, who pleaded guilty in 2002 and 2008, and were sentenced to five years and 15 years respectively.  Six other defendants previously pleaded guilty in federal court in connection with the scheme, and one was convicted in state court for a murder outside a Cadena-run brothel.

Since 2009, the Departments of Justice and Homeland Security as well as law enforcement agencies in Mexico, have worked to develop high-impact prosecutions to dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, restore the rights and dignity of human trafficking victims, and reunite victims with their children held under the trafficking networks’ control.  These efforts have resulted in numerous successful prosecutions, including U.S. federal prosecutions of over 50 defendants in multiple cases in Georgia, New York, Florida, and Texas since 2009.

“No human being should have to endure the violence and brutality these young women and girls suffered at the hands of the Cadena organization,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “These violations of the victims’ individual rights and freedom are intolerable and the Department of Justice will continue in its commitment to bringing human traffickers to justice and restore the rights and dignity of the courageous survivors of this crime.”

“Rafael Cadena-Sosa and Carmen Cadena preyed on vulnerable girls and young women and lured them to the United States with the promise of a better life,” said U.S. Attorney Wilfredo A. Ferrer for the Southern District of Florida.  “Instead, Cadena-Sosa and his family and associates robbed these victims of their freedom and dignity, brutally beat them and subjected them to modern-day slavery. The dismantling of the Cadena organization reaffirms our unwavering commitment to prosecute those who seek to profit at the expense of the suffering of to others.  We will continue to work with our domestic and international law enforcement partners to bring justice to those who engage in this inhumane practice.  This case is one example of bilateral progress to effectively dismantle human trafficking networks operating across the U.S.-Mexico border.”

“The long prison sentence imposed upon Rafael Alberto Cadena-Sosa is a testament to the cooperation and commitment of numerous law enforcement agencies both here and in Mexico to stop this appalling criminal activity,” said Special Agent in Charge George L. Piro of the FBI Miami Office.  “We will continue working with our partners to dismantle human trafficking networks such as this one that operate in the shadows and brutalize their victims.”

Acting Assistant Attorney General Gupta and U.S. Attorney Ferrer praised the collaborative efforts of multiple law enforcement agencies throughout the investigation and prosecution, including the Federal Bureau of Investigation, the Department of Homeland Security’s Customs and Border Protection and Immigration and Customs Enforcement, the Bureau of Alcohol, Tobacco and Firearms, the Office of International Affairs, Criminal Division, U.S. Department of Justice, Florida Department of Law Enforcement, Palm Beach County Sheriff’s Office, West Palm Beach Police Department, Okeechobee County Sheriff’s Office, Fort Pierce Police Department, Avon Park Police Department, Boynton Beach Police Department, and Lee County Sheriff’s Office.  The case is being prosecuted by Assistant United States Attorney Adam McMichael and Trial Attorney Matthew Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.  

The Department of Justice announced today that it has filed a proposed consent order in Hereford v. Huntsville Board of Education, a longstanding school desegregation case, to resolve issues related to school attendance zones, black students’ access to quality academic offerings and student discipline, among other areas.  The department and counsel for the Huntsville City Schools in Alabama jointly filed the proposed consent order in district court in Birmingham, and are now seeking public comment prior to presentation of the proposed consent order to the Huntsville Board of Education and to the court for final approval.

The proposed agreement, if approved, would resolve the parties’ dispute over the district’s 2014 plan to reconfigure student attendance zones.  The Justice Department had objected that the plan did not further desegregation or address racial inequalities in students’ access to quality academic offerings.  If approved by the court, the proposed consent order would require the district to provide equal educational opportunities to black students by taking steps including:

• revising attendance zones and growing and strengthening magnet programs to improve diversity at many of its schools;

• expanding access for black students to pre-kindergarten, gifted programs, advanced course offerings such as Advanced Placement and International Baccalaureate, academic after-school programs, and college counseling;

• implementing measures to promote faculty and administrator diversity;

• ensuring that all students are aware of and can equally participate in extracurricular activities;

• creating positive, inclusive school climates, and ensuring that student discipline is fair, non-discriminatory, and does not unnecessarily remove students from classrooms;

• establishing a desegregation advisory committee consisting of students and parents to advise the district and inform the court about implementation of the consent order;

• providing professional development for teachers on such topics as strategies for teaching students from diverse backgrounds, understanding implicit bias, and supporting positive student behavior; and

• continuously monitoring racial disparities to ensure meaningful and sustained improvement in areas including student performance, students’ access to courses, and rates of student discipline.

“A quality education is the key that opens the door to a better future,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “This agreement aims to ensure that African American students in Huntsville schools can access that quality education on an equal basis.  We look forward to working with the district to implement the measures required by this proposed order, if approved, and eventually bring this case to successful resolution after so many years.”

“The Department of Justice is committed to ensuring that Alabama schools provide African American students, and all students, with the equal educational opportunities guaranteed under federal law,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama.

If the proposed consent order is approved, the Justice Department will monitor and enforce the district’s compliance.  The district may seek a declaration of unitary status and dismissal of the case when it can demonstrate sustained compliance with the terms of the consent order.

The proposed consent order can be found at www.proposedconsentorder.com, which also provides information regarding opportunities for public comment, including a series of community forums.

The enforcement of Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race and other factors in public schools, is a top priority of the Justice Department’s Civil Rights Division.  Additional information about the Civil Rights Division of the Justice Department is available on its web site at www.justice.gov/crt.

A former CIA officer was convicted today by a federal jury in Alexandria, Virginia, of illegally disclosing national defense information and obstructing justice.

Attorney General Eric Holder, FBI Director James B. Comey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia made the announcement.

“This is a just and appropriate outcome,” said Attorney General Holder.  “The defendant’s unauthorized disclosures of classified information compromised operations undertaken in defense of America’s national security.  The disclosures placed lives at risk.  And they constituted an egregious breach of the public trust by someone who had sworn to uphold it.  As this verdict proves, it is possible to fully prosecute unauthorized disclosures that inflict harm upon our national security without interfering with journalists' ability to do their jobs.  And I want to thank the investigators, prosecutors and support staff who made this outcome possible for their relentless efforts in advancing a complex case that spanned multiple years.”

“He violated his sworn duty to protect our nation's secrets and he betrayed our country,” said Director Comey.  “The FBI will continue to pursue these cases vigorously.”

“Jeffrey Sterling was trusted with the nation's most sensitive secrets and chose to expose them - putting our national security at risk, and endangering lives in the process,” said Assistant Attorney General Caldwell.  “These cases are challenging, but vitally important to our efforts to secure critical intelligence on behalf of the American people.”

“Over 10 years ago a disgruntled former CIA employee disclosed extremely sensitive classified information to a journalist,” said U.S. Attorney Boente.  “That classified information was critical to our national defense, and releasing it was illegal and went against Mr. Sterling's professional commitments to the CIA.  Mr. Sterling's vindictive and careless choices ultimately led us here today and to this unanimous verdict. I would like to thank the trial team and our partners at the FBI's Washington Field Office and the Central Intelligence Agency for their hard work and commitment to this case.”

Jeffrey Alexander Sterling, 47, of O’Fallon, Missouri, was convicted today in the Eastern District of Virginia of six counts of unauthorized disclosure of national defense information, and one count each of unlawful retention of national defense information, unauthorized conveyance of government property and obstruction of justice.  Sterling was indicted on Dec. 22, 2010, and arrested on Jan. 6, 2011.  Sentencing is scheduled for April 24, 2015.

According to evidence presented at trial, Sterling was employed by the CIA from May 1993 to January 2002.  From November 1998 through May 2000, he was assigned to a classified clandestine operational program designed to undermine the Iranian nuclear weapons program.  He was also the operations officer assigned to handle a human asset associated with that program, a person identified at trial as Merlin.  Sterling was reassigned in May 2000, at which time he was no longer authorized to receive or possess classified documents concerning the program or the individual.

In connection with his employment, Sterling, who is a lawyer, signed various security, secrecy and non-disclosure agreements in which he agreed never to disclose classified information to unauthorized persons, acknowledged that classified information was the property of the CIA and also acknowledged that the unauthorized disclosure of classified information could constitute a criminal offense.  These agreements also set forth the proper procedures to follow if Sterling had concerns that the CIA had engaged in any “unlawful or improper” conduct that implicated classified information.  These procedures permit such concerns to be addressed while still protecting the classified nature of the information.  The media was not an authorized party to receive such classified information.

In August 2000, Sterling pursued administrative and civil actions against the CIA.  Evidence at trial showed that Sterling, in retaliation for the CIA’s refusal to settle those actions on terms favorable to him, disclosed information concerning the classified operational program and the human asset to a New York Times reporter working on an unpublished article in early 2003 and a book the reporter published in January 2006.  Sterling’s civil and administrative claims were ultimately dismissed by the court.

Evidence demonstrated that in February and March 2003, Sterling made various telephone calls to the reporter’s residence and e-mailed a newspaper article about the weapons capabilities of a certain country that was within Sterling’s previous clandestine operational assignment.  While the possible newspaper article containing the classified information Sterling provided was ultimately not published in 2003, evidence showed that Sterling and the reporter remained in touch from December 2003 through November 2005 via telephone and e-mail.  In January 2006, the reporter published a book that contained classified information about the program and the human asset.

Evidence at trial showed that Sterling was aware of a grand jury investigation into the matter by June 2006, when he was served a grand jury subpoena for documents relating to the  reporter’s book.  Nevertheless, between April and July 2006, Sterling deleted the e-mail containing the classified information he had sent from his account in an effort to obstruct the investigation.

This case was investigated by the FBI’s Washington, D.C., Field Office, with assistance in the arrest from the FBI’s St. Louis Field Office.  This case was prosecuted by Deputy Chief Eric G. Olshan of the Criminal Division’s Public Integrity Section and Senior Litigation Counsel James L. Trump and Assistant U.S. Attorney Dennis Fitzpatrick of the Eastern District of Virginia. 

Spy Ring Attempted to Collect Economic Intelligence and Recruit New York City Residents as Intelligence Sources

Evgeny Buryakov, aka “Zhenya,” Worked Under “Non-Official Cover” as a Bank Employee in Manhattan

Attorney General Eric Holder, Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Preet Bharara for the Southern District of New York and Assistant Director Randall C. Coleman of the FBI’s Counterintelligence Division announced charges today against Evgeny Buryakov, aka “Zhenya,” Igor Sporyshev and Victor Podobnyy in connection with Buryakov’s service as a covert intelligence agent on behalf of the Russian Federation (Russia) in New York City, without notifying the U.S. Attorney General of Buryakov’s status as an agent of Russia, as required by federal law.  Buryakov was placed under arrest earlier today in Bronx, New York, and is scheduled to appear before U.S. Magistrate Judge Sarah Netburn in federal court in Manhattan later today.  Sporyshev and Podobnyy no longer reside in the United States and have not been arrested.  By virtue of their prior positions in the United States on behalf of Russia, both of them were protected by diplomatic immunity from arrest and prosecution while in the United States. 

“These charges demonstrate our firm commitment to combating attempts by covert agents to illegally gather intelligence and recruit spies within the United States,” said Attorney General Holder.  “We will use every tool at our disposal to identify and hold accountable foreign agents operating inside this country – no matter how deep their cover.  I want to thank the dedicated men and women of the FBI’s Counterintelligence Division and New York Field Office, the National Security Division’s Counterespionage Section and the U.S. Attorney’s Office for the Southern District of New York for their skilled handling of this complex and highly sensitive matter.”

“The attempt by foreign nations to illegally gather economic and other intelligence information in the United States through covert agents is a direct threat to the national security of the United States, and it exemplifies why counterespionage is a top priority of the National Security Division,” said Assistant Attorney General Carlin.  “I want to thank the FBI’s New York Field Office and Counterintelligence Division as well as the U.S. Attorney’s Office for the Southern District of New York for their continued effort to conduct these highly complex and sensitive counterespionage investigations and prosecutions, and for their continued close partnership with the National Security Division and the Counterespionage Section.”

“Following our previous prosecution with the FBI of Russian spies, who were expelled from the United States in 2010 when their plan to infiltrate upper levels of U.S. business and government was revealed, the arrest of Evgeny Buryakov and the charges against him and his co-defendants make clear that – more than two decades after the presumptive end of the Cold War – Russian spies continue to seek to operate in our midst under cover of secrecy,” said U.S. Attorney Bharara.  “Indeed, the presence of a Russian banker in New York would in itself hardly draw attention today, which is why these alleged spies may have thought Buryakov would blend in.  What they could not do without drawing the attention of the FBI was engage in espionage.  New York City may be more hospitable to Russian businessmen than during the Cold War, but my office and the FBI remain vigilant to the illegal intelligence-gathering activities of other nations.”

“This investigation is one of many that highlight the determined and prolific efforts by foreign governments to target Americans for the purposes of collecting intelligence and stealing secrets,” Assistant Director Coleman.  “This case is especially egregious as it demonstrates the actions of a foreign intelligence service to integrate a covert intelligence agent into American society under the cover of an employee in the financial sector.  Espionage is as pervasive today as it has even been, and FBI counterintelligence teams will continue to aggressively investigate and expose hostile foreign intelligence activities conducted on U.S. soil.”

According to the complaint unsealed in Manhattan federal court today:

Buryakov worked in the United States as an agent of Russia’s foreign intelligence agency, known as the SVR.  Buryakov operated under “non-official cover,” meaning he entered and remained in the United States as a private citizen, posing as an employee in the Manhattan office of a Russian bank.  SVR agents operating under such non-official cover – sometimes referred to as NOCs – typically are subject to less scrutiny by the host government, and, in many cases, are never identified as intelligence agents by the host government.  As a result, a NOC is an extremely valuable intelligence asset for the SVR.

Federal law prohibits individuals from acting as agents of foreign governments within the United States without prior notification to the U.S. Attorney General.  Department of Justice records indicate that Buryakov has never notified the U.S. Attorney General that he is, in fact, an agent of Russia.

Sporyshev and Podobnyy are also SVR agents who worked in the United States to gather intelligence on behalf of Russia by posing as official representatives of Russia.  From Nov. 22, 2010, to Nov. 21, 2014, Sporyshev served as a trade representative of the Russian Federation in New York.  From Dec. 13, 2012, to Sept. 12, 2013, Podobnyy served as an attaché to the Permanent Mission of the Russian Federation to the United Nations.  Based on their official government postings on behalf of Russia, Sporyshev and Podobnyy are exempt from notifying the U.S. Attorney General of the true nature of their work.  However, that exemption does not permit them to conspire with, or aid and abet, Buryakov in his work as an unregistered agent of Russia operating within the United States.

The intelligence-gathering efforts of Sporyshev and Podobnyy included, among other things, attempting to recruit New York City residents as intelligence sources for Russia; tasking Buryakov to gather intelligence; and transmitting intelligence reports prepared by Buryakov back to SVR headquarters in Moscow.  Specifically, during the course of the charged offenses, Sporyshev was responsible for relaying assignments from the SVR to Buryakov, and Sporyshev and Podobnyy were responsible for analyzing and reporting back to the SVR about the fruits of Buryakov’s intelligence-gathering efforts. 

The directives from the SVR to Buryakov, Sporyshev and Podobnyy, as well as to other covert SVR agents acting within the United States, included requests to gather intelligence on, among other subjects, potential U.S. sanctions against Russian banks and the United States’ efforts to develop alternative energy resources. 

Clandestine Meetings and Communications

During the course of their work as covert SVR agents in the United States, Buryakov, Sporyshev and Podobnyy regularly met and communicated using clandestine methods and coded messages, in order to exchange intelligence-related information while shielding their associations with one another as SVR agents.  These efforts were designed, among other things, to preserve their respective covers as an employee of a bank in Manhattan (Buryakov), a trade representative of the Russian Federation in New York (Sporyshev) and an attaché to the Permanent Mission of the Russian Federation to the United Nations (Podobnyy).  In particular, the defendants worked to safeguard Buryakov’s work as a NOC.

Sporyshev and Podobnyy acted as covert intermediaries for Buryakov to communicate with the SVR on intelligence-related matters.  As an agent posing as someone without any official ties to the Russian government or the SVR, Buryakov was unable to access the SVR New York Office – which is located within an office maintained by Russia in New York City – without potentially alerting others to his association with the SVR.  As such, Buryakov required the assistance of other SVR agents, like Sporyshev and Podobnyy, to exchange communications and information with the SVR through the communications systems located in the SVR New York Office.

From as early as March 2012 through as recently as mid-September 2014, the FBI has conducted physical or electronic surveillance of Buryakov and Sporyshev engaging in over 48 brief meetings, several of which involved Buryakov passing a bag, magazine or slip of paper to Sporyshev.  These meetings typically took place outdoors, where the risk of effective surveillance was reduced relative to an indoor location.

These meetings were nearly always preceded by a short telephone call between Buryakov and Sporyshev, during which one of the men typically told the other that he had an item to give to him.  Typically, during these telephone calls, which were intercepted by the FBI, the item in question was referred to as some non-specific ticket, book, list or other ordinary item (e.g., umbrella or hat).

Subsequently, at each meeting surveilled by the FBI, Buryakov and Sporyshev met and sometimes exchanged documents or other small items.  Notably, despite discussing on approximately 12 occasions the need to meet to transfer “tickets,” Buryakov and Sporyshev, were – other than one occasion where they discussed going to a movie – never observed attending, or discussing in any detail, events that would typically require tickets, such as a sporting event or concert.  In fact, Buryakov and Sporyshev used this coded language to signal that they needed to meet, and then met to exchange intelligence information.

Attempts by Sporyshev and Podobnyy to Recruit Intelligence Sources in New York City

In numerous recorded communications, Sporyshev and Podobnyy discussed their attempts to recruit U.S. residents, including several individuals employed by major companies, and several young women with ties to a major university located in New York City (University-1), as intelligence sources for the SVR.  On these recordings, the defendants discussed the potential value of these sources and identified particular sources by use of a “source name,” which appears to be a coded name.  In addition, during these recordings, Sporyshev and Podobnyy discussed the efforts of other SVR agents to recruit a number of other Russian-origin individuals associated with University-1 as intelligence sources. 

For example, Sporyshev and Podobnyy discussed Podobnyy’s efforts to recruit a male working as a consultant in New York City as an intelligence source.  During this conversation, Podobnyy explained his source recruitment method, which included cheating, promising favors and then discarding the intelligence source once the relevant information was obtained by the SVR: “This is intelligence method to cheat. . . . You promise a favor for a favor.  You get the documents from him and tell him to go [expletive] himself.”

In other recorded conversations, Sporyshev and Podobnyy made clear that they worked for the SVR.  For example, on Jan. 31, 2013, Sporyshev and another SVR agent not charged in the complaint (CC-1) had a discussion inside the SVR New York Office about their contracts with the SVR.  Sporyshev stated that, “Everyone has a five-year contract,” and explained, in response to CC-1’s question about reimbursement for the travel of SVR agents’ family members, that “travel for military personnel and their families on authorized home leave is paid, and in our, in our SVR, this, the payment for getting to and from the duty station.”  In addition, on April 25, 2013, Sporyshev and Podobnyy discussed the use of nontraditional cover for Russian intelligence officers and, in particular, the Illegals program that ended with the arrest of 10 “deep cover” SVR agents in July 2010. 

Buryakov’s Intelligence Taskings

Sporyshev was responsible for relaying intelligence assignments from the SVR to Buryakov.  The FBI obtained electronic recordings of several conversations relating to such intelligence directives being communicated to and carried out by Buryakov in his position as an SVR agent acting under non-official cover.  For example, on May 21, 2013, Sporyshev called Buryakov to ask for Buryakov’s help in formulating questions to be used for intelligence gathering purposes by others associated with a leading Russian state-owned news organization (the News Organization).  Buryakov responded by supplying Sporyshev with a particular line of questioning about the New York Stock Exchange for use by the News Organization.

Buryakov’s Receipt of Purported Official U.S. Government Documents

In the summer of 2014, Buryakov met numerous times with a confidential source working for the FBI (CS-1).  CS-1 posed as the representative of a wealthy investor looking to develop casinos in Russia.  During the course of these meetings, and consistent with his interests as a Russian intelligence agent, Buryakov demonstrated his strong desire to obtain information about subjects far outside the scope of his work as a bank employee.  During these meetings, Buryakov also accepted documents that CS-1 claimed he had obtained from a U.S. government agency and which purportedly contained information potentially useful to Russia, including information about U.S. sanctions against Russia.

*     *     *

Buryakov, 39, Sporyshev, 40, and Podobnyy, 27, are charged on two counts.  The first count charges the defendants with participating in a conspiracy for Buryakov to act in the United States as an agent of a foreign government without first notifying the Attorney General, and carries a statutory maximum penalty of five years in prison.  The second count charges Buryakov with acting in the United States as an agent of a foreign government without first notifying the Attorney General, and charges Sporyshev and Podobnyy with aiding and abetting that offense.  The second count carries a statutory maximum penalty of 10 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

The Attorney General is grateful for the investigative work of the FBI’s Counterintelligence Division.

The prosecution is being handled by Senior Trial Attorney Heather Schmidt of the National Security Division’s Counterespionage Section and Assistant U.S. Attorneys Adam Fee, Ian McGinley and Anna M. Skotko for the Southern District of New York’s Terrorism and International Narcotics Unit.

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

Buryakov, et al Complaint 

Joseph Arigo, 47, a former sergeant with the Fulton Police Department in Fulton, New York, was sentenced today in federal court to 15 months in prison and three years probation for beating a handcuffed man inside the Fulton police station.  In September 2014, Arigo pleaded guilty in federal court to one count of deprivation of rights under color of law.

According to court documents filed in connection with his guilty plea, Arigo was sitting at the sergeant’s desk on June 28, 2014, when a handcuffed man, G.B., was brought into the police station.  G.B. was yelling, but was not physically threatening any officers or himself.  Arigo pulled the video camera out of the wall to stop it from recording, walked into the room where G.B. was, shoved his head into the bench and punched him in the head multiple times.  G.B. suffered cuts and bruising, lost consciousness and required seven stitches.  After the incident, Arigo lied to his supervisors and in two official reports in an attempt to conceal his actions.

This case was investigated by the Syracuse Resident Agency of the Albany Division of the FBI and was prosecuted by Trial Attorney Dana Mulhauser of the Civil Rights Division of the Department of Justice. 

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida, Special Agent in Charge George Piro for the FBI’s Miami Field Office and the members of the South Florida Joint Terrorism Task Force announced that a West Palm Beach resident pleaded guilty to willful retention of classified national defense information pursuant to the Espionage Act, one count of computer intrusion pursuant to the Computer Fraud and Abuse Act, and one count of conspiracy to commit naturalization fraud, while employed as a computer systems administrator at a U.S. Military installation in Honduras.

Christopher R. Glenn, 34, gained unauthorized access to classified computer files containing national defense information that belonged to the Department of Defense and U.S. Southern Command’s Joint Task Force Bravo in Soto Cano Air Base, Honduras.  Once Glenn accessed those files, he copied classified information stored under the Joint Task Force Commander’s account, which information he retained. 

Glenn also conspired with his wife, Khadraa A. Glenn, 28, to commit naturalization fraud for her benefit by fabricating fraudulent documents and submitting false statements and the documents to the U.S. Citizenship and Immigration Services (USCIS).  Khadraa A. Glenn previously pleaded guilty to naturalization fraud conspiracy and was sentenced on Oct. 7, 2014.

“Christopher Glenn accessed, copied and retained classified information that belonged to the Department of Defense and the U.S. Southern Command’s Joint Task Force, without authorization,” said Assistant Attorney General Carlin.  “Systems administrators occupy a place of unique trust in an organization due to their extensive access to the cyber systems they maintain.  With today’s plea, Mr. Glenn is being held accountable for his violation of that trust.”

“Obtaining national defense information when you are not entitled to it is a serious threat to our national security,” said U.S. Attorney Ferrer.  “In committing this crime, Christopher Glenn abused his position of trust.  Violations of the espionage act and computer intrusion are unacceptable and we will continue to investigate and seek to hold accountable those who engage in it.”

“The Cold War may be over, but espionage, spies trying to steal our nation’s most valuable secrets are still at it,” said Special Agent in Charge Piro.  “More than ever, the FBI remains vigilant to protect critical national secrets and assets.  If you are aware of this type of activity, report it immediately to the FBI.”

Glenn is scheduled to be sentenced by U.S. District Judge Kenneth A. Marra, on April 17, 2015.

Assistant Attorney General Carlin would like to thank the investigative efforts of the FBI, U.S. Army’s 470th Military Intelligence Brigade, U.S. Army’s Criminal Investigations Division, the U.S. Southern Command (SOUTHCOM), USCIS, Internal Revenue Service, Department of Homeland Security and the South Florida Joint Terrorism Task Force.  The case is being prosecuted by Trial Attorney Christian Ford of the Counterespionage Section of the Department of Justice’s National Security Division and Assistant U.S. Attorney Ricardo Del Toro of the Southern District of Florida.

A Northville, Michigan, resident was sentenced today in U.S. District Court for the Eastern District of Michigan to serve 15 months in prison, five years of supervised released and was ordered to pay $394,000 in restitution to five defrauded banks for committing bank fraud, the Department of Justice announced. 

Wasseem Shamoun pleaded guilty on Aug. 12, 2014, to conspiracy to commit bank fraud.  The superseding indictment alleged that from approximately January 2006 to December 2008, Shamoun and his six other co-defendants conspired to defraud financial lending institutions to obtain residential mortgage loans by providing fraudulent information on loan applications.  According to court documents, the defendants devised a scheme to purchase single-family homes for approximately $5,000 to $40,000 each, and then recruited straw buyers to submit fraudulent loan applications for home mortgages substantially above the original purchase price.  The loan applications falsified the straw buyers’ assets, income and down payment, among other things.  The straw buyers were paid fees for their participation, which were sometimes falsely disguised as “landscaping” or “construction” fees.  The conspirators made a substantial profit and paid themselves commissions on the sales.  Every home purchased and sold as part of the scheme went into foreclosure.  According to court documents, Shamoun’s role in the conspiracy was to sell properties to the straw buyers.  He was directly responsible for a criminal loss of approximately $394,000. 

In addition to the seven individuals indicted in the case, two others connected to the scheme have pleaded guilty.  One individual is a straw buyer of multiple properties who received substantial fees as part of the scheme.  The other individual is a mortgage broker who assisted in the preparation of the false mortgage loan applications.  Both are awaiting sentencing in their cases.

This case was investigated by the FBI, IRS-Criminal Investigation and the Drug Enforcement Administration.  Senior Litigation Counsel Corey Smith and Trial Attorney Mark S. McDonald of the Justice Department’s Tax Division prosecuted the case.

A Plymouth, Michigan, resident was sentenced today in the U.S. District Court for the Eastern District of Michigan to serve 42 months in prison to be followed by one year of supervised release for committing wire fraud and tax evasion, the Justice Department and the Internal Revenue Service (IRS) announced. 

According to court documents, Michael Stover was the president of Omni Facility Services (Omni), a janitorial company located in Southfield, Michigan.  As part of his responsibilities as president, Stover approved and paid subcontractors of Omni.  Stover incorporated a fictitious subcontractor called Envirovac Inc., and from 2004 through 2010, he created fictitious invoices from Envirovac that billed Omni for work that was never performed.  Stover then approved payment of those invoices on Omni’s behalf.  The payments to Envirovac actually went to Stover.  Over the course of this scheme, Stover embezzled approximately $2.178 million from Omni.  On his federal income tax return for 2007, Stover failed to report the income that he had embezzled from Omni. 

The case was investigated by special agents of IRS-Criminal Investigation.  Trial Attorneys Yael T. Epstein and Kenneth C. Vert of the Tax Division prosecuted the case.        

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

A federal court in Las Vegas has permanently barred a husband and wife from preparing federal tax returns for others and from providing any advice related to federal taxes, the Justice Department announced today. 

Judge Richard F. Boulware II entered the injunction order after sanctioning Wayne Reeves and Diane Vaoga for willfully refusing to comply with previous court orders directing them to participate in discovery.  The court had warned Reeves and Vaoga that sanctions, including entry of the injunction against them, might be imposed for failure to comply with court orders.

In its injunction order, the court found that Reeves orchestrated and promoted, and that Vaoga assisted in, an illegal tax scheme.  According to the order, Reeves advised clients to set up sham trusts and have their wages directed into accounts for those trusts as a way to improperly reduce their tax liability.  Reeves also instructed clients to name him, Vaoga or another trusted third party as a signatory on their trust accounts.  Both Reeves and Vaoga acted as trustees and sent clients pre-signed blank checks to allow them access to their money, collecting fees in the process.  Reeves and Vaoga advised clients that there were numerous tax benefits associated with these trusts, including that the income from the trusts was nontaxable and did not need to be reported on tax returns; that clients could deduct personal expenses and count them as business expenses of the trusts; that clients worked for the trusts and thus were paid in tax-deductible management fees; that clients no longer needed to file federal tax returns; and that there were no problems with the Internal Revenue Service (IRS) in making these financial arrangements.  The court found that Reeves engaged in this conduct knowing that such actions would improperly result in the understatement of his customers’ tax liability.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2014.  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.      

A historic settlement reached with Anadarko Petroleum Corp. and Kerr McGee has gone into effect, allowing funds to be disbursed for cleanups across the country, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney Preet Bharara of the Southern District of New York, and Assistant Administrator Cynthia Giles of the U.S. Environmental Protection Agency (EPA).  

This settlement resolves fraudulent conveyance claims brought by the United States and the Anadarko Litigation Trust, the trust against Anadarko Petroleum Corporation and its affiliates, the defendants, in the bankruptcy of Tronox Inc. and its subsidiaries.  Today, pursuant to the settlement agreement, the defendants paid $5.15 billion, plus interest, to the trust.  The trust is expected to distribute more than $4.4 billion to fund environmental clean-up and for environmental claims.  The settlement constitutes the largest payment for the clean-up of environmental contamination ever obtained in a lawsuit brought by the Department of Justice.

 “This recovery will lead to cleanups across the country that will undo lasting damage to the environment, including contamination of tribal lands, by Kerr-McGee’s businesses,” said Assistant Attorney General Cruden.  “This result emphatically demonstrates the Justice Department’s commitment to environmental justice for all Americans, and it fulfills the department’s promise to hold accountable those who pollute and those who try to foist their responsibility for cleanup on the American taxpayer.”

“The Kerr-McGee Corporation spent decades despoiling our nation’s natural resources, leaving a toxic legacy for communities across the nation, from Sidney, New York, to the Navajo nation,” said U.S. Attorney Bharara.  “Then, Kerr-McGee tried to escape the consequences of its misdeeds by transferring its most valuable assets to affiliates, leaving an insolvent shell behind, unable to pay its environmental liabilities.  As today’s historic payment shows, the government will not allow polluters to escape paying for the damage they inflict on our land, water and people, and we will hold accountable those who attempt to shield themselves from responsibility behind improper corporate transactions.”

“If you pollute the environment, you should be responsible for cleaning it up,” said EPA Assistant Administrator Giles.  “From the Navajo Nation to low income neighborhoods across America, more than $4.4 billion will be put to work cleaning up toxic pollution.  This historical environmental cleanup will have a lasting impact on American communities.”

As noted by U.S. District Judge Katherine B. Forrest, in approving the settlement in November, this case arises from a “series of transactions by the Kerr-McGee Corp. that resulted in the spin-off of Tronox, which Kerr-McGee left saddled with the massive environmental and tort liabilities it had accumulated over the course of decades of operating in the chemical, mining, and oil and gas industries, but without sufficient assets with which to address these liabilities.”  For this reason, as the district court explained, both the United States and the Tronox estate, now represented by the trust, brought fraudulent conveyance claims against the defendants.

On April 3, 2014, the United States announced this settlement resolving the claims against the defendants, which was then subject to a period of public comment and judicial approval.  After receiving and considering comments from the public, the United States sought approval of the settlement agreement, and on Nov. 10, 2014, the district court approved the settlement as “fair and reasonable.”  The deadline for any appeals from the district court’s decision passed on Jan. 20, 2015, without any appeals having been taken and therefore the settlement agreement went into effect on Jan. 21, 2015.

Today, under the settlement agreement, the defendants paid $5.15 billion, plus interest from Apr. 3, 2014, to the trust.  Pursuant to the terms of prior agreements in the Tronox bankruptcy, the government estimates that more than $4.4 billion of this recovery will be paid to the United States, state governments, the Navajo nation and four environmental response trusts created in the bankruptcy to clean up contaminated property.  An estimated more than $600 million will be paid to a trust created to pay tort victims.

This case was handled by the Environmental Protection Unit and the Tax and Bankruptcy Unit of the Office’s Civil Division.  Assistant U.S. Attorney Robert William Yalen is in charge of the case, which he handled along with Assistant U.S. Attorney Joseph Pantoja and Alan S. Tenenbaum, Katherine Kane, Frederick S. Phillips, Marcello Mollo, and Erica Pencak of the Department of Justice’s Environment and Natural Resources Division. 

The Department of Justice and the Federal Trade Commission (FTC) will host a joint public workshop, Examining Health Care Competition, on Feb. 24 and 25, 2015, in the Constitution Center Auditorium located at 400 7th Street, S.W., Washington, D.C., 20024.

The workshop will study recent developments related to health care provider organization and payment models, with an emphasis on how they may affect competition in the provision of health care services.  Specific discussion topics may include early observations regarding accountable care organizations; alternatives to traditional fee-for-service payment models; trends in provider consolidation; trends in provider network and benefit design strategies, as well as contracting practices and regulatory activity that may enhance or undermine these strategies; and early observations regarding health insurance exchanges.

The workshop will be webcast live on the FTC’s website.  Registration information, an agenda, directions to the FTC Conference Center and a list of speakers will be available on the event web page.  Advance registration is not required, but is strongly encouraged.

Public comments should be submitted by Feb. 16, 2015, to be considered for the workshop.  Interested persons can continue to submit comments through April 30, 2015.  Suggested comment topics, and instructions on how to submit comments online and by mail, can be found in the Federal Register notice.

Reasonable accommodations for people with disabilities who wish to attend the workshop in person are available upon request.  Requests should be submitted via email to lkittleson@ftc.gov or by calling Lara Kittelson at 202-326-3388.  Requests should be made in advance.  Please include a detailed description of the accommodation needed and provide contact information.                                                                                                                       

Press contacts:

Department of Justice
Office of Public Affairs
Emily Pierce
202-514-2007

Federal Trade Commission
Office of Public Affairs
Betsy Lordan
202-326-3707

Staff contacts:

Department of Justice
Antitrust Division, Office of Legal Policy
Patrick M. Kuhlmann
202-305-4639

Federal Trade Commission
Office of Policy Planning
Stephanie A. Wilkinson
202-326-2084

 

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney John Walsh of the District of Colorado and Special Agent in Charge Thomas Ravenelle of the FBI’s Denver Division announced that Shannon Conley, 19, of Arvada, Colorado, was sentenced today by U.S. District Court Judge Raymond P. Moore to serve 48 months in federal prison, followed by 3 years on supervised release with 100 hours of community service, for conspiracy to provide material support to a designated foreign terrorist organization.  Conley, who appeared at the hearing in custody, was remanded at its conclusion. 

Conley was first charged by criminal complaint on April 9, 2014.  She was indicted by a federal grand jury in Denver on Sept. 10, 2014.

According to court documents, including the stipulated facts in the plea agreement, from about February 2014 and continuing through April 8, 2014, Conley and a co-conspirator unlawfully worked together and with other individuals to provide and attempt to provide material support and resources to a designated foreign terrorist organization, specifically Al-Qaeda (AQ) and Al-Qaeda in Iraq (AQI), aka the Islamic State of Iraq (ISI), aka the Islamic State of Iraq and Al Sham (ISIS), aka the Islamic State of Iraq and the Levant (ISIL).

The conspiracy was accomplished, in part, when Conley met the co-conspirator on the Internet.  During their communications, they shared their view of Islam as requiring participation in violent jihad.  The co-conspirator communicated to Conley that he was an active member of a group fighting in Syria known as ISIS.  The two then decided to become engaged and worked together to have Conley travel to Syria to join her new fiancé.  Before traveling to Syria, Conley refined and obtained additional training and skills in order to provide support and assistance to any AQ and/or ISIS fighter.  Conley also intended to fight if it became necessary to do so.

In furtherance of the conspiracy, Conley joined the U.S. Army Explorers (USAE) to be trained in U.S. military tactics and in firearms.  She traveled to Texas and attended the USAE training.  She also obtained first aid/nursing certification and National Rifle Association certification.  Conley knew that ISIS was a designated foreign terrorist organization.  In fact, on numerous occasions, Special Agents with the FBI met with her in attempts to persuade her not to carry out her plans to travel overseas to provide support to a foreign terrorist organization and to engage in violent jihad.  On March 29, 2014, the co-conspirator, together with others, arranged for an airline ticket to be purchased for Conley to travel to Turkey, departing from Denver on April 8, 2014.  On April 8, 2014, Conley traveled to Denver International Airport and attempted to board the flight to Turkey.  She was then arrested by FBI agents.

A subsequent search of Conley’s home revealed DVDs of Anwar Al-Awlaki lectures and a number of books and articles about AQ, other terrorist groups and jihad.  Agents also recovered shooting targets labeled with the number of rounds fired and distances.

“Conspiring to providing material support to a foreign terrorist organization is a serious federal crime,” said U.S. Attorney John Walsh.  “The defendant in this case got lucky.  The FBI arrested her after determining that she had been radicalized and planned to travel to Syria to support the brutal foreign terrorist organizations operating there.  Had she succeeded in her plan to get to Syria, she would likely have been brutalized, killed or sent back to the United States to commit other crimes.  Today’s sentence underscores the seriousness of defendant’s conduct, but pales in comparison to the penalty she would have paid had she not been stopped.”

“This sentencing highlights the rapidly changing, shrinking nature of the world and the implications for law enforcement and public safety,” said Special Agent in Charge Thomas Ravenelle.  “Terrorist groups now have the ability to directly attract and even recruit U.S. residents to commit violence or provide other support on their behalf.  Anyone in our community who takes deliberate steps to commit federal crimes in support of a declared terrorist organization will have those steps disrupted and will be arrested and prosecuted whenever appropriate and necessary in order to preserve the safety of our community.”

This case was investigated by the FBI and the Arvada Police Department.

The defendant was prosecuted by Assistant U.S. Attorney Greg Holloway of the District of Colorado, with the assistance of Jennifer Levy of the National Security Division’s Counterterrorism Section.

Defendant Allegedly Aided Suicide Bomb Attack on U.S. Base in Iraq

U.S. Attorney Loretta E. Lynch for the Eastern District of New York, Assistant Attorney General for National Security John P. Carlin, Assistant Director-in-Charge George Venizelos of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department announced that tomorrow, Jan. 24, 2015, Faruq Khalil Muhammed ‘Isa, aka “Faruq Khalil Muhammad ‘Isa,” “Sayfildin Tahir Sharif,” and “Tahir Sharif Sayfildin,” will have his initial appearance at the federal courthouse in Brooklyn, New York, on charges of conspiring to kill Americans abroad; and providing material support to a terrorist conspiracy to kill Americans abroad.  ‘Isa was extradited to the United States from Canada. 

According to court documents, the defendant is charged in connection with his support for a multinational terrorist network that conducted multiple suicide bombings in Iraq.  According to the complaint, filed on Jan. 14, 2011, in the Eastern District of New York, the defendant assisted in orchestrating an attack on the United States Military’s Forward Operating Base Marez (FOB Marez) in Mosul, Iraq, on April 10, 2009.  A truck laden with explosives drove to the gate of FOB Marez and exchanged fire with Iraqi police officers guarding the base and then with an American convoy exiting the base.  The truck detonated alongside the last vehicle in the U.S. convoy, leaving a 60-foot crater in the ground.  Five American soldiers were killed in the blast.  They are:  Staff Sergeant Gary L. Woods, 24, of Lebanon Junction, Kentucky; Sergeant First Class Bryan E. Hall, 32, of Elk Grove, California; Sergeant Edward W. Forrest Jr., 25, of St. Louis, Missouri; Corporal Jason G. Pautsch, 20, of Davenport, Iowa; and Army Private First Class Bryce E. Gaultier, 22, from Cyprus, California. 

“Today’s extradition demonstrates to those who orchestrate violence against our citizens and our soldiers that there is no corner of the globe from which they can hide from the long reach of the law,” said U.S. Attorney Lynch.  “We will continue to use every available means to bring to justice those who are responsible for the deaths of American servicemen and women who paid the ultimate price in their defense of this nation.” 

“Faruq Khalil Muhammed ‘Isa is alleged to have helped orchestrate an attack that killed five U.S.  soldiers at the Forward Operating Base Marez in Mosul, Iraq, in 2009,” said Assistant Attorney General Carlin.  “The families of these five Americans and all who have lost loved-ones to acts of terrorism should know that we will never cease seeking to hold terrorists accountable for their acts.  I want to thank the many agents, analysts and prosecutors who are responsible for this matter.”

“As alleged, Faruq Khalil Muhammad ‘Isa was involved in the most callous act: a suicide bombing murdering U.S. soldiers in Iraq,” said Assistant Director in Charge Venizelos.  “Our memory is long, and our reach is longer.  Today we hope to bring some measure of justice to the families of those five servicemen who sacrificed their lives in defense of this nation.”

“I want to commend the United States Attorney Loretta Lynch and her team for working closely with the NYPD and the FBI to extradite this individual who is allegedly responsible for the death of soldiers sworn to protect and serve,” said Commissioner Bratton.  “We hope today’s extradition will bring some closure to the families.”

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

The government’s case is being prosecuted by Assistant U.S. Attorneys Zainab Ahmad, Alexander Solomon and Peter Baldwin, with assistance provided by the Justice Department’s Counterterrorism Section and Office of International Affairs.  The department extends its grateful appreciation to the Canadian government for its assistance and cooperation in the extradition.

Faruq Complaint 

Faruq Indictment 

Defendant Admits To Targeting Parents Of Hospitalized Children, Among Others

A Maryland woman pleaded guilty today in connection with her involvement in a sophisticated identity theft ring that stole the identities of over 600 individuals in Washington, D.C., and surrounding areas with an estimated loss of well over $1 million.  Fifteen members of the fraud ring—which targeted, among others, the parents of sick and injured kids receiving treatment at a children’s hospital in Washington, D.C.—have been convicted so far as a result of this investigation.

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 Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Kathy A. Michalko of the U.S. Secret Service’s Washington Field Office made the announcement after the guilty plea was accepted by U.S. District Judge Claude M. Hilton of the Eastern District of Virginia.

“Identity theft wreaks havoc on the lives of American citizens every year,” said Assistant Attorney General Caldwell.  “But this group took the distress to a new level by targeting the parents of hospitalized children and stealing their identities, as well as those of other customers and members of businesses in the Washington, D.C., area.  Along with our law enforcement partners, the Criminal Division is committed to protecting the privacy and financial security of the American people from both foreign and domestic thieves.”

Leah Shanae Elliott, 22, of Clinton, Maryland, pleaded guilty to one count of conspiracy to commit bank fraud, access device fraud and identity theft.  A sentencing hearing is scheduled for April 24, 2015, before Judge Hilton.   

In a statement of facts filed with her plea agreement, Elliott admitted that she was a member of a large-scale identity theft ring that operated in the Washington, D.C., metropolitan area and elsewhere.  According to Elliott, members of the ring used their employment at local businesses and nonprofits—including banks, credit unions, medical and dental centers, employee associations, restaurants and stores—to access and steal personally identifiable information (PII) such as social security numbers, addresses, and dates of birth, as well as debit and credit card information.  The conspirators then used this stolen information to manufacture fraudulent driver’s licenses and other identifications, as well as fraudulent debit and credit cards.  Conspirators used the fake identifications and debit or credit cards to establish lines of credit, purchase merchandise at retail establishments, make unauthorized withdrawals from victims’ bank accounts and manufacture and cash counterfeit checks. 

Elliott specifically admitted that that she stole PII and debit and credit card information at the restaurant at which she worked, and used stolen PII and fraudulent driver’s licenses to open lines of credit and obtain rental vehicles, computers, televisions, cameras, watches, jewelry and other items under victims’ names.  She also admitted that she retrieved “skimming” devices loaded with stolen PII and debit and credit card information from other members of the conspiracy and used those devices to transfer the stolen information into fake identifications and debit and credit cards. 

Further, Elliott admitted that she solicited her mother—a credit and collections representative at a children’s hospital in Washington, D.C.—to steal the identities of parents of sick or injured children, and that after a further request from one of the ring’s leaders, her mother ultimately provided 78 stolen “profiles” from the hospital. 

Members of the fraud ring previously convicted include:

• Erin Lyles-Armstrong, 34, of Germantown, Maryland, who pleaded guilty to one count of aggravated identity theft on Feb. 1, 2012;

• Justin Gatling, 28, of Silver Spring, Maryland, who pleaded guilty to one count of exceeding authorized access to information stored in a computerized financial record of a financial institution on March 29, 2012;

• Segale Battle, 30, of Capitol Heights, Maryland, who pleaded guilty to identity theft on Sept. 15, 2013;

• Rungnatee Pearson, 45, of Bronx, New York, who pleaded guilty to one count of access device fraud on Sept. 18, 2013;

• Jamille Ferguson, 31, of Dumfries, Virginia, who pleaded guilty to one count of access device fraud and one count of aggravated identity theft on Oct. 8, 2013;

• Christopher Bush, 30, of New York, New York, who pleaded guilty to one count of bank fraud, one count of access device fraud and one count of aggravated identity theft on Oct. 11, 2013;

• Jenaro Blalock, 31, of Clinton, Maryland, who pleaded guilty to one count of access device fraud and one count of aggravated identity theft on Oct. 29, 2013;

• Kevin Middleton, 32, of McClellanville, South Carolina, who pleaded guilty to one count of access device fraud on Dec. 16, 2013;

• Adrienne Pritchett, 42, of District Heights, Maryland, who pleaded guilty to one count of bank fraud and one count of aggravated identity theft on Oct. 3, 2013;

• Tekia Thomas, 22, of Alexandria, Virginia, who pleaded guilty to one count of access device fraud on Oct. 8, 2013;

• Elizabeth Monika Hunter, 20, of Fredericksburg, Virginia, who pleaded guilty to one account of access device fraud on Jan. 28, 2014;

• LaShawn Powell, 35, of Upper Marlboro, Maryland, who pleaded guilty to one count of making false statements on April 15, 2014;

• Detrius Elliott, 43, of Clinton, Maryland, who pleaded guilty to one count of identity theft on May 29, 2014; and

• Chantel Thompson, 22, of Washington, D.C., who pleaded guilty to one count of conspiracy to commit bank fraud, access device fraud, and identity theft on Jan. 9, 2015.

Most of the defendants have already been sentenced.  Last year Judge Hilton sentenced Blalock and Bush, two of the leaders of the ring, to 12 years in prison and 10 years in prison, respectively.  Blalock was also ordered to pay $614,685.58 in restitution.

The U.S. Secret Service led this investigation, with significant assistance from the U.S. Postal Inspection Service, U.S. Department of Agriculture’s Office of Inspector General, U.S. Office of Personnel Management’s Office of Inspector General, Montgomery County Police Department, Fairfax County Police Department, City of Fairfax Police Department, D.C. Metropolitan Police Department, Metropolitan Washington Airports Authority, Prince George’s County Police Department’s Washington Area Vehicle Enforcement Unit and others.  The cases are being prosecuted by Senior Counsels Matthew A. Lamberti and Peter V. Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Tamera Fine of the District of Maryland.

Attorney General Eric Holder announced today the appointment of United States Attorney John F. Walsh for the District of Colorado as chair of the Attorney General’s Advisory Committee of United States Attorneys (AGAC).  Attorney General Holder also appointed United States Attorney Richard S. Hartunian for the Northern District of New York to serve as vice chair.  Both appointments are effective immediately.

“Throughout their respective tenures in Colorado and the Northern District of New York, John Walsh and Richard Hartunian have been thoughtful leaders of the United States Attorney community, fierce advocates for the citizens they serve, and champions of the cause of justice,” said Attorney General Holder.  “Each of them has been instrumental in addressing sensitive legal issues, handling difficult cases, and shaping and implementing critical Smart on Crime reforms.  I thank John and Richard for agreeing to lead the Attorney General’s Advisory Committee – and for lending their perspectives and deep experience to the pressing policy questions about which I, and Attorney General-designate Loretta Lynch, will surely look to them for guidance and counsel.”

U.S. Attorney Walsh previously served on the AGAC from February 2011 to January 2013 as the chair of the Medical Marijuana Working Group and co-chair of the White Collar/Fraud Subcommittee.  He replaces U.S. Attorney for the Eastern District of New York and Attorney General nominee Loretta E. Lynch. 

U.S. Attorney Hartunian was appointed to the AGAC in April 2013 and has served as the chair of the Border and Immigration Subcommittee in addition to serving on several committees.  He replaces Acting Deputy Attorney General and former U.S. Attorney for the Northern District of Georgia Sally Quillian Yates.

Attorney General Holder also thanked U.S. Attorney Lynch and Acting Deputy Attorney General Yates for serving as chair and vice chair of the AGAC for the past two years.

“I want to express my heartfelt personal thanks to both Loretta Lynch and Sally Yates for their outstanding leadership of the Attorney General’s Advisory Committee,” said Attorney General Holder.  “It has been a pleasure and a privilege to work closely with them on a range of critical issues over the years.  I am both proud and deeply gratified that the American people will continue to benefit from their service in the new roles to which President Obama has nominated them.  And I am confident that the Department of Justice will only grow stronger under their leadership as Attorney General and Deputy Attorney General, respectively.”

The AGAC was created in 1973 to serve as the voice of the United States Attorneys and to advise the Attorney General on policy, management and operational issues impacting the offices of the United States Attorneys.

The Department of Justice today announced that Judge Amy Totenberg of the United States District Court for the Northern District of Georgia sentenced two defendants, Arturo Rojas-Coyotl, 28, and Odilon Martinez-Rojas, 43, both of Tenancingo, Tlaxcala, Mexico, to 192 months and 262 months in prison, respectively, for their roles in compelling three young women to prostitute in the Atlanta, Georgia., area.  In imposing the sentences, United States District Court Judge Totenberg also ordered the defendants to pay $180,000 in restitution to the victims. 

“Human trafficking is modern-day slavery-- period. No matter the label, the of use violence, intimidation, psychological coercion, deception, or fear to exploit fellow human beings is repugnant,” said Acting Deputy Attorney General Sally Quillian Yates.  “The long sentences handed down today are just one of the latest examples of the Justice Department's unshakable resolve to dismantle human trafficking networks and prosecute those who would commit these unspeakable crimes against some of the most vulnerable in our society."  Yates’ previous service as United States Attorney from 2010 to 2015 included making her district—the Northern District of Georgia—one of several key U.S. districts engaged in the Bilateral Human Trafficking Enforcement Initiative.

In October 2014, the defendants pleaded guilty to three counts of sex trafficking and three related immigration violations pertaining to three separate victims of their sex trafficking scheme.  According to the indictment and documents filed in court, in early 2006, Rojas-Coyotl lured a young Mexican national of indigenous heritage using false promises of love, legitimate work and a better life to induce her to travel with him into the United States.  Upon her arrival in the United States, Rojas-Coyotl and Martinez-Rojas used physical violence, threats, intimidation, deception and psychological manipulation to compel her to engage in prostitution, for the defendants’ profit, in Georgia and Alabama, for over a year and half until she escaped in November 2007. 

In March 2007, Rojas Coyotl and Martinez started romancing two young Guatemalan women and lured them to the United States in October 2007, under the same false pretenses.  The defendants then employed a nearly identical coercive scheme to compel the young women to prostitute in Georgia and Alabama before they escaped at separate times in early 2008. 

The defendants made the young women fearful of law enforcement and thus, the victims did not immediately come forward.  Once investigators did find and speak to them, the details of the trafficking emerged: the defendants ran a high volume, low cost business compelling the young women to have sex, at times with upwards of 20 men a night in 15 minute increments, for payment of $30- $35.  The money earned by the victims was split between the defendants and others who drove the young women to the clients.  One of the young women became ill and suffered great pain due to the repeated commercial sex acts she had to endure.

Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative, aimed at strengthening high-impact prosecutions under both U.S. and Mexican law, in order to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, restore the rights and dignity of human trafficking victims and reunite victims with their children held under the trafficking networks’ control.  These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of over 50 defendants in multiple cases in Georgia, New York, Florida, and Texas since 2009, in addition to numerous Mexican federal and state prosecutions of associated sex traffickers.

“These defendants targeted vulnerable individuals, preying on their hopes and dreams, dominating and deceiving them, and selling their bodies to strangers, all so the defendants could collect thousands of dollars in prostitution proceeds while the victims lived in fear, denied control over their own lives,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “The Civil Rights Division is unwavering in its commitment to bringing human traffickers to justice and restoring the rights and dignity of the courageous survivors of all forms of modern-day slavery.”

“Sex trafficking is a horrendous crime that robs the victims of their freedom and dignity, leaving them feeling isolated and powerless,” said Acting United States Attorney John Horn for the Northern District of Georgia.  “This case hits new lows in depravity given the number of times these girls were victimized each day.  These defendants are being held accountable by U.S. laws which protect all victims of human trafficking.”

A third co-defendant, Daniel Garcia-Tepal, pleaded guilty to related immigration offenses.  A fourth co-defendant, Severiano Martinez-Rojas, remains a fugitive.

“This case represents one of the worst examples of human trafficking and why it is such a priority matter for not only law enforcement but for the many non-government agencies who help law enforcement in reporting human trafficking and providing assistance to those with nowhere else to turn,” said Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Office.  “The FBI urges anyone with information regarding human trafficking activities to contact authorities and help put an end to modern day slavery.”

“The defendants mercilessly manipulated, abused and exploited these women in a criminal scheme that is all too common in our communities,” said Acting Special Agent in Charge Ryan L. Spradlin of ICE Homeland Security Investigations in Atlanta.  “Sex trafficking and other forms of human trafficking are a scourge on our society that HSI is dedicated to ending.”

This case was investigated by the Federal Bureau of Investigations and the Department of Homeland Security’s Homeland Security Investigations.  It is being prosecuted by Trial Attorney Benjamin J. Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit and Assistant United States Attorney Susan Coppedge of the Northern District of Georgia. 

U.S. District Judge Ronnie Greer sentenced five people to prison terms in federal court in Greeneville, Tennessee, late yesterday for conspiring to commit Clean Air Act offenses in connection with the illegal removal and disposal of asbestos-containing materials at the former Liberty Fibers Plant in Hamblen County, Tennessee, the Justice Department announced.  A&E Salvage had purchased the plant out of bankruptcy in order to salvage metals which remained in the plant after it ceased operations.

U.S. District Judge Greer sentenced Mark Sawyer, 55, of Morristown, Tennessee, a former manager of A&E Salvage, to the statutory maximum of five years in prison, to be followed by two years of supervised release.  A&E Salvage manager Newell Lynn Smith, 59, of Miami, Florida, was sentenced to 37 months and two years of supervised release.  A&E Salvage Manager Eric Gruenberg, 50, of Lebanon, Tennessee, received a 28-month sentence.  Armida, 56, and Milto DiSanti, 54, of Miami, Florida, each received sentences of six months in prison, to be followed by six months of home confinement.  The judge ordered all the defendants to pay restitution of more than $10.3 million, which will be returned to Environmental Protection Agency’s (EPA) Superfund, which was used to clean up the plant site contamination. 

The sentencing took place over three days and included expert testimony that the exposures of the A&E Salvage workers to asbestos resulted in a substantial likelihood that the workers would suffer death or serious bodily injury as a result of their exposure constituted a risk of death or serious bodily injury.

“These co-conspirators took unacceptable and illegal risks with workers lives and the community’s health,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division.  “These significant sentences should send a message that illegal asbestos removal can have serious consequences, including a prison term for those responsible.”

According to court documents, all the defendants pleaded guilty to one criminal felony count for conspiring to violate the Clean Air Act’s “work practice standards” salient to the proper stripping, bagging, removal and disposal of asbestos.  According to the charges, the conspirators, engaged in a multi-year scheme in which substantial amounts of regulated asbestos containing materials were removed the former Liberty Fibers plant without removing all asbestos prior to demolition and stripping, bagging, removing and disposing of such asbestos in illegal manners and without providing workers the necessary protective equipment.  Asbestos has been determined to cause lung cancer, asbestosis and mesothelioma, an invariably fatal disease.  The EPA has determined that there is no safe level of exposure to asbestos. 

“We take our responsibility to protect the environment of East Tennessee very seriously, especially when it involves the health and safety of its residents,” said U.S. Attorney Bill Killian of the Eastern District of Tennessee.  “We will continue to aggressively prosecute those who violate the laws restricting substances which can potentially cause serious diseases.  EPA, TDEC, Senior Trial Attorney Todd Gleason and Assistant U.S. Attorney Matthew Morris should be commended for their combined efforts which resulted in a successful outcome in this case.”

“Illegal disposal of asbestos endangers human health, plain and simple,” said Special Agent in Charge Maureen O’Mara of EPA’s Criminal Enforcement Program in Tennessee.  “The defendants conspired to violate the Clean Air Act by hiring untrained workers to remove materials, without proper safety equipment, that contained asbestos.  This put not only the workers’ health and safety at great risk, but that of the entire community.  Today’s sentencing demonstrates that EPA and its partner agencies will prosecute those who pollute the environment by breaking the law.”

This case was investigated by Special Agents of the Environmental Protection Agency and individuals from the Tennessee Department of Environmental Conservation.  The case was prosecuted by Assistant U.S.  Attorney Matthew T. Morris and Senior Trial Attorney Todd W. Gleason, Environmental Crimes Section of the Department of Justice.

ALICIA A.G. LIMTIACO, United States Attorney for Guam and the Northern Mariana Islands, announced that defendant KUN SUP SONG, age 57, was sentenced yesterday by Chief Judge Frances Tydingco-Gatewood in the District Court of Guam, to serve five years of probation with conditions to include eight months of home confinement, and to pay $170,021 in restitution to the U.S. Department of Agriculture’s (“USDA”) Food and Nutrition Service.  Also, Judge Tydingco-Gatewood ordered a $70,000 money judgment of forfeiture; and the forfeiture of approximately $38,000 and a Toyota 4Runner involved in the fraud which had been seized by the Federal Bureau of Investigation.  SONG owned and operated Sky Mart, a small convenience store in Yigo.  He pleaded guilty on March 27, 2014 to unauthorized use of food stamp benefits.

SONG’s store participated in the Supplemental Nutrition Assistance Program (“SNAP”), previously known as the Food Stamp Program.  Under SNAP, authorized recipients are issued a certain amount of benefits each month, which they may use to purchase eligible food items.  SNAP recipients receive their benefits in the form of a credit on their personal electronic benefit transfer (“EBT”) card.  SNAP benefits may not be used to purchase ineligible items, and cannot be redeemed for cash, loans, or items sold on credit.

U.S. Attorney Limtiaco states "Opportunistic store owners who take advantage of our low-income population, by adding interest for items bought on credit, unlawfully take monies that food stamp card holders could have used on food.  Food stamp card holders cannot be discriminated against by charging them interest.  Retailers who do not follow SNAP regulations by concealing they are selling items on credit, or redeeming food stamp cards for cash or loans, will not be tolerated and are subject to criminal prosecution."

From January 1, 2011 to August 4, 2013, the defendant engaged in a scheme to defraud and fraudulently obtain money in excess of $170,000 from the USDA.  The defendant used his business to redeem SNAP benefits in exchange for extending credit to SNAP recipients, and payment on their credit accounts with Sky Mart.  The defendant also redeemed SNAP benefits for ineligible purchases made by customers.  As part of the scheme, the defendant engaged in fictional and illegal transactions with SNAP recipients that purported to be for eligible food items.

Through the hard work of the Federal Bureau of Investigation and USDA Office of Inspector General's Office, in August 2013, law enforcement were able to seize a portion of the proceeds of the fraud and a vehicle which helped facilitate the fraud.

U.S. Attorney Limtiaco stated, “The Court’s forfeiture order effectively results in taking the profit out of this food stamp fraud. The defendant's scheme to defraud involved the SNAP program, which is designed to supplement the income of eligible members of the community and ensure families can afford the groceries they need.  When opportunistic retailers defraud the system, limited tax dollars are diverted from their intended use.”

The case was investigated by the Federal Bureau of Investigation and USDA Office of Inspector General.  Assistants U.S. Attorney Marivic David and Belinda Alcantara prosecuted the case.

A federal court in Greenville, Mississippi, has permanently barred Nathaniel Kimble from preparing federal income tax returns for others, the Justice Department announced today. 

The civil injunction order, to which Kimble consented, was signed by Judge Debra M. Bowen of the U.S. District Court for the Northern District of Mississippi. 

According to the complaint, from 2010 through the present, Kimble prepared tax returns under the business name Kimble Tax Services in Greenville, Mississippi.  The complaint alleges that Kimble learned how to prepare tax returns by working with Alice Mobley.  Mobley, who was sentenced to serve 75 months in prison after pleading guilty to three charges related to her tax return practices in Alabama, admitted in her criminal case that she conspired with workers of Kimble Tax Services to file tax returns she knew were fraudulent.  In this regard, the complaint alleged that Kimble knowingly prepared federal income tax returns for customers that understated the customers’ tax liability and overstated refunds they claimed by inflating or fabricating earned income tax credits that his customers were not eligible to take.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2014.  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.  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. 

A Detroit federal grand jury returned a one-count indictment against an executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to fix prices of seatbelts, the Department of Justice announced today.

The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Hiromu Usuda, an executive at Takata Corp., with conspiring to rig bids for, and to fix, stabilize and maintain the prices of, seatbelts sold to Toyota Motor Corp., Honda Motor Company Ltd., Nissan Motor Co. Ltd., Mazda Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and/or certain of their subsidiaries, for installation in vehicles manufactured and sold in the United States and elsewhere.  Usuda served as Group and Department Manager in the Customer Relations Division at Takata, from January 2005 until at least February 2011.

“Antitrust violators who refuse to accept responsibility for their crimes leave us no choice but to indict,” said Brent Synder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “We will continue to prosecute those that commit these crimes.”

The indictment alleges, among other things, that from at least Jan. 1, 2005, through at least February 2011, Usuda and others attended meetings with co-conspirators and reached collusive agreements to rig bids, allocate the supply and fix the prices of seatbelts sold to the automobile manufacturers.  It alleges that Usuda participated directly in the conspiratorial conduct and that he directed, authorized and consented to his subordinates’ participation.

Takata is a Tokyo-based manufacturer of automotive parts, including seatbelts.  Takata supplies automotive parts to automobile manufacturers in the United States, in part, through its U.S. subsidiary, TK Holdings Inc., located in Auburn Hills, Michigan.  Takata pleaded guilty on Dec. 5, 2013, for its involvement in the conspiracy, and was sentenced to pay a criminal fine of $71.3 million.  Four other executives from Takata have pleaded guilty, have been sentenced to serve time in a U.S. prison and to pay criminal fines for their roles in the conspiracy.

Including Usuda, 50 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Additionally, 32 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.4 billion in fines.

Usuda is charged with price fixing 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 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 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 four of 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.

A San Jose, California, woman was sentenced to serve 22 months in prison to be followed by three years of supervised release for committing tax fraud and bank fraud, Principal Deputy Assistant Attorney General Caroline D. Ciraolo for the Justice Department’s Tax Division and U.S. Attorney Melinda Haag for the Northern District of California announced today. 

Elena Moreno, 40, was also ordered to pay $422,962.13 in restitution and to forfeit $3.328 million as well as her interest in two pieces of real property.  Prior to pleading guilty in this case, Moreno and her co-defendants, Arturo and Fidencio Moreno, paid more than $200,000 in restitution to the Internal Revenue Service (IRS) for losses associated with their fraud.

According to court documents, beginning in 2005 and continuing through at least 2010, family members Arturo Moreno, Elena Moreno and Fidencio Moreno conspired to defraud the United States by failing to report all of the gross receipts from their charter bus company, Quality Assurance Travel (QAT), on the 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 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 were not deposited into the business bank accounts or disclosed to the Moreno’s tax return preparer.

According to court documents, between 2005 and July 2013, Elena Moreno and her co-defendants also conspired to commit bank fraud and wire fraud by submitting false and fraudulent loan applications that overstated the applicants’ income and assets in order to acquire and refinance homes in San Jose.  In total, the defendants fraudulently obtained more than $3.3 million in loans through their conspiracy.  After the defendants fell behind with the loan payments, they attempted to avoid foreclosure by submitting false and fraudulent applications to modify these loans.  One of the four properties was ultimately sold through a short sale in 2013, while another was foreclosed upon in 2014.  The total losses to the financial institutions resulting from the foreclosure exceeded $200,000.

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

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

The Department of Justice collected $1.861 billion in criminal fines and penalties resulting from Antitrust Division prosecutions in the fiscal year that ended on Sept. 30, 2014.  Contributing in part to one of the largest yearly collections for the division, five of the companies paid in full penalties that exceeded $100 million, including a $425 million criminal fine levied against Bridgestone Corp., the fourth-largest fine the Antitrust Division has ever obtained.  The second-largest fine collected was a $195 million criminal fine levied against Hitachi Automotive Systems Ltd.  The three additional companies that paid fines and penalties exceeding $100 million were Mitsubishi Electric Corp. with $190 million, Toyo Tire & Rubber Co. Ltd. with $120 million and JTEKT Corp. with $103.2 million.  The collection total also includes penalties of more than $561 million received as a result of the division’s LIBOR investigation, which has been conducted in cooperation with the Justice Department’s Criminal Division.  In addition, in the last fiscal year the division obtained jail terms for 21 individual defendants, with an average sentence of 26 months, the third-highest average ever. 

“The size of these penalties is an unfortunate reminder of the powerful temptation to cheat the American consumer and profit from collusion,” said Assistant Attorney General Bill Baer for the Antitrust Division.  “We remain committed to ensuring that corporations and individuals who collude face serious consequences for their crimes.”

A civil complaint was filed today in federal court in Texas against Commercial Recovery Systems Inc. (CRS), of Plano, Texas, its president, Timothy Ford, and its former vice president, David Devany, to assess civil penalties for deceptive and abusive debt collection practices, and to prevent further consumer abuse, the Justice Department announced today.

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

“The defendants in this case are alleged to have lied to consumers in violation of the law,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division.  “We will enforce these laws and stop those who would use deception to extract money from American consumers.”

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

“When it comes to debt collection, people have rights,” said Director Jessica Rich of the

FTC’s Bureau of Consumer Protection.  “It’s illegal to harass people, or to make false threats about wage garnishment or lawsuits.  Unfortunately, these unscrupulous debt collectors systematically lied to the people they called.”

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

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

Thirteen commercial fishermen in North Carolina and Georgia have been charged in federal court in Raleigh, North Carolina, for their role in the illegal harvest and sale and false reporting of approximately 90,000 pounds of Atlantic striped bass from federal waters off the coast of North Carolina during 2009 and 2010, the Justice Department announced today.  The average retail value of the illegally harvested striped bass is approximately $1.1 million.

This investigation began as a result of the U.S. Coast Guard boarding of the fishing vessel Lady Samaira in February 2010, based on a complaint that multiple vessels were fishing Striped Bass illegally.  The individuals have been charged with violating the Lacey Act, which is a federal law that prohibits individuals from transporting, selling or buying fish and wildlife harvested illegally.  Additionally, 11 of these fishermen also have been charged with filing false reports in connection with the illegally harvested fish.  One of the fishermen is also charged with obstruction of a proceeding before a federal agency.  Specifically, the indictments allege that the commercial fishermen transported and sold Atlantic striped bass, knowing that they were unlawfully harvested from federal waters off the coast of North Carolina.  In an effort to hide their illegal fishing activities, these fishermen falsely reported harvesting these fish from state waters, where it would have been legal.

“The illegal poaching of striped bass by commercial fishermen can have a huge collective impact on the fish resource and has the potential to devastate the future livelihoods of law abiding commercial fishermen,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “The vast majority of fishermen do respect the law and carefully monitor their harvest to ensure they stay within the well-researched limits.  Those who deliberately break the law will be prosecuted.”

“The Atlantic Striped Bass fishery is extremely important to the economy of the State of North Carolina as well as our sister States along the Atlantic seaboard, and it represents a success in species recovery thanks to conservation, management, and law-abiding fishermen,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker.  “Illegal harvesting of this protected species and submitting false reports to federal agencies undermine those efforts and adversely impact our entire coastal communities.”

All of the defendants are licensed by the state of North Carolina and the National Oceanic and Atmospheric Administration (NOAA) to fish in state waters only for striped bass.  The individuals charged are:

• Gaston Saunders Jr. of Wanchese, North Carolina

• Bryan Daniels of Belhaven, North Carolina

• Ellis Leon Gibbs Jr. of Engelhard, North Carolina

• David Saunders of Poplar Branch, North Carolina

• Michael Potter of Bayboro, North Carolina

• Steven Daniels of Wanchese, North Carolina

• James R. Craddock of Manns Harbor, North Carolina

• James K. Lewis of Gloucester, North Carolina

• Joseph H. Williams of Brunswick, Georgia

• Dewey W. Lewis, Jr. of Newport, North Carolina

• Dwayne J. Hopkins of Belhaven, North Carolina

• Ronald W. Berry of Kill Devil Hills, North Carolina

• John F. Roberts of Engelhard, North Carolina

In early spring each year, wild coastal striped bass, Morone saxatilis, known regionally as “rockfish,” “striper” or “rock,” enter the estuary or river where they were born to spawn and then return to ocean waters to live, migrating along the coastline.  They may live up to 30 years and reach 50 pounds or more.  The population of coastal Atlantic striped bass depends heavily upon the capability of older, larger, female striped bass to successfully reproduce.   

Under federal law, Atlantic striped bass may not be harvested from or possessed in federal waters.  This ban on fishing for Atlantic striped bass in federal waters has been in place since 1990 due to drastic declines of the stock that occurred in the 1970’s.  North Carolina allows fishermen to harvest fish from state waters, but often limits fishermen to no more than 100 fish per fishing trip.  Commercial fishermen are required to report on a fishing vessel trip report the fish harvested from state waters; that report is then submitted to NOAA’s National Marine Fisheries Service (NMFS).  NOAA uses the information on this report to assess the fishery and its sustainability throughout the eastern seaboard.

According to the Atlantic Marine Fisheries Commission, “striped bass have formed the basis of one of the most important fisheries on the Atlantic coast for centuries.  Early records recount their abundance as being so great at one time they were used to fertilize fields.  However, overfishing and poor environmental conditions lead to the collapse of the fishery in the 1980s.”

The North Carolina Division of Marine Fisheries, along with other states, has reduced, twenty-five percent, the catch limits for the 2015 striped bass commercial fishing season in the Atlantic Ocean and Albemarle Sound/Roanoke River areas, citing a decline in stocks.  The division cited 2013 surveys revealing that the female spawning stock has been steadily declining.  The reduction applies to all commercial and recreational striped bass fishing for all the eastern coastal states.

A criminal indictment is not a finding of guilt.  An individual charged by criminal indictment is presumed innocent unless and until proven guilty in a court of law. 

The Lacey Act makes it unlawful for a person to transport or sell fish that were taken in violation of any law or regulation of the United States and carries a maximum penalty of five years in prison and a fine of up to $250,000, plus the potential forfeiture of the vessels and vehicles used in committing the offense.

The charges are a result of the investigation by NOAA’s Office of Law Enforcement, with assistance from the U.S. Coast Guard and its Investigative Service, the North Carolina Marine Patrol, and the Virginia Marine Police.  These cases are being prosecuted primarily by Trial Attorneys Shennie Patel, Shane Waller, Lauren Steele, and Joel LaBissonniere, from the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division, and Assistant U.S. Attorney Banumathi Rangarajan.

A current Puerto Rico Superior Court Judge was convicted yesterday by a federal jury in Puerto Rico of accepting bribes to acquit a businessman of vehicular homicide charges.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.

“Judicial corruption strikes at the very heart of our legal system,” said Assistant Attorney General Caldwell.  “Justice must be determined by the evidence and the law, not by bribe payments from those with the deepest pockets.  We are committed to maintaining the public’s trust by rooting out corruption wherever we find it – whether it be a politician in a backroom or a judge on the bench.”

“This conviction should serve to restore the public’s trust in the fairness of the judicial system,” said U.S. Attorney Rodríguez-Vélez.  “We hope that the jury’s verdict brings some closure to the family of Félix Babilonia.  I congratulate the prosecutors and the agents whose hard work and dedication brought about Acevedo-Hernández's conviction.”

“Justice is for all the people, not for a select few who use money and power to buy favorable verdicts,” said Special Agent in Charge Cases.  “The San Juan Division of the FBI is committed to continue investigating corruption at all levels in Puerto Rico and the United States Virgin Islands.”

Puerto Rico Superior Court Judge Manuel Acevedo-Hernandez, 62, was convicted late yesterday following a one-week trial of conspiracy to commit federal programs bribery and receipt of a bribe by an agent of an organization receiving federal funds.  Sentencing is scheduled for April 20, 2015, before Chief U.S. District Judge Aida Delgado-Colon of the District of Puerto Rico.

According to evidence at trial, Acevedo-Hernandez presided over a case involving Lutgardo Acevedo-Lopez, 39, a certified public accountant in Aguadilla, Puerto Rico.  On June 30, 2012, a car driven by Acevedo-Lopez collided with another car, resulting in the death of the other car’s driver.  Acevedo-Lopez was charged with criminal vehicular homicide in connection with the incident.  Acevedo-Hernandez, a supervisory superior court judge in the Aguadilla judicial region of Puerto Rico, acquitted Acevedo-Lopez of all charges.

The evidence demonstrated that Acevedo-Lopez used an intermediary to bribe Acevedo-Hernandez by paying taxes owed by Acevedo-Hernandez, paying for the construction of a garage for Acevedo-Hernandez, and providing Acevedo-Hernandez with a motorcycle, clothing and accessories, including cufflinks and a watch.  In exchange, Acevedo-Hernandez acquitted Acevedo-Lopez of all charges.

Acevedo-Lopez pleaded guilty to conspiracy to commit federal programs bribery and paying a bribe to an agent of an organization receiving federal funds on Aug. 14, 2014. 

The case was investigated by the FBI’s San Juan Division and is being prosecuted by Trial Attorney Peter Mason of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Timothy Henwood and Jose Capo of the District of Puerto Rico.

Citizens of Puerto Rico who have allegations of public corruption are encouraged to contact the FBI’s San Juan Division at (787) 754-6000.

Today, the Justice Department reached an agreement with Columbus, Georgia, that will address the remaining goals of a long-standing consent decree calling for reforms of its mental health system. 

Muscogee County has made significant improvements at the Muscogee County Jail in the areas of security, environmental health and safety as well as modest improvements in the provision of medical care following a 1999 federal consent agreement.  In order to address the continued deficiencies that remain, with respect to identifying, treating and housing prisoners with severe and persistent mental illness, jail leadership worked collaboratively with the Justice Department to create additional solutions that will improve mental health care without compromising security through a supplemental agreement.    

The existing consent decree will remain in place and the supplemental agreement adds crucial safeguards for prisoners with serious mental illness.  The supplemental agreement restricts the use of solitary confinement for prisoners with serious mental illness and limits the use of solitary confinement after 14 days.  The jail will provide secure mental health and step-down units, and programs to provide prisoners with serious mental illness a total of at least 24 hours structured and unstructured time out-of-cell each week.  These and other measures will vastly improve the quality of mental health care services in the Muscogee County Jail, while helping to minimize violence in the facility.

The supplemental agreement also includes robust training requirements.  All correctional staff must receive Crisis Intervention Team training, including training on understanding and recognizing psychiatric signs and symptoms to identify prisoners who have or may have serious mental illness, using de-escalation techniques to calm and reassure prisoners who have or may have serious mental illness before resorting to use of force, discipline, or solitary confinement, and making appropriate mental health referrals. 

“The Constitution requires that those detained in our nation’s jails and prisons are treated humanely and receive adequate mental health care,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “We are glad to have been able to work with Sheriff Darr, Jail Commander Collins, and Columbus, Georgia, in crafting sensible solutions to address a pressing issue confronting corrections administrators throughout this country:  the burgeoning numbers of men and women with mental illness in our correctional institutions. 

“These reforms will not only improve mental health care for this vulnerable population, but also enhance security within the facility, and facilitate inmates’ successful reintegration into the community upon release, which will help make our society safer,” said U.S. Attorney Michael Moore for the Middle District of Georgia.

The agreement requires a monitor to oversee implementation of the agreement and issue a compliance report every six months.  

The Civil Rights of Institutionalized Persons Act authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional rights of persons confined in a jail, prison, or other correctional facility.  Please visit the division website to learn more about this act and other laws enforced by the Civil Rights Division.

This agreement is due to the efforts of the Special Litigation Section of the Civil Rights Division, and the leadership of Columbus, Georgia, a consolidated government, acting by and through the Sheriff of Muscogee County, in his official capacity, and the Columbus City Manager, in his official capacity, as authorized by the Columbus Council. 

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Carter M. Stewart for the Southern District of Ohio and Acting Special Agent in Charge John A. Barrios of the FBI’s Cincinnati Field Division announced that a federal grand jury has charged Christopher Lee Cornell, 20, of Green Township, Ohio, with attempting to kill officers and employees of the United States, solicitation to commit a crime of violence and possession of a firearm in furtherance of a crime of violence in an indictment returned in Cincinnati.  Cornell was charged for his alleged plot to attack the U.S. Capitol and kill government officials.

The indictment alleges that from August 2014 through January 2015, Cornell plotted an attack on the U.S. Capitol that would have killed officers and employees of the United States during their official duties.  During that same time, the defendant allegedly attempted to persuade another to join him in his planned act of violence.  Cornell also allegedly possessed two semi-automatic rifles and approximately 600 rounds of ammunition.

Attempted murder of government employees and officials is a crime punishable by up to 20 years in prison.  Solicitation to commit an attempted murder is a crime punishable by 20 years in prison.  Possession of a firearm in furtherance of an attempted crime of violence is a crime punishable by a mandatory sentence of five years in prison.

Cornell was arrested on Jan. 14, 2015, by the FBI Joint Terrorism Task Force (JTTF).  The JTTF is made up of officers and agents from the Cincinnati Police Department, Colerain Police Department, Dayton Police Department, Ohio State Highway Patrol, United States Immigrations and Customs Enforcement, United States Secret Service, West Chester Police Department and Xenia Police Department.

Cornell is scheduled for an arraignment on the charges on Jan. 22, 2015, at 1:30 p.m., before Magistrate Judge Stephanie Bowman.

Assistant Attorney General Carlin and U.S. Attorney Stewart commended the investigation of this case by the JTTF.  The case is being prosecuted by Assistant U.S. Attorney Tim Mangan and Michael Dittoe of the Justice Department National Security Division Counterterrorism Section.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

Cornell Indictment

On January 15, 2015, U.S. Marshals Service (USMS) Top 15 Most Wanted fugitive Peter Castillo, wanted in Massachusetts for the killing of U.S. Army combat veteran Stephen Perez, was captured in the Dominican Republic. USMS Investigative Operations Division-International Investigations Branch (IOD-IIB) and Interpol Washington played a significant role in Castillo’s capture. Without the issuance of an Interpol Red Notice, and without inter-agency communication between Interpol Washington and Interpol Santo Domingo, Dominican authorities would not have taken Castillo into custody. Additionally, USMS/Interpol Washington coordinated the logistics surrounding Castillo’s overseas arrest, with the U.S. Department of Justice (DOJ)-Office of International Affairs (OIA).

http://www.usmarshals.gov/investigations/most_wanted/castillo/castillo-cap.htm

 

 

 

 

Defendants Allegedly Conspired to Carry Out Armed Attacks Against United States Military Personnel and Facilitated the Entry of an American Citizen into Al-Qaeda

A complaint and arrest warrant were unsealed today in federal court in the Eastern District of New York charging Saddiq Al-Abbadi, also known as “Sufiyan al-Yemeni” and “Sufwan,” and Ali Alvi, also known as “Issa al-Yemeni,” with conspiracy to murder United States nationals abroad and providing material support to al-Qaeda.  Alvi’s initial appearance was held before United States Magistrate Judge Steven I. Locke on Jan. 18, 2015, and Al-Abbadi’s initial appearance is scheduled today before United States Magistrate Judge Lois Bloom.  Al-Abbadi and Alvi were arrested in Saudi Arabia pursuant to the pending warrants in this case and lawfully expelled to the United States.

The charges were announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York; John P. Carlin, Assistant Attorney General for National Security; and Andrew G. McCabe, Assistant Director in Charge, Federal Bureau of Investigation, Washington Field Office.

As alleged in the complaint, Al-Abbadi and Alvi are both members of al-Qaeda who engaged in attacks against United States military forces stationed in Afghanistan.  Between 2003 and 2007, Al-Abbadi also fought against United States military forces in Iraq.  In approximately March 2008, Al-Abbadi and Alvi traveled to the Federally Administered Tribal Areas of Pakistan for the purpose of training with and fighting for al-Qaeda.  During that time period, both defendants helped an American citizen gain entry into al-Qaeda so that he could fight against U.S. troops in Afghanistan and U.S. citizens in the homeland. 

In approximately late spring and summer 2008, Al-Abbadi and Alvi traveled from Pakistan to Afghanistan to conduct attacks against United States military personnel stationed there.   Al-Abbadi led a battle against U.S. forces in Paktya Province in May 2008 during which one U.S. Army Ranger was killed and several others were seriously wounded.

“There is no escape from the reach of our law for violent terrorists, especially if they target our military,” stated United States Attorney Lynch.  “Al-Abbadi and Alvi may have operated in the mountains of Afghanistan, but now they face justice in a courtroom in Brooklyn.”  Ms. Lynch extended her grateful appreciation to the FBI.

“With the charges announced today, these defendants will face justice for conspiring to kill Americans overseas and providing material support to al-Qaeda,” said Assistant Attorney General Carlin.  “Seeking to identify, thwart, and hold accountable those who target U.S. citizens and interests around the world will remain a top priority of the National Security Division.  I want to thank the many agents, analysts, and prosecutors who are responsible for this matter.”

“The arrest and prosecution of these two individuals, who allegedly directly supported the mission of a designated terrorist organization, is a major step in the international cooperation to combat terrorism,” said FBI Assistant Director in Charge McCabe.  “On a daily basis, the FBI is faced with a complex threat environment that is always evolving and changing.  Through international partnerships, the FBI will continue to pursue those who provide support to terrorist groups and ensure that they are brought to justice.”­­    

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

The government’s case is being prosecuted by Assistant United States Attorneys Zainab Ahmad, Michael P. Canty and Douglas M. Pravda, with assistance provided by Trial attorney Josh Parecki of the Justice Department’s Counterterrorism Section and by the Office of International Affairs.

The Defendants:

SADDIQ AL-ABBADI

Age:  36

Nationality: Yemeni

ALI ALVI

Age:  30

Nationality: Yemeni

E.D.N.Y. Docket No. 09-MJ-372

A third member of an international computer hacking ring has pleaded guilty to conspiring to break into computer networks of prominent technology companies to steal more than $100 million in intellectual property and other proprietary data. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Charles M. Oberly III of the District of Delaware and Special Agent in Charge Stephen E. Vogt of the FBI’s Baltimore Field Office made the announcement.

Nathan Leroux, 20, of Bowie, Maryland, pleaded guilty to conspiracy to commit computer intrusions and criminal copyright infringement based on his role in the cyber theft of software and data related to the Xbox One gaming console and Xbox Live online gaming system, and popular games such as the “FIFA” online soccer series; “Call of Duty:  Modern Warfare 3;” and “Gears of War 3.”  Leroux has been in custody since attempting to flee into Canada from Buffalo, New York, on June 16, 2014.  A sentencing hearing is set before U.S. District Judge Judge Gregory M. Sleet of the District of Delaware on May 14, 2015.

Sanadodeh Nesheiwat, 28, of Washington, New Jersey, and David Pokora, 22, of Mississauga, Ontario, Canada, previously pleaded guilty to the same conspiracy charge on Sept. 30, 2014.  They remain in custody pending their sentencing hearings, which are scheduled for April 2015.  Pokora’s guilty plea is believed to have been the first conviction of a foreign-based individual for hacking into U.S. businesses to steal trade secret information.  Charges against a fourth defendant, Austin Alcala, 19, of McCordsville, Indiana, remain pending. 

According to Leroux’s admissions in connection with his guilty plea, he was part of the hacking conspiracy between January 2011 and September 2012.  During that period, hacking group members located in the United States and abroad gained unauthorized access to computer networks of various companies, including Microsoft Corporation, Epic Games Inc., Valve Corporation and Zombie Studios.  The conspirators accessed and stole unreleased software, software source code, trade secrets, copyrighted and pre-release works, and other confidential and proprietary information.  Members of the conspiracy also allegedly stole financial and other sensitive information relating to the companies – but not their customers – and certain employees of such companies. 

Specifically, the data theft targeted software development networks containing source code, technical specifications and related information for Microsoft’s then-unreleased Xbox One gaming console, as well as intellectual property and proprietary data related to Xbox Live and games developed for that online gaming system.

Leroux admitted in court that he and others used the stolen intellectual property to build, and attempt to sell, counterfeit versions of the Xbox One console before its public release in November 2013.  In July 2013, the FBI intercepted a counterfeit console built by Leroux, which was destined for the Republic of Seychelles. 

Leroux also admitted that he developed a software exploit that allowed him and others to generate millions of “coins” for the FIFA soccer games playable on the Xbox Live platform.  These coins are the virtual, in-game currency used to build a “FIFA Ultimate Team” in the games.  Without the authorization of Electronic Arts, the intellectual property rights holder to the FIFA games, Leroux and others sold bulk quantities of the “FIFA coins” via online black markets. 

The value of the intellectual property and other data stolen by the hacking ring, as well as the costs associated with the victims’ responses to the conduct, is estimated to range between $100 million and $200 million.  To date, the United States has seized over $620,000 in cash and other proceeds related to the charged conduct.

This case is being investigated by the FBI, with assistance from the Criminal Division’s Office of International Affairs, the U.S. Department of Homeland Security’s Homeland Security Investigations and Customs and Border Protection, the U.S. Postal Inspection Service, the Canada Border Services Agency, the Western Australia Police and the Peel Regional Police of Ontario, Canada.  The case is being prosecuted by Trial Attorney James Silver of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Edward J. McAndrew of the District of Delaware.          

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Preet Bharara for the Southern District of New York and Assistant Director-in-Charge George Venizelos of the FBI’s New York Office, announced today that a federal grand jury returned a two-count indictment against Cheng Le for attempting to acquire and distribute ricin and committing postal fraud.  Le was arrested on Dec. 23, 2014, by the FBI in Manhattan.  He was presented on a Complaint before the U.S. Magistrate Judge James C. Francis IV on Dec. 24, 2014, and has been detained since his arrest.  He is expected to be arraigned on Friday, January 23, 2015, before the United States District Judge Alison J. Nathan.

“As alleged, Cheng Le attempted to acquire ricin, a potentially lethal toxin, through the Dark Web so that it could be used for deadly purposes,” said U.S. Attorney Bharara.  “Thankfully, with the help of our law enforcement partners he was intercepted and must now answer for his alleged crimes.”

“In the shadows of the Dark Web, criminals hide behind a veil of anonymity, sniffing out hidden opportunities to buy and sell illegal and potentially dangerous merchandise,” said Assistant Director-in-Charge Venizelos.  “As alleged, in this case, activity carried out in the marketplace served as a conduit for Le to obtain ricin. In his desire to acquire this potentially deadly toxin, he picked his own poison and now faces the consequences of the justice system.”

According to the Complaint, which was unsealed today in Manhattan federal court, and the indictment:

Ricin is a highly potent and potentially fatal toxin with no known antidote.  In December 2014, an individual (the Ricin Buyer) contacted an FBI online covert employee (the OCE) on an online forum.  During Dec. 2014, the Ricin Buyer exchanged a series of messages with the OCE, during which the Ricin Buyer explored the possibility of the OCE supplying the Ricin Buyer with ricin, for the Ricin Buyer to resell to at least one secondary buyer. 

On or about Dec. 18, 2014, the Ricin Buyer directed the OCE to send a quantity of ricin to a particular postal box in Manhattan (the Postal Box).  The FBI later determined that the Postal Box belonged to Cheng Le.  Later that same day, FBI agents observed Le wear latex gloves while retrieving a package from the Postal Box (the Package) and mailing it at a nearby post office (the Post Office).  Law enforcement officers examined the Package, confirmed that it did not contain any hazardous materials, and determined that Le had listed a fake name as the Package’s return address.  A postal employee (the Postal Employee) informed the FBI that the Postal Employee had seen Le at the Post Office on multiple prior occasions and that Le has worn blue latex gloves on at least some of those occasions.

The FBI prepared a package (the Sham Shipment) that was consistent with the Ricin Buyer’s request to the OCE, which was then delivered to the Postal Box.  On Dec. 23, 2014, Le, wearing latex gloves, retrieved the Sham Shipment, opened it, and took the contents to his apartment, whereupon he was arrested by FBI agents.

*                      *                      *

The indictment charges Le, 21, in two counts.  Count One charges Le with attempting to possess a biological toxin for use as a weapon, and carries a maximum sentence of life in prison.  Count Two charges Le with using a fictitious name in furtherance of unlawful business involving the mail, and carries a maximum sentence of five years’ imprisonment.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Assistant Attorney General Carlin is grateful for the outstanding investigative efforts of the FBI, the New York City Police Department (NYPD) and the United States Postal Inspection Service (USPIS).  Le’s arrest is the result of the close cooperative efforts of the Justice Department’s National Security Division, U.S. Attorney’s Office for the Southern District of New York, the FBI’s Joint Terrorism Task Force—which consists of law enforcement officers of the FBI, NYPD, USPIS and other agencies.

The case is being prosecuted by the office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Ilan Graff and Andrew D. Beaty are in charge of the prosecution, with assistance provided by Trial Attorney Joseph Kaster of the Justice Department’s Counterterrorism Section.

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

Indictment

Complaint

A leader of the Las Vegas Playboy Bloods street gang was sentenced to 23 years in prison today for engaging in a racketeering conspiracy and possessing crack cocaine with the intent to distribute it, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.

Markette Tillman, 31, of Las Vegas, Nevada, pleaded guilty on July 29, 2014, two days into his jury trial, before U.S. District Judge Kent J. Dawson of the District of Nevada. 

According to Tillman’s plea agreement and evidence presented at trial, the Bloods is a nationally-known criminal street gang whose members engage in drug trafficking and acts of violence.  The Playboy Bloods is a local “set” or affiliate of the national Bloods gang with local control and operation within the Las Vegas metropolitan area.  The Playboy Bloods operate primarily in the Sherman Gardens Annex, a Las Vegas public housing complex commonly called the “Jets.”

Tillman admitted that on Jan. 20, 2004, he aided and abetted the murder of a security guard at the Jets.  The guard approached Tillman and several other Playboy Bloods and told them to leave the property.  An argument ensued and the guard rode away on his bicycle to get help.  One of the Playboy Bloods fired a gun at the guard, hitting him two times and killing him.

Tillman further admitted that he agreed with other members of the Playboy Bloods to manufacture and distribute narcotics, primarily crack cocaine, and to operate drug houses within the Playboy Bloods’ turf.  Tillman specifically admitted to distributing in excess of 280 grams of crack cocaine over the course of the racketeering conspiracy.

Tillman was the last of 10 gang members charged in the indictment filed in 2008 to be sentenced.  The nine other convicted gang members received the following sentences:

• Jacorey Taylor, aka “Mo-B,” 31, was sentenced to life in prison on Oct. 21, 2013, after being convicted by a jury of engaging in a racketeering conspiracy, committing violent crimes in aid of racketeering activity, using a firearm during a crime of violence, engaging in a drug-trafficking conspiracy and possessing crack cocaine with the intent to distribute it.

• Steven Booth, aka “Stevie-P,” 27, was sentenced to 20 years in prison on April 10, 2013, after pleading guilty to engaging in a racketeering conspiracy involving two murders.

• Reginald Dunlap, aka “Bowlie,” 30, was sentenced to 20 years in prison on April 9, 2013, after pleading guilty to engaging in a racketeering conspiracy involving one murder.

• Demichael Burks, aka “Mikey P,” 29, was sentenced to 6 ½ years in prison on Dec. 3, 2010, after pleading guilty to engaging in a racketeering conspiracy.

• Anthony Mabry, aka “Akim Slim,” 43, was sentenced to 14 years in prison on Oct. 20, 2010, after pleading guilty to engaging in a racketeering conspiracy.

• Delvin Ward, aka “D-Luv,” 37, was sentenced to 11 years in prison on Sept. 17, 2010, after pleading guilty to engaging in a racketeering conspiracy.

• Terrence Thomas, aka “Seven,” 40, was sentenced to 10 years in prison on June 16, 2010, after pleading guilty to engaging in a drug-trafficking conspiracy.

• Sebastian Wigg, aka “Rock,” 36, was sentenced to five years in prison on March 29, 2010, after pleading guilty to engaging in a drug-trafficking conspiracy.

• Fred Nix, aka “June P,” 36, was sentenced to five years in prison on March 29, 2010, after pleading guilty to engaging in a drug-trafficking conspiracy.

The case was investigated by the FBI’s Las Vegas Safe Streets Gang Task Force, which includes officers from the North Las Vegas Police Department and Las Vegas Metropolitan Police Department, and was prosecuted by Trial Attorney Kevin L. Rosenberg of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Nicholas D. Dickinson and Phillip N. Smith Jr. of the District of Nevada.

The Justice Department announced today that, jointly with the city of Albuquerque, it is notifying the District Court of the selection of Dr. James R. Ginger—a nationally recognized expert on police reform and organizational change—as the independent monitor of the settlement agreement entered into by the department and the city of Albuquerque to reform the Albuquerque Police Department (APD).  Ginger and his team will be responsible for independently assessing the full implementation of the settlement agreement; reporting on the status of compliance to the court, the parties and the community; assisting the parties in resolving compliance challenges that may emerge; and providing technical guidance as needed to the APD.

Ginger has successfully overseen similar court-enforceable agreements aimed at increasing community trust and implementing sustainable police reforms.  He has first-hand experience in ensuring critical reform across the country and a proven record of timely implementing reform.  He was appointed as independent monitor over the first consent decree ever obtained by the Justice Department in Pittsburgh, Pennsylvania, as part of its enforcement of civil rights laws aimed at ensuring constitutional and effective policing.  He worked closely with the parties and the Pittsburgh Bureau of Police to implement comprehensive reforms, designed to address excessive use of force, false arrests, improper searches and seizures, failures in the disciplinary system and inadequate first-line supervision.  He was also appointed as monitor over the consent decree involving the New Jersey State Police and its efforts to eradicate discriminatory policing practices.  Ginger has been a leader in developing monitoring technologies and methodologies used in evaluating compliance with federal consent decrees.  Ginger has also worked with law enforcement agencies in New York, Ohio, Texas, Florida, Georgia, Alabama, Indiana and others.  He is currently the Chief Executive Officer of Public Management Resources Inc. (PMR) and is responsible for strategic planning, marketing, budgeting and management. 

Before founding PMR, Ginger worked as an Associate Professor of Criminal Justice, Executive Director for the Center of Justice Policy, Deputy Director of the Police Foundation and Director of the Southern Police Institute.  Ginger was credited with planning, developing and implementing a nationwide technical assistance and training project for the United States Bureau of Justice Assistance and developing nation-wide programs as part of the Southern Police Institute.

The monitoring team led by Ginger includes experts who have proven experience in assessing reform similar to those contained in the settlement agreement with Albuquerque.  The members of the monitoring team will include, among others, G. Patrick Gallagher, President of the Gallagher-Westfall Group; Dan Giaquinto, legal specialist and partner at Kern, Augustine, Conroy, & Schoppman, P.C.; Phil Coyne, Principal of Coyne Enterprise Solutions LLC; Mary Kealoha, Vice-President of the Gallagher-Westfall Group; Albert Preik, former Training Director for the Pittsburgh Bureau of Police; Peter Sarna, nationally recognized expert in police training and use of force; and Dave Torres, former Commandant of the New Jersey State Police training academy.

“We thank all of the individuals and firms that submitted letters of interest to serve as monitor and for their many accomplishments,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “The decision to select the most qualified candidate from among the field was not an easy one, and we thank the community and other stakeholders for their input on this critical step of the implementation process.”

“Dr. Ginger’s proven success with police departments and criminal justice systems in the United States will assist in promoting compliance with critical structural and systemic reforms that are necessary to restoring public confidence and achieving effective and constitutional policing in Albuquerque,” said U.S. Attorney Damon Martinez for the District of New Mexico.  “We are pleased to have worked collaboratively with the City to select Dr. Ginger, who we believe is uniquely positioned to assess and report on the Albuquerque Police Department’s reform efforts.”

Ginger’s application materials can be found here.

A copy of the complaint, the final agreement can be found at www.justice.gov/crt/about/spl.

A former mayor of Dunkirk, New York, was indicted today for engaging in a scheme to defraud his mayoral campaign and supporters by stealing campaign contributions for his personal benefit, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney William J. Hochul Jr. of the Western District of New York.

Richard L. Frey, 83, of Dunkirk, New York, was charged today in a 13-count indictment with 12 counts of wire fraud and one count of making a false statement to the FBI. 

According to the indictment, from January 2003 through June 2012, Frey allegedly solicited and received several campaign contributions from area businesses and businesspeople and then, instead of depositing the donations into his campaign accounts, either cashed the checks for his personal use or deposited the checks into his personal bank accounts.  The indictment further alleges that Frey concealed the existence of these campaign contributions by not reporting or disclosing them on his campaign disclosure reports, as was required of local candidates for public office.  When asked about the scheme, Frey allegedly provided false information to the FBI.

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

The case is being investigated by the FBI’s Buffalo Field Office and the U.S. Housing and Urban Development Office of Inspector General.  The case is being prosecuted by Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John E. Rogowski of the Western District of New York.

Remarks As Prepared for Delivery

Thank you, Rob, for that kind introduction.  I am honored to be invited to speak on this panel with esteemed colleagues from the SEC, FCA, SFO, and the private sector.

As brief background, I am a Deputy Assistant Attorney General in the Department of Justice’s Criminal Division.  I oversee several sections, but most relevant to my remarks today is the Fraud Section, which has principal responsibility for the prosecution of complex securities and other white-collar matters for the Criminal Division.

I would like to speak briefly this morning about the Criminal Division’s white-collar criminal enforcement priorities now and in the coming year. 

We are focused on fighting corruption, cyber crime, and financial fraud, all of which present unique dangers to American citizens, as well as individuals overseas. 

We are prioritizing the fight against financial fraud of all stripes—particularly at publicly traded corporations and large financial institutions—and we will follow the evidence of fraud wherever it leads, be that within or outside U.S. borders.    

The prosecution of individuals—including corporate executives—for criminal wrongdoing continues to be a high priority for the department.  That is not to say that we will be looking to charge individuals to the exclusion of corporations. 

However, corporations do not act criminally, but for the actions of individuals.  And, the Criminal Division intends to prosecute those individuals, whether they are sitting on a sales desk or in a corporate suite. 

It is within this framework that we are also seeking to reshape the conversation about corporate cooperation to some extent. 

Corporations too often overlook a key consideration that the department has long expressed in our Principles of Federal Prosecution, which guide our prosecutorial decisions:  That is a corporation’s willingness to cooperate in the investigation of its culpable executives.

Of course, corporations—like individuals—are not required to cooperate.  A corporation may make a business or strategic decision not to cooperate.  However, if a corporation does elect to cooperate with the department, it should be mindful of the fact that the department does not view voluntary disclosure as true cooperation, if the company avoids identifying the individuals who are criminally responsible for the corporate misconduct. 

Even the identification of culpable individuals is not true cooperation, if the company intentionally fails to locate and provide facts and evidence at their disposal that implicate those individuals.  The Criminal Division will be looking long and hard at corporations who purport to cooperate, but fail to provide timely and full information about the criminal misconduct of their executives. 

In the past year, the Criminal Division has demonstrated its continued commitment to the prosecution of individual wrongdoers in the corporate context.  I will highlight a few examples.   

On the FCPA front, since 2009, we have convicted 50 individuals in FCPA and FCPA-related cases, and resolved criminal cases against 59 companies with penalties and forfeiture of almost $4 billion.  Within the last two years alone, we have charged, resolved by plea, or unsealed cases against 26 individuals, and 14 corporations have resolved FCPA violations with combined penalties and forfeiture of more than $1.6 billion. 

As just one example, the department unsealed charges against the former co-CEOs and general counsel of PetroTiger Ltd., a BVI oil and gas company with offices in New Jersey, for allegedly paying bribes to an official in Colombia in exchange for assistance in securing approval for an oil services contract worth $39 million. 

The general counsel and one of the CEOs already pleaded guilty to bribery and fraud charges, and the other former CEO is headed for trial. 

This case was brought to the attention of the department through voluntary disclosure by PetroTiger, which cooperated with the department’s investigation.  Notably, no charges of any kind were filed against PetroTiger.

An example on the flip side is the Alstom case, an FCPA investigation stemming from a widespread scheme involving tens of millions of dollars in bribes spanning the globe, including Indonesia, Saudi Arabia, Egypt, and the Bahamas. 

When the Criminal Division learned of the misconduct and launched an investigation, Alstom opted not to cooperate at the outset.  What ensued was an extensive multi-tool investigation involving recordings, interviews, subpoenas, MLAT requests, the use of cooperating witnesses, and more. 

As of today, four individual Alstom executives have been charged; three of them have pleaded guilty; Alstom’s consortium partner, Marubeni, was charged and pleaded guilty; and Alstom pleaded guilty and agreed to pay a record $772 million fine.  And that only accounts for the charges in the United States. 

As I have said, we want corporations to cooperate, and will provide appropriate incentives.  But, we will not rely exclusively upon corporate cooperation to make our cases against the individual wrongdoers. 

On the securities and commodities fraud front, protecting the integrity of our global financial markets continues to be a priority for the Criminal Division.  Our investigations into the manipulation of the LIBOR and FX at global financial institutions have received substantial publicity. 

So far, five banks have resolved the LIBOR investigation with the department, paying more than $1.2 billion to the department alone.  And 11 individuals have been charged, two of whom have pleaded guilty.  And again, that only accounts for the charges in the United States.  We expect both the LIBOR and FX investigations to continue to develop, both against the financial institutions themselves, as well as culpable individual executives.

To do these complex, international investigations, we are increasingly coordinating with domestic and foreign regulators and law enforcement counterparts, some of whom are on this panel today. 

In working with our foreign counterparts, we have developed growing sophistication and experience in a variety of areas, including analyzing foreign data privacy laws and corporations’ claims that overseas documents cannot be provided to investigators in the United States.

We are also building and relying upon on our relationships with our foreign counterparts to gather evidence, locate individuals overseas, conduct parallel investigations of similar conduct, and, when appropriate, coordinate the timing and scope of resolutions. 

Yes, just as we are coordinating our investigations, we are likewise willing to coordinate our resolutions, including accounting for the corporate monetary penalties paid in other jurisdictions when appropriate.

This is all to say that you should expect to see these meaningful, multinational investigations and prosecutions of corporations and individuals to continue.

With that, I am looking forward to hearing the remarks of my fellow panelists and discussing these important issues with you in more detail.

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon for the Northern District of Illinois, Special Agent-in-Charge Robert J. Holley of the FBI’s Chicago Office and Special Agent-in-Charge James C. Lee of the Internal Revenue Service Criminal Investigation Division in Chicago announced today that a Chicago man was sentenced today to 15 months in federal prison for his role in a conspiracy to violate U.S. sanctions by agreeing to assist Zimbabwe President Robert Mugabe and others in an effort to lift economic sanctions against Zimbabwe.  Between late 2008 and early 2010, C. Gregory Turner, met multiple times in Africa with Zimbabwean government officials, including President Mugabe and Gideon Gono, governor of the Reserve Bank of Zimbabwe, who were individually subject to U.S. sanctions.

A November 2008 “consulting agreement” provided for total payment of $3.4 million in fees for Turner and his co-defendant, Prince Asiel Ben Israel, to engage in public relations, political consulting and lobbying efforts to have sanctions removed by meeting with and attempting to persuade federal and state government officials, including Illinois members of Congress and state legislators, to oppose the sanctions.

Turner, 72, also known as “Greg Turner,” of Chicago, acted out of greed, U.S. District Judge Elaine Bucklo said in imposing the sentence in Federal Court in Chicago.  The judge also said she did not believe Turner’s claim that his conduct was in the name of humanitarianism and helping the people of Zimbabwe.  Turner was ordered to begin serving his sentence on March 13, and he was placed on court supervision for a year after he is released from custody.

Turner was found guilty last October of violating the International Emergency Economic Powers Act (IEEPA), following a jury trial in U.S. District Court.  Turner was acquitted of one count each of conspiracy and acting as an agent in the United States of a foreign government without providing prior notification to the Attorney General.

“[Turner’s] motivation was his own financial enrichment.  He sought to parlay his close relationships with well-connected government officials to score a big payday,” the government argued in a sentencing memo.

Ben Israel, 73, of Chicago, was sentenced last August to seven months in prison after pleading guilty to violating the Foreign Agents Registration Act (FARA).

The sanctions against President Mugabe and other specially designated individuals in Zimbabwe ― for human rights abuses ― were initially imposed in 2003 by President George W. Bush and have been continued annually by President Obama, starting in March 2009.  President Mugabe and his ruling ZANU-PF party have governed Zimbabwe since its independence in 1980.  The sanctions neither bar travel to Zimbabwe nor prohibit public officials from meeting with specially designated nationals to discuss removing the sanctions, but individuals may not provide services on behalf of or for the benefit of specially designated nationals.

According to the evidence at trial, in early November 2008, Turner and Ben Israel began having discussions with Mugabe, Gono and other ZANU-PF leaders regarding the influence Turner and Ben Israel could wield to have the sanctions removed.  The defendants discussed with Mugabe, Gono and others their association with many public officials who purportedly had close connections with then President-Elect Obama.  Turner violated IEEPA by conspiring to engage in public relations, political consulting and lobbying efforts on behalf of President Mugabe and other Zimbabwe officials.  In early December 2008, Ben Israel’s U.S. bank blocked a wire transfer of $89,970 into his account from a Zimbabwe official affiliated with ZANU-PF, and Ben Israel later traveled to Africa and personally withdrew $90,000 from the bank account of that same Zimbabwe official.

Turner and Ben Israel arranged for trips by federal and state government officials to meet with President Mugabe and other Zimbabwean officials, including in November and December 2008, and January and December 2009; attempted to have Gono and other Zimbabwean officials speak at an issues forum in Washington, D.C., sponsored by a then U.S. Representative from California, and to assist those officials in obtaining visas to travel to the U.S. to attend the event; arranged for President Mugabe to meet with federal and state government officials in New York; lobbied a caucus of state legislators on behalf of Zimbabwean officials; and failed to apply to the Treasury Department for a license to engage in transactions and services on behalf of specially designated nationals.

In early December 2008, Turner and Ben Israel arranged for a delegation to travel to Zimbabwe.  After members of the delegation returned, President-Elect Obama’s transition team forwarded information about contact from a member of the delegation to the FBI based on its concerns that sanctions may have been violated.

The Justice Department’s Counterespionage Section assisted in the investigation.

The government was represented by Trial Attorney David Recker with the Justice Department’s Counterespionage Section and Assistant U.S. Attorneys Barry Jonas and Georgia Alexakis.