District Not Recorded

A Flossmoor, Illinois, man was sentenced to serve 46 months in prison and three years of supervised release by U.S. District Court Judge Michael M. Mihm in the Central District of Illinois for obstruction of justice and filing false retaliatory liens against government officials, the Justice Department’s Tax Division announced today.

Tyree Davis Sr. pleaded guilty on July 18, 2014, to two counts of obstruction of justice and two counts of filing false retaliatory liens.  A federal grand jury in Chicago returned an eight count indictment on July 24, 2013, charging Davis with two counts of obstruction of justice and six counts of filing false retaliatory multi-billion dollar liens against government employees. 

According to court documents, Davis sent correspondence threatening to arrest two federal judges, including the judge who presided over the 2010 criminal tax trial of LaShawn Littrice.  A jury convicted Littrice, who Davis has referred to as his wife, in June 2010, and she was sentenced to serve 42 months in prison.  Court documents also establish that Davis filed false retaliatory liens, titled Notice of Claim of Maritime Lien, against the two federal judges.  Davis also filed false retaliatory liens against the U.S. Attorney and Clerk of Court for the Northern District of Illinois, and the Assistant U.S. Attorney and the special agent from the Internal Revenue Service-Criminal Investigation who investigated and prosecuted Littrice.  Davis filed the liens with the Cook County Recorder’s Office claiming that each individual owed Littrice $100 billion dollars.  Davis re-recorded the liens multiple times in order to add real property descriptions, then notified others, including credit bureaus, that he had filed the multi-billion dollar liens.  

The case was prosecuted by the Senior Litigation Counsel Jen E. Ihlo and Trial Attorney Matthew J. Kluge of the Tax Division and was investigated by the U.S. Treasury Inspector General for Tax Administration and the FBI.

A Houston investment manager was sentenced yesterday to serve 56 months in prison for orchestrating a $72 million investment fraud scheme resulting in approximately $40 million in losses to investors.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Carlie Christensen of the District of Utah, Special Agent in Charge Mary Rook of the FBI’s Salt Lake City Field Office and Special Agent in Charge John Collins of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Las Vegas Field Office made the announcement.

Robert Andres, 63, of Houston, Texas, pleaded guilty on Aug. 22, 2013, to wire fraud.  In addition to the prison sentence, U.S. District Judge Robert J. Shelby of the District of Utah ordered Andres to pay more than $3.2 million in restitution.

According to admissions made in connection with his guilty plea, between October 2005 and 2011, Andres recruited investors for Winsome Investment Trust, where he served as the sole manager, attorney and trustee, by misrepresenting Winsome’s assets, asset allocation and the manner in which investor funds were invested.  Indeed, between October 2005 and April 2007, Andres raised more than $39 million by disseminating false and misleading balance sheets and representing that he would invest all of the investors’ funds in a trading program or mostly automated trading business.

Also according to Andres’ admissions, he intentionally failed to disclose to potential  investors that their money would actually be used to pay earlier investors.  In addition, Andres used new investor funds to make purported “profit” payments to earlier investors to create the false impression that Winsome was profitable.  During this period, Andres also misappropriated approximately $2.2 million in investor money for personal use, including to pay his hotel bills and living expenses.

This case was investigated by the FBI’s Salt Lake City Field Office and IRS-CI’s Las Vegas Field Office.  The Commodity Futures Trading Commission and the Securities and Exchange Commission also provided assistance in the investigation.  The case is being prosecuted by Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jason R. Burt and Mark Y. Hirata of the District of Utah.

The Justice Department announced that a federal grand jury in Shreveport, Louisiana, returned an indictment against former Homer Police Department Officer Willie Fred Knowles, 64, charging him with violating the civil rights of multiple individuals during three different incidents, as well as with making false statements to the FBI.   

Knowles was charged with one count of willfully depriving a person of her civil rights when he pushed her down and struck her about her face and body, without justification.  Knowles is also charged with making false statements to the FBI about this incident.  In addition, Knowles is charged with depriving the rights of two other individuals during two separate incidents in which he tased them without justification.   

If convicted, Knowles faces a maximum punishment of 10 years imprisonment on the civil rights charges; and five years in prison for making false statements to the FBI.   

This case was investigated by the FBI.  The case was referred to the FBI by the Louisiana State Police.  The case is being prosecuted by Trial Attorney Christine M. Siscaretti from the Justice Department’s Civil Rights Division and Assistant United States Attorney Mary J. Mudrick of the Western District of Louisiana.

An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendant is presumed innocent unless and until proven guilty.  

A former special agent with the Department of Health and Human Services-Office of Inspector General (HHS-OIG) pleaded guilty today to theft of government property for stealing thousands of rounds of law enforcement ammunition, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Elton Malone of HHS-OIG’s Special Investigations Branch.

Josef A. Riekers, 44, of Rockwall, Texas, pleaded guilty before Chief U.S. District Judge Jorge A. Solis of the Northern District of Texas, who set a sentencing hearing for April 8, 2015. 

According to admissions in his plea agreement, Riekers, who had served as a federal law enforcement agent for over 15 years, stole ammunition from the armory at HHS-OIG’s Dallas regional office.  Riekers then traded the stolen ammunition on Internet forums for other, non-government-issued ammunition that he used for his own personal benefit.

This case was investigated by HHS-OIG’s Special Investigations Branch, with assistance from the Dallas Police Department’s Criminal Intelligence Unit.  The case is being prosecuted by Trial Attorneys Kevin Driscoll and Justin Weitz of the Public Integrity Section.

Attorney General Eric Holder, Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division and U.S. Attorney Preet Bharara for the Southern District of New York announced today that the United States has taken legal action to ensure that critically important reforms are put in place to address conduct at Rikers Island that has violated the constitutional rights of New York City’s youngest inmates, who are between the ages of 16 and 18 (“young inmates”).  Specifically, the Department of Justice has filed a motion seeking the court’s permission to join and become a plaintiff in a pending class action lawsuit against New York City, Nunez v. City of New York (the “Nunez Action”), which alleges that the Department of Correction (“DOC”) has engaged in a pattern and practice of using unnecessary and excessive force against inmates.  The department has taken this legal step as part of its ongoing effort to ensure that DOC implements all needed institutional reforms promptly, and that these reforms are lasting, verifiable and enforceable through the judicial process.

"With this filing, the Department of Justice is taking an important step to ensure the safety and constitutional rights of young people incarcerated at Rikers Island," said Attorney General Holder.  "We've seen alarming evidence of unnecessary and excessive use of force against juveniles, as well as a systemic failure to protect them from violence and deeply troubling -- and potentially scarring -- use of solitary confinement.  This action allows the Justice Department to seek necessary reforms to remedy these unlawful conditions, to ensure fair treatment, and to provide all incarcerated young people with the protections, and opportunities to build better futures, that they deserve."

“Today we are taking legal action to ensure that critically important reforms are put in place to address the culture of violence and overuse of punitive segregation at Rikers Island that has violated the constitutional rights of New York City’s youngest inmates,” said Acting Assistant Attorney General Gupta.  “We stand ready to work with the city to remedy these deeply disturbing conditions for the safety of confined youth, remedies that will ultimately also promote public safety and the safety of correctional officers.”

“Sometimes it’s the case that bureaucracy can get in the way of reform-minded thinking and comprehensive cultural change,” said U.S. Attorney Bharara.  “We hope that won’t be the case here.  We welcome the aspirations articulated by Commissioner Ponte but we hope those aspirations will find concrete expression in the form of permanent, enforceable, and verifiable terms in a court-approved settlement agreement.  The devil, as they say, is in the details and we have come to the conclusion that joining the pending case as a formal party is the best and most efficient way to get those details done.  That is why we are now taking the steps necessary to carry out our responsibility under the law.  Given the longstanding sad state of affairs at Rikers Island, our impatience is more than understandable.  As I’ve said before, one way or another, we will get enduring and enforceable reform at Rikers Island.” 

On August 4, 2014, the department issued a report that concluded that “a deep-seated culture of violence is pervasive throughout the adolescent facilities at Rikers, and DOC staff routinely use force not as a last resort, but instead as a means to control the adolescent population and punish disorderly or disrespectful behavior.”  The report urged the city to adopt and implement over 70 specific remedial measures.  Although DOC’s new leadership has taken some positive steps in response to the report with respect to the 16 and 17-year old population, including reducing the inmate-to-staff ratio, developing new programming, and moving towards eliminating the use of punitive segregation, much more needs to be done. 

The department’s proposed 36-page complaint-in-intervention (“complaint”), filed today along with a motion to intervene in the Nunez action, alleges that the city has engaged in a pattern and practice of violating the constitutional rights of young inmates, and that the city’s deliberate indifference to these constitutional rights has caused these inmates serious physical, psychological, and emotional harm.  Like the August 4, 2014, report, the complaint focuses on use of force by staff, inmate-on-inmate violence, and the use of punitive segregation. 

Specifically, the complaint alleges:

• Staff use force against young inmates with alarming frequency.In Fiscal Year 2014, there were 553 reported staff use of force incidents involving young inmates at the Robert D.Davoren Center (“RNDC”) and the Eric M.Taylor Center (“EMTC”), the two facilities that housed most young inmates.These incidents resulted in 1,088 injuries.

• Inmate-on-inmate fights and assaults are pervasive in large part because inmates are inadequately supervised by inexperienced and poorly trained officers.In Fiscal Year 2014, there were 657 reported inmate-on-inmate fights involving young inmates at RNDC and EMTC.

• Staff use of force and inmate-on-inmate fights and assaults have resulted in an alarming number of serious injuries to young inmates, including broken jaws, broken orbital bones, broken noses, long bone fractures, and lacerations requiring stitches.

• Staff frequently punch, strike, or kick young inmates in the head or facial area.

• Force is used as a means to punish young inmates, and staff unnecessarily continue to use force against inmates who already have been restrained.

• Force is used in response to inmate verbal taunts and insults.

• Specialized response teams, including probe and cell extraction teams, use excessive force.

• Staff regularly tell inmates to “stop resisting,” even though the inmate has been completely subdued, to justify the use of force.

• Use of excessive force is common in areas outside video surveillance coverage.DOC recently transferred many 18-year old inmates to housing units that have no video surveillance at all.

The complaint further alleges that, notwithstanding a long and troubled history of pervasive use of force against inmates at Rikers, the city has for years failed to address systemic deficiencies, including:

• Failure to ensure that use of force is accurately reported, and allowing a powerful code of silence to persist.

• Failure to conduct thorough and comprehensive investigations into use of force incidents.

• Failure to appropriately discipline staff for using excessive and unnecessary force.

• Failure to ensure that inmates are adequately supervised.

• Failure to implement an adequate age-appropriate classification system.

• Failure to provide staff with effective training on the proper use of force and how to appropriately manage youth.

In addition, the complaint asserts that the city has engaged in a pattern and practice of placing young inmates in punitive segregation at an alarming rate and for excessive periods of time. 

Since issuing its report in August, the U.S. Attorney’s Office has had several meetings with the city’s Law Department regarding the U.S. Attorney’s Office proposed remedial measures.  Some of these discussions have included attorneys representing the Nunez plaintiffs, who have been engaging in settlement discussions with the city for several months.  However, thus far, although there has been some constructive dialogue, the city has been unwilling to commit to an enforceable agreement including the type of reforms and oversight that are necessary to fully address the long-standing problems at Rikers and safeguard the constitutional rights of inmates.

U.S.  Attorney Bharara thanked the Board of Correction for its continuing assistance in connection with this matter. 

This case is being handled by the Office’s Civil Rights Unit.  Assistant U.S. Attorneys Jeffrey K. Powell and Emily E. Daughtry are in charge of the case.

A California investment manager was sentenced yesterday to serve 225 months in prison for orchestrating a $33 million Ponzi scheme resulting in $15.2 million in losses to investors.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Carlie Christensen of the District of Utah, Special Agent in Charge Mary Rook of the FBI’s Salt Lake City Field Office and Special Agent in Charge John Collins of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Las Vegas Field Office made the announcement.

Robert L. Holloway, 57, of San Diego, California, was found guilty on Aug. 5, 2014, after a seven-day jury trial, of four counts of wire fraud and one count of making a false income tax return.  In addition to the prison sentence, U.S. District Judge Robert J. Shelby of the District of Utah ordered Holloway to pay $15.2 million in restitution.

Evidence presented at trial established that Holloway served as the chief executive officer and managing partner of US Ventures LC between May 2005 and April 2007.  From October 2005 until at least April 2007, Holloway recruited investors by making false representations, including that US Ventures used proprietary trading software that was consistently profitable, that US Ventures generated returns of 0.8 percent per trading day and that US Ventures would retain a 30 percent share of investors’ profits as a management fee.

The evidence also showed that Holloway generated and distributed reports to investors showing false daily returns on their investments.  Indeed, between October 2005 and April 2007, contrary to the returns shown on the false reports, US Ventures lost more than $10 million in trading, and the “profit” figures on the investor reports were entirely fabricated.  US Ventures raised more than $33 million from investors for its purported trading activities.  

Evidence at trial further demonstrated that Holloway and US Ventures made “profit distributions” to investors from funds solicited from new investors, and that Holloway misappropriated investors’ funds for a variety of personal expenses, including supporting his then-wife’s eBay business, and purchasing hundreds of thousands of dollars of jewelry.  During 2006 alone, Holloway diverted more than $1.2 million in investor funds to a “business” account that he used as a personal account.  During that same year, Holloway falsely claimed a gross income of only $27,500 on his personal tax return.

The case was investigated by the FBI’s Salt Lake City Field Office and the IRS-CI’s Las Vegas Field Office.  The Commodity Futures Trading Commission and the Securities and Exchange Commission also provided assistance in the investigation.  This case was prosecuted by Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jason R. Burt of the District of Utah.

New Memo Applies to All Department of Justice Components and U.S. Attorneys

Attorney General Holder announced today that the Department of Justice will take the position in litigation that the protection of Title VII of the Civil Rights Act of 1964 extends to claims of discrimination based on an individual’s gender identity, including transgender status.  Attorney General Holder informed all Department of Justice component heads and United States Attorneys in a memo that the department will no longer assert that Title VII’s prohibition against discrimination based on sex excludes discrimination based on gender identity per se, including transgender discrimination, reversing a previous Department of Justice position.  Title VII makes it unlawful for employers to discriminate in the employment of an individual “because of such individual’s…sex,” among other protected characteristics. 

“This important shift will ensure that the protections of the Civil Rights Act of 1964 are extended to those who suffer discrimination based on gender identity, including transgender status,” said Attorney General Holder.  “This will help to foster fair and consistent treatment for all claimants.  And it reaffirms the Justice Department’s commitment to protecting the civil rights of all Americans.”

The Attorney General’s memo is designed to foster consistent treatment of claimants throughout the government and reduce confusion.  In addition to applying to the department’s civil obligations in defending federal interests, this memo clarifies the Civil Rights Division’s ability to file Title VII claims against state and local public employers on behalf of transgender individuals.  The Department of Justice does not have authority to file suit against private employers.

An Alabama woman was sentenced today to serve 70 months in prison for her involvement in a stolen identity tax refund fraud (SIRF) scheme, Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced.

Sasha Webb was also ordered to serve three years of supervised release following her prison sentence and to pay $528,823 in restitution.

According to court documents and court proceedings in this and related cases, Webb worked as a medical records clerk at an Alabama Department of Corrections facility in Elmore County, Alabama, where she had access to the means of identification of inmates from databases maintained by the Alabama Department of Corrections.  On several occasions in 2009 and 2010, Webb stole identities from those databases and sold them to Harvey James and his sister, Jacqueline Slaton, for the purpose of filing false tax returns. 

Between 2010 and 2012, James and Slaton used those stolen identities to file false federal and state tax returns.  James and Slaton directed some of the false refunds to be sent to either prepaid debit cards or issued via check.  James’s brother-in-law, Gregory Slaton, recruited Vernon Harrison, a U.S. Postal Service employee, to the scheme.  James directed prepaid debit cards and state tax refund checks to be mailed to addresses that Harrison provided from his postal route.  Harrison collected the debit cards and checks and provided them to Gregory Slaton who in turn gave them to James and Jacqueline Slaton.  In total, James and Slaton filed more than 1,000 federal and state income tax returns that claimed more than $1 million in fraudulent tax refunds.

On Oct. 31, 2013, Harrison was sentenced to serve 111 months in prison. James was sentenced on April 29, 2014, to serve 110 months in prison and Jacqueline Slaton was sentenced on Oct. 23, 2012, to serve 70 months in prison.  Gregory Slaton was sentenced on Oct. 28, 2014, to serve 70 months in prison.

The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Postal Service’s Office of the Inspector General.  Trial Attorneys Jason H. Poole and Michael C. Boteler of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown for the Middle District of Alabama.

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

A Pike Road, Alabama, man was sentenced to serve 51 months in prison today for committing stolen identity refund fraud (SIRF) crimes, announced Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.

Charlie Jackson pleaded guilty to wire fraud and aggravated identity theft on May 5, and was also ordered to serve three years of supervised release following his prison term and to pay $98,177 in restitution.  According to court documents, from October 2010 up until April 2013, Jackson was involved in SIRF crimes—the use of stolen identities to steal money from the Internal Revenue Service (IRS)—by filing fraudulent tax returns claiming refunds in the victims’ names.  He admitted to obtaining stolen identities from various sources, including from nursing homes.  Altogether, the false tax returns filed by Jackson fraudulently claimed more than $170,000 in refunds.  Many of the returns were detected as fraudulent by the IRS and were not issued, however, Jackson was successful in defrauding the IRS of more than $90,000 in illegitimate refunds.

This case was investigated by special agents of the IRS-Criminal Investigation.  Trial Attorneys Michael C. Boteler and Charles M. Edgar Jr. of the Tax Division prosecuted the case with the assistance of Assistant U.S. Attorney Todd Brown and the U.S. Attorney’s Office for the Middle District of Alabama.

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

An Alabama man was indicted for stolen identity refund fraud, Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced today following the unsealing of the indictment. 

Jerome Marcel Newton was indicted on one count of mail fraud and one count of aggravated identity theft.

According to the indictment, Newton obtained personal identifying information through various means, including by using other individuals to collect identities and by recruiting people to provide their identities.  Newton is alleged to have used the identities he obtained to file fraudulent tax returns, directing the refunds claimed on the returns into bank accounts or onto prepaid debit cards.

An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Newton faces a statutory maximum sentence of 20 years in prison for the mail fraud count and a statutory mandatory sentence of two-years in prison for the aggravated identity theft count.  The actual sentence imposed on Newton if convicted, however, will be decided by a federal judge after consulting the sentencing guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.  Newton is also subject to fines and mandatory restitution if convicted.

This case was investigated by special agents of the Internal Revenue Service - Criminal Investigation, with assistance from the Sheriff’s Office for Douglas County, Georgia.  Trial Attorneys Jason Poole and Michael Boteler of the department’s Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown and the U.S. Attorney’s Office for the Middle District of Alabama. 

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

William J. Lednum, 41, of Tilghman Island, Maryland, was sentenced today in federal court in Baltimore to a year and day in prison, respectively followed by six months of home detention as part of three years of supervised release, for conspiring to violate the Lacey Act and to defraud the United States through their illegal harvesting and sale of 185,925 pounds of striped bass. Lednum was also ordered to pay $498,293.40 in restitution to the State of Maryland for the damage caused to the Striped Bass fishery.  In addition, Judge Bennett ordered Lednum to pay a fine of $40,000. 

According to their plea agreements, Lednum and his co-defendant, Michael D. Hayden, were “captains” on fishing vessels owned by them, William J. Lednum Fisheries, d/b/a, Michael D. Hayden, Jr., and Michael D. Hayden, Jr., Inc.  The defendants also employed numerous “helpers” as part of this scheme, including, co-defendants Kent Sadler and Lawrence Daniel Murphy.

From at least 2007 to 2011, Hayden and Lednum engaged in a scheme to illegally poach tens of thousands of pounds of striped bass from the Chesapeake Bay in violation of Maryland regulations relating to harvest method, amounts, tagging, and reporting. In an effort to conceal their crimes, Hayden and Lednum falsified paperwork related to their harvests and submitted those falsified documents to the state of Maryland.  The state of Maryland in turn submits such paperwork to numerous Federal and interstate agencies responsible for setting harvest levels all along the eastern seaboard.  Hayden and Lednum shipped and sold the striped bass to wholesalers in New York, Pennsylvania, Delaware and Maryland, receiving a total of $498,293.47 for the poached fish. 

The investigation in this case started in February 2011 when the Maryland Department of Natural Resources found tens of thousands of pounds of striped bass snagged in illegal, anchored nets before the season officially reopened.  The conspirators were seen on the water in the vicinity of the illegal nets. The subsequent investigation unveiled a wider criminal enterprise for which Hayden and Lednum were sentenced today. 

Co-defendants Michael D. Hayden, 43, of Tilghman Island, Lawrence “Daniel” Murphy, 37, of St. Michaels, Maryland, and Kent Conley Sadler, 31, of Tilghman Island, previously pleaded guilty to their participation in the conspiracy. Murphy is scheduled to be sentenced on December 19, 2014, Sadler is scheduled to be sentenced on January 7, 2015 and Hayden is scheduled to be sentenced on Feb. 27, 2015.

The investigation into this case was conducted by the Maryland Department of Natural Resources and the U.S. Fish and Wildlife Service.   The prosecution was handled by Todd W. Gleason and Shennie Patel of the Department of Justice’s Environmental Crimes Section, and Assistant U.S. Attorney P. Michael Cunningham.

“The president’s actions today in providing clemency to eight individuals who were sentenced under outdated and unfair laws sustains his commitment to bring fairness to our criminal justice system. While all eight were properly held accountable for their criminal actions, their punishments did not fit their crimes, and sentencing laws and policies have since been updated to ensure more fairness for low-level offenders. All eight of these individuals meet the criteria I laid out under the President’s direction when I announced the Clemency Initiative in April: they are all non-violent, low-level offenders who have no significant criminal history nor ties to gangs or organized crime. All have served at least 10 years in prison with good conduct while incarcerated, and all would have gotten lesser sentences if convicted of the same crimes today."

“As I have said many times, for our criminal justice system to be effective, it needs to not only be fair; but it also must be perceived as being fair. That’s why we created the Clemency Initiative – in the hope of promoting that fundamental American ideal, equal justice under the law. The Justice Department will continue to identify applicants whom we can recommend to the president for commutation.”

 

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WASHINGTON, D.C. – Today President Barack Obama granted clemency to twenty individuals, consisting of eight commutations and twelve pardons.

 

The President granted commutations of sentence to the following eight individuals:

 

• Sidney Earl Johnson, Jr. – Mobile, AL

Offense:  Conspiracy to distribute and possess with intent to distribute cocaine base; possession with intent to distribute cocaine base; use of a communication facility to commit a felony (Southern District of Alabama)

Sentence:  Life imprisonment; 10 years’ supervised release (Apr. 13, 1994)

Commutation Grant:  Prison sentence commuted to expire on June 12, 2015.

 

•  Cathy Lee Jones – Portsmouth, VA

Offense:  Conspiracy to possess with intent to distribute and distribute heroin and cocaine base (Eastern District of Virginia)

Sentence:  262 months’ imprisonment; five years’ supervised release (Apr. 29, 2003)

Commutation Grant:  Prison sentence commuted to expire on April 15, 2015.

 

•  Rickey Marcell McCall – Birmingham, AL 

Offense:  Possession with intent to distribute in excess of 50 grams of a mixture and substance containing cocaine base; possession of a firearm by a convicted felon (two counts) (Northern District of Alabama)

Sentence:  Life imprisonment; 120 months’ supervised release (Jan. 11, 2001)

Commutation Grant:  Prison sentence commuted to expire on April 15, 2015.

 

•  Larry Nailor – Memphis, TN

Offense:  Possession of a controlled substance with intent to distribute approximately 50 grams of cocaine base (Western District of Tennessee)

Sentence:  Life imprisonment; 10 years’ supervised release (Nov. 7, 1997)

Commutation Grant:  Prison sentence commuted to expire on April 15, 2015.

 

•   Antonio Gromyko Reeves – Kennett, MO

Offense:  Distribution of five grams or more of cocaine base (Eastern District of Missouri)

Sentence:  188 months’ imprisonment; four years’ supervised release (May 21, 2004)

Commutation Grant:  Prison sentence commuted to expire on April 15, 2015.

 

•    Jennifer Regenos – Muscatine, IA

Offense:  Conspiracy to distribute methamphetamine (Southern District of Iowa)

Sentence:  240 months’ imprisonment; 10 years’ supervised release (Mar. 25, 2002)

Commutation Grant:  Prison sentence commuted to expire on April 15, 2015.

 

•   Barbara Lammsies Scrivner – Portland, OR 

Offense:  Conspiracy to manufacture, possess with intent to distribute, and distribute methamphetamine; possession with intent to distribute methamphetamine (District of Oregon)

Sentence:  360 months’ imprisonment; five years’ supervised release (July 3, 1995)

Commutation Grant:  Prison sentence commuted to expire on June 12, 2015.

 

•  Israel Abel Torres – Dallas, TX

Offense:  Conspiracy to possess with intent to distribute controlled substances; possession with intent to distribute cocaine base (Eastern District of Texas)

Sentence:  Life imprisonment; 10 years’ supervised release; $1,000 fine (Dec. 4, 1998)

Commutation Grant:  Prison sentence commuted to expire on April 15, 2015.

 

 

The President granted pardons to the following twelve individuals:

 

• Roy Norman Auvil – Bartonville, IL

Offense:  Possession of an unregistered distilling apparatus; working a distillery on which the required sign is not placed (District of South Carolina)

Sentence:  Five years’ probation (Nov. 16, 1964)

 

•  Bernard Bryan Bulcourf – McIntosh, FL

Offense:  Counterfeiting Federal Reserve notes (Southern District of Florida)

Sentence:  90 days’ confinement in a community treatment center, followed by three years’ probation (Nov. 18, 1988)

 

•   Steve Charlie Calamars – San Antonio, TX

Offense:  Possession of phenyl-2-propanone with intent to manufacture a quantity of methamphetamine (Western District of Texas)

Sentence:  57 months’ imprisonment; three years’ supervised release (May 31, 1989; as amended Apr. 8, 1994)

 

• Diane Mary DeBarri, fka Diane Mary Wilhelm – Fairless Hills, PA

Offense:  Conspiracy to manufacture and distribute methamphetamine; distribution of methamphetamine (Eastern District of Pennsylvania)

Sentence:  90 days’ imprisonment; five years’ probation conditioned on performance of community service as directed by the court (June 15, 1984)

 

•  Donnie Keith Ellison – London, KY

Offense:  Manufacture of marijuana (Eastern District of Kentucky)

Sentence:  Five months’ imprisonment; three years’ supervised release (Sept. 1, 1995)

 

• John Marshall French – Clovis, CA

Offense:  Conspiracy to transport a stolen motor vehicle in interstate commerce (District of South Carolina)

Sentence:  Three years’ probation conditioned on performance of 100 hours of community service and payment of $2,337 restitution (Mar. 2, 1993)

 

•  Ricardo Marcial Lomedico, Sr. – Point Roberts, WA

Offense:  Misappropriation of bank funds by an employee (Western District of Washington)

Sentence:  Five years’ imprisonment (Nov. 21, 1969)

 

•   David Raymond Mannix – Lafayette, OR

Offense:  Conspiracy to commit larceny; theft of military property (U.S. Marine Corps general court-martial convened at Camp Pendleton, CA)

Sentence:  75 days’ confinement; forfeiture of $350 pay per month for three months; reduction to Private First Class, pay grade E-2 (Oct. 18, 1989, as approved Mar. 2, 1990)

 

• David Neil Mercer – Grand Junction, CO

Offense:  Archaeological Resources Protection Act violation (District of Utah)

Sentence:  36 months’ probation; $2,500 fine; $1,437.72 joint and several restitution (Apr. 9, 1997)

 

• Claire Holbrook Mulford, fka Claire Audrey Holbrook – Flint, TX

Offense:  Using a residence to distribute methamphetamine; carrying a firearm during a drug-trafficking crime (Eastern District of Texas)

Sentence:  70 months’ imprisonment; two years’ supervised release (Dec. 3, 1993)

 

• Brian Edward Sledz – Naperville, IL

Offense:  Wire fraud; violation of the Commodity Exchange Act (Northern District of Illinois)

Sentence:  One year of probation conditioned on payment of $1,318 costs of supervision and $8,297.91 restitution (Apr. 29, 1993)

 

•  Albert Byron Stork – Delta, CO

Offense:  Filing a false tax return (District of Colorado)

Sentence:  Six months’ confinement in a jail-type or treatment institution; three years’ probation (May 8, 1987)

 

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The owner and president of a dietary supplement manufacturing company in Flanders, New Jersey, pleaded guilty today to conspiracy to commit wire fraud in relation to a scheme in which he directed the sale of diluted and adulterated dietary ingredients and supplements sold by his company, U.S. Attorney Paul J. Fishman announced. 

Barry Steinlight, 69, of Hackettstown, New Jersey, pleaded guilty to a one-count information charging him with conspiring to commit wire fraud.  As part of his plea agreement, Steinlight admitted that Raw Deal’s gross sales during the scheme were between $7 million and $20 million.  Steinlight has agreed to forfeit more than $1 million in profits from the scheme.

“Barry Steinlight diluted his products, cheated his customers and lied to the Food and Drug Administration when they came to inspect his company,” said U.S. Attorney Fishman.  “This scheme went on for four years and essentially became the business model at his company.  People who sell and use dietary supplements have the right to expect that the ingredients are listed and they get what they paid for.”

“This dietary supplement company owner ignored his basic obligations in his pursuit for profit,” said Acting Assistant Attorney General Joyce R. Branda for the Department of Justice’s Civil Division.  “American consumers have a right to know that the dietary supplements they purchase are safe to consume and that the ingredients listed on the label are actually in the bottle.  This case demonstrates the Department of Justice’s commitment to ensuring that those who deal products affecting the health and safety of consumers are law abiding and that wrongdoers will be held accountable.”

According to documents filed in this case and statements made in court:

Steinlight was the president and owner of Raw Deal Inc., a dietary supplement manufacturing facility.  From at least 2009 through November 2013, Steinlight instructed Raw Deal employees to add “fillers,” including maltodextrin, viobin cocoa replacer and rice flours to the dietary ingredients and supplements packaged for, and sold to, Raw Deal’s customers.  These “fillers” were added without customer consent or knowledge.  Steinlight also directed Raw Deal employees not to list the “fillers” as ingredients on the certificates of analysis (COAs) issued to its customers as proof of the identity of the ingredients contained in the products. 

In addition to directing the dilution and adulteration of Raw Deal’s products, Steinlight also directed Raw Deal employees to create COAs that falsely certified that certain of Raw Deal’s products were kosher or organic.  Further during an U.S. Food and Drug Administration (FDA) inspection of Raw Deal in February 2012, Steinlight instructed Raw Deal employees to alter a document before providing it to the FDA.

U.S. Attorney Fishman credited special agents of the FDA’s Office of Criminal Investigations, under the direction of Acting Special Agent in Charge James J. Royal, who investigated the case.

“When a company distributes adulterated and misbranded dietary supplements, they put consumers at risk,” said Acting Special Agent in Charge Royal.  “Today’s plea agreement should serve as a reminder that FDA’s Office of Criminal Investigations will continue working with the Department of Justice to protect consumers from public health risks and fraud.”

The conspiracy charge carries a statutory maximum sentence of five years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense.  Sentencing is scheduled for March 30, 2015.

The government is represented by Assistant U.S. Attorney Joseph Mack, Deputy Chief of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit, Special Assistant U.S. Attorney Shannon M. Singleton from the FDA’s Office of Chief Counsel, and Trial Attorneys Patrick Runkle and David Sullivan of the Civil Division’s Consumer Protection Branch.  Paralegal Jeffrey Skonieczny of the U.S. Attorney’s Office also assisted in the criminal investigation.

U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office for the District of New Jersey shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses.  Since 2010, the office has recovered more than $620 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug, and Cosmetic Act and other statutes.

The organizer of a $56 million Medicare fraud conspiracy and an accomplice physician pleaded guilty today in federal court in Louisiana to health care fraud charges. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Michael Anderson of the FBI’s New Orleans Field Office, Special Agent in Charge Mike Fields of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Regional Office and Louisiana Attorney General James D. “Buddy” Caldwell made the announcement.

Mark Morad, 51, of Slidell, Louisiana, and Dr. Divini Luccioni, 53, of Kenner, Louisiana, each pleaded guilty before Chief U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana today.  Morad pleaded guilty to conspiracy to commit health care fraud and conspiracy to falsify records in a federal investigation.  Dr. Luccioni pleaded guilty to conspiracy to commit health care fraud.  Sentencing hearings for each are scheduled for April 1, 2015. 

According to court documents, Morad directed a Medicare fraud scheme through multiple New Orleans-area companies he owned, including Interlink Health Care Services Inc., Memorial Home Health Inc., Lakeland Health Care Services Inc., Lexmark Health Care LLC, and Med Rite Pharmacy Inc.  Morad controlled all aspects of these companies, from hiring to deciding what services would be billed.  The companies claimed to provide home health services and durable medical equipment (DME) to thousands of Medicare beneficiaries living in and around New Orleans. 

Morad paid kickbacks to recruiters who canvassed New Orleans neighborhoods for Medicare beneficiary numbers, which Morad then used to bill Medicare for services that were not medically necessary or not provided.  Dr. Luccioni admitted that he signed home health referrals and wrote DME prescriptions that were used to support these fraudulent billings.  Specifically, court documents show that Dr. Luccioni falsely certified that beneficiaries were homebound and qualified for home health services, and that he wrote prescriptions for power scooters and other DME that he knew the purported beneficiaries did not need. 

When a federal grand jury subpoenaed records from another company Morad owned, he and others fabricated tax and employment records to conceal the companies’ illegal activities and mislead the grand jury.

Medicare billing records showed that between 2007 and 2014, Morad’s companies submitted more than $56 million in claims to Medicare, a vast majority of which were fraudulent.  Medicare paid approximately $50.7 million on these claims.

This case was investigated by the FBI, HHS-OIG and the Louisiana Attorney General’s Medicaid Fraud Control Unit, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Louisiana.  This case was prosecuted by William G. Kanellis of the Fraud Section. 

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

 

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced the sentencing of defendant MARIA C. EDROSA by the Honorable Frances Tydingco-Gatewood, Chief Judge, District Court of Guam. EDROSA was one of the defendants in the Organized Crime Drug Enforcement Task Force (OCDETF) case, United States v. Sardoma, et al. Defendant EDROSA received a 78-month sentence of imprisonment and three years of supervised release to follow, for disposal of a firearm to a felon, defendant Mateo Sardoma, in violation of 18 U.S.C. § 922(d)(1) and 18 U.S.C. § 924 (a)(2). The Court took into account the participation of defendant EDROSA in a Conspiracy to Distribute Methamphetamine run by her boyfriend, Mateo Sardoma.

The drug conspiracy involved a scheme to bring methamphetamine to Guam from the Philippines and California. This methamphetamine was traded for firearms, stolen items and for cash. Large amounts of cash were mailed to California including $35,000 on March 24, 2011 and $59,900 sent again on April 18, 2011 in exchange for multiple pound quantities of methamphetamine. Sardoma and EDROSA made improvements to their Dededo residence between April and June of 2011 in cash payments to the contractor of approx. $53,340. Defendant EDROSA assisted in the distribution of these narcotics, the shipment of cash through the mails and she purchased airline tickets to further the scheme. She also furnished a firearm to defendant Sardoma for use in the narcotics conspiracy. The firearm furnished by EDROSA was used by Sardoma to maintain control of the methamphetamine organization, and in the kidnapping, torture and brutal assault of one victim on October 24, 2011.

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

The investigating agencies include the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Drug Enforcement Administration (DEA), Department of Homeland Security/U.S. Immigration and Customs Enforcement (ICE) - Homeland Security Investigations (HSI), U.S. Coast Guard Investigative Service (USCGIS), U.S. Postal Inspection Service (USPIS), Guam Police Department (GPD) and Guam Customs & Quarantine Agency (GC&QA). The case was prosecuted by Assistant United States Attorneys Frederick Black and Stephen Leon Guerrero.

U.S. Attorney Booth Goodwin today announced that Freedom Industries Inc. (Freedom) and six former Freedom officials have been charged with various federal crimes related to the January 2014 Elk River chemical spill in Charleston.

“Just a mile upstream from Charleston’s primary source of drinking water, the conditions at the Freedom Industries facility were not only grievously unacceptable, but unlawful,” said Attorney General Eric Holder.  “They put an entire population needlessly at risk.  As these actions make clear, such conduct cannot, and will not, be tolerated.  These law enforcement actions send an unambiguous message: that compliance with environmental safety standards is an obligation, not a choice.  The Department of Justice is committed to vigorously enforcing the Clean Water Act and other natural resource protections.  And we will never rest in our efforts to protect the American people – and our environment – from harm.”

“It’s hard to overstate the disruption that results when 300,000 people suddenly lose clean water,” said Goodwin. “This is exactly the kind of scenario that the Clean Water Act is designed to prevent. This spill, which was completely preventable, happened to take place in this district, but it could have happened anywhere. If we don’t want it to happen again, we need to make it crystal clear that those who engage in the kind of criminal behavior that led to this crisis will be held accountable.”

Former Freedom President Gary L. Southern, 53, currently of Marco Island, Florida, along with former Freedom owners and officers Dennis P. Farrell, 58, of Charleston, William E. Tis, 60, of Verona, Pennsylvania, and Charles E. Herzing, 63, of McMurray, Pennsylvania, were indicted by a grand jury sitting at Beckley, West Virginia.  Freedom environmental consultant Robert J. Reynolds, 63, of Apex, North Carolina, and tank farm plant manager Michael E. Burdette, 60, of Dunbar, West Virginia, were charged by U.S. Attorney Goodwin in charging documents known as “informations.”  Freedom Industries Inc., was also charged in an information.

Southern is charged with the negligent discharge of a pollutant in violation of the Clean Water Act, negligent discharge of refuse matter in violation of the Refuse Act, and violating an environmental permit. Southern is also charged with bankruptcy fraud, mail fraud and wire fraud.  If Southern is convicted of all the charges contained in the indictment, he is exposed to a statutory maximum of 68 years in prison.

Farrell, Tis and Herzing are charged with the negligent discharge of a pollutant in violation of the Clean Water Act, negligent discharge of refuse matter in violation of the Refuse Act, and violating an environmental permit.  If Farrell, Tis and Herzing are convicted of all the charges with which they are charged in the indictment, they are each exposed to a statutory maximum of three years in prison.

The misconduct alleged in the indictment includes, but is not limited to:

 

• Failure to properly maintain the containment area surrounding the tanks at Freedom’s Elk River facility, and to make necessary repairs to ensure the containment area would contain a chemical spill;

• failure to properly inspect a tank containing the chemical MCHM;

• failure to develop and implement a spill prevention, control and countermeasures plan;

• failure to develop and implement a stormwater pollution prevention plan and groundwater protection plan, both requirements of a National Pollutant Discharge Elimination System Permit.

   

During the time they were responsible corporate officers for Freedom, Farrell, Tis, Herzing and Southern allegedly approved funding only for those projects that would result in increased business revenue for Freedom, or that were immediately necessary for required equipment maintenance.  They allegedly failed to take action to fund other repair and upkeep projects for equipment and systems necessary for environmental compliance at the Elk River facility, including repairing defects in a containment wall, addressing drainage problems in the containment area, and developing and implementing proper protection plans.

Information charges were also filed against Freedom itself, as well as Robert J. Reynolds and Michael E. Burdette. Freedom is charged with the negligent discharge of a pollutant in violation of the Clean Water Act, negligent discharge of refuse matter in violation of the Refuse Act, and violating an environmental permit. Michael Burdette, the former plant manager for the Freedom facility on the Elk River, and Robert Reynolds, also one of the individuals responsible for environmental compliance at Freedom, have each been charged with violating the Clean Water Act.

Charges contained in indictments and informations are merely accusations, and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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A Coral Gables, Florida, resident and former employee of the General Services Administration (GSA) of Miami-Dade County was sentenced to serve 51 months in prison for tax evasion to be followed by three years of supervised release, and ordered to pay $556,254 in restitution to the U.S. Treasury, the Justice Department and Internal Revenue Service (IRS) announced today.

On Oct. 15, 2014, Jesus Pons pleaded guilty to one count of tax evasion in the U.S. District Court for the Southern District of Florida.  According to the court documents, Pons was a computer services manager at the GSA of Miami-Dade County.  He was responsible for managing and allocating resources to information technology projects for the county.  Court filings also establish that he was responsible for supervising and managing tasks performed by county vendors.  From 2007 to 2011, Pons received money in the form of illegal kickback payments from two county vendors, Data Industries and Paradyne Consulting Services.  In exchange for these illegal kickbacks, Pons approved payments from Miami-Dade County to the vendors for consulting work that was never performed.  According to the plea agreement, Pons did not report the illegal kickbacks on his tax returns.  From 2007 through 2011, Pons earned $1,666,998 in income from the scheme that he did not report to the IRS, causing $556,254 in tax loss.

This case was investigated by special agents of IRS-Criminal Investigation.  The case was prosecuted by Trial Attorneys Jeffrey A. McLellan and Erin Pulice of the Justice Department’s Tax Division.

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 L. Piro of the FBI’s Miami Field Office and the members of the South Florida Joint Terrorism Task Force (JTTF), announce that Gufran Ahmed Kauser Mohammed, 31, a naturalized United States citizen and resident of Dammam, Saudi Arabia, was sentenced to 15 years in prison by U.S. District Judge Ursula Ungaro, for conspiring to provide material support to three separately designated Foreign Terrorist Organizations, al-Qa’ida, al-Qa’ida in Iraq/al-Nusrah Front (“AQI/al-Nusrah Front”), and al-Shabaab.

On July 11, 2014, Mohammed pled guilty to Count 1 of an Indictment charging him with conspiracy to provide money and recruits to al-Qa’ida, AQI/al-Nusrah Front in Syria, and al-Shabaab in Somalia.  The charges allege that Mohammed sent a series of wire transfers to coconspirator Mohamed Hussein Said for the purpose of supporting al-Shabaab, and to an individual whom he believed was a terrorist fundraiser, recruiter, and supplier for the purpose of supporting al-Qa’ida and AQI/al-Nusrah Front.  In addition, Mohammed agreed to support al-Qa’ida and AQI/al-Nusrah Front by recruiting individuals to fight in the conflict in Syria.  Mohammed earmarked certain of his financial contributions for the purpose of buying weapons and funding attacks on United States citizens or the United Nations.

Mr. Ferrer commended the investigative efforts of the FBI and the South Florida Joint Terrorism Task Force.  The case was prosecuted by Trial Attorney Jolie F. Zimmerman from the Counterterrorism Section of the Justice Department’s National Security Division and Assistant U.S. Attorneys Brian K. Frazier and Ricardo A. Del Toro.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.  Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

A chief engineer from the M/V Trident Navigator was convicted by a federal jury in New Orleans late yesterday after a week-long trial, of knowingly falsifying the vessel’s oil record book in violation of the Act to Prevent Pollution from Ships (APPS), obstruction of justice and witness tampering, announced the Department of Justice Environment and Natural Resources Division and the U.S. Attorney’s Office for the Eastern District of Louisiana.

Matthaios Fafalios, 64, a resident of Greece, was convicted of knowingly falsifying the vessel’s oil record book, obstruction of justice, and witness tampering related to his service onboard the M/V Trident Navigator and a subsequent U.S. Coast Guard boarding of the vessel in January 2014.  In late December 2013, Fafalios ordered his engineering crew to construct a hose known in the industry as a “magic hose” to discharge the oily waste water that was in the vessel’s bilge holding tank.  Two crewmembers onboard the vessel reported this illegal discharge to the Coast Guard.  When coast guard inspectors boarded the vessel, Fafalios attempted to hide critical documents from the inspectors that indicated the illegal discharge occurred.  Additionally, Fafalios ordered engineers under his command to lie to the Coast Guard about the illegal oily waste water discharge.

Consistent with requirements in the APPS regulations, a vessel like the M/V Trident Navigator, must maintain a record known as an oil record book in which transfer and disposal of all oil-contaminated waste and the discharge overboard and disposal otherwise of such waste, must be fully and accurately recorded by the person in charge of the operations. Oil-contaminated bilge waste can be discharged overboard if it is processed through on-board pollution prevention equipment known as the oily water separator (OWS).

The operator of the vessel, Marine Managers LTD., had previously pleaded guilty to knowingly falsifying the oil record book and obstruction of justice and paid a total criminal penalty of $900,000.00.

The case was investigated by the U.S. Coast Guard Investigative Service.  The case was prosecuted by Kenneth E. Nelson of the Environmental Crimes Section of the Department of Justice and by Emily Greenfield of the U.S. Attorney’s Office for the Eastern District of Louisiana.

Senior Venezuelan Banking Official Received at Least $5 Million in Bribes in Exchange for Directing Business to U.S. Defendants

The former chief executive officer and former managing director of a U.S. broker-dealer (the Broker-Dealer), pleaded guilty to bribery charges arising from their scheme to pay bribes to Maria De Los Angeles Gonzalez De Hernandez, who was a senior official in Venezuela’s state economic development bank, Banco de Desarrollo Económico y Social de Venezuela (Bandes), in return for trading business that generated more than $60 million in commissions. 

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

“Benito Chinea and Joseph DeMeneses are the fifth and sixth defendants to plead guilty in connection with this far-reaching bribery scheme, which ranged from Wall Street to the streets of Caracas,” said Assistant Attorney General Caldwell.  “The guilty pleas and the forfeiture of assets once again demonstrate that the Department is committed to holding corporate executives who engage in foreign bribery individually accountable and to deny them the proceeds of their corruption.”

According to the allegations in the indictment and other documents previously filed in Manhattan federal court:

Benito Chinea, 48, of Manalapan, New Jersey, and Joseph De Meneses, 45, of Fairfield, Connecticut, working with others, arranged the bribe payments to Gonzalez in exchange for her directing Bandes’s financial trading business to the Broker-Dealer.  Previously, Gonzalez, along with two employees of the Broker-Dealer, Tomas Alberto Clarke Bethancourt (“Clarke”) and Jose Alejandro Hurtado (“Hurtado”), pleaded guilty for their involvement in this bribery scheme.  A managing director of the Broker-Dealer, Ernesto Lujan (“Lujan”), also pleaded guilty for his role in the scheme.

Background on the Broker-Dealer and Bandes

At all times relevant to the charges, Chinea was the chief executive officer and De Meneses was a managing director in the Broker-Dealer, which was headquartered in New York, New York, with offices in Miami, Florida.  In 2008, the Broker-Dealer established a group called the Global Markets Group, which included De Meneses, Lujan, and Clarke, and which offered fixed income trading services to institutional clients.  One of the Broker-Dealer’s clients was Bandes, which operated under the direction of the Venezuelan Ministry of Finance.  The Venezuelan government had a majority ownership interest in Bandes and provided it with substantial funding.  Gonzalez was an official at Bandes and oversaw the development bank’s overseas trading activity.  At her direction, Bandes conducted substantial trading through the Broker-Dealer.  Most of the trades executed by the Broker-Dealer on behalf of Bandes involved fixed income investments for which the Broker-Dealer charged Bandes a mark-up on purchases and a mark-down on sales. 

             The Bribery Scheme

As alleged in court documents, from late 2008 through 2012, Chinea and De Meneses, together with three Miami-based Broker-Dealer employees, Lujan, Clarke and Hurtado, participated in a bribery scheme in which Gonzalez directed trading business she controlled at Bandes to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer split the revenue the Broker-Dealer generated from this trading business with Gonzalez.  During this time period, the Broker-Dealer generated over $60 million in commissions from trades with Bandes. 

In order to conceal their conduct, Chinea, De Meneses and their co-conspirators routed the payments to Gonzalez, frequently in six-figure amounts, through third-parties posing as “foreign finders” and into offshore bank accounts.  In several instances, Chinea personally signed checks worth millions of dollars that were made payable to one of these purported “foreign finders” and later deposited in a Swiss bank account.

As further alleged in court documents, as a result of the bribery scheme, Bandes quickly became the Broker-Dealer’s most profitable customer.  As the relationship continued, however, Gonzalez became increasingly unhappy about the untimeliness of the payments due her from the Broker-Dealer, and she threatened to suspend Bandes’s business.  In response, De Meneses and Clarke agreed to pay Gonzalez approximately $1.5 million from their personal funds.  Chinea and De Meneses agreed to use Broker-Dealer funds to reimburse De Meneses and Clarke for these bribe payments.  To conceal their true nature, Chinea and De Meneses agreed to hide these reimbursements in the Broker-Dealer’s books as sham loans from the Broker-Dealer to corporate entities associated with De Meneses and Clarke.

Chinea and De Meneses each pleaded guilty before U.S. District Judge Denise L. Cote of the Southern District of New York to one count of conspiracy to violate the Foreign Corrupt Practices Act and the Travel Act.  Chinea and De Meneses have also agreed to pay $3,636,432 and $2,670,612 in forfeiture, respectively, which amounts represent their earnings from the bribery scheme.  Sentencing hearings are scheduled for March 27, 2015.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  For more information on the task force, visit www.stopfraud.gov.

This case is being investigated by the FBI, and prosecuted Senior Deputy Chief James Koukios of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York.  Assistant U.S. Attorney Carolina Fornos of the Southern District of New York is responsible for the forfeiture aspects of the case.  The U.S. Securities and Exchange Commission also assisted with this investigation.

Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Avon Products Inc. and Avon Products (China) Co. Ltd. Will Pay More than $135 Million in Criminal and Regulatory Penalties

Avon Products (China) Co. Ltd. (Avon China), a wholly owned subsidiary of the New York-based cosmetics company, Avon Products Inc. (Avon), pleaded guilty today to conspiring to violate the accounting provisions of the Foreign Corrupt Practices Act (FCPA) to conceal more than $8 million in gifts, cash and non-business meals, travel and entertainment it gave to Chinese government officials in order to obtain and retain business benefits for Avon China.  Avon China and Avon admitted the improper accounting and payments and Avon entered into a deferred prosecution agreement to resolve the investigation.  In a proceeding today before United States District Judge George B. Daniels, the criminal Informations were filed against Avon and Avon China, and Avon China entered its guilty plea and was sentenced.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office made the announcement.   

“Companies that cook their books to hide improper payments will face criminal penalties, as Avon China's guilty plea demonstrates,” said Assistant Attorney General Caldwell.  “Public companies that discover bribes paid to foreign officials, fail to stop them, and cover them up do so at their own peril.”

“For years in China it was ‘Avon calling,’ as Avon bestowed millions of dollars in gifts and other things on Chinese government officials in return for business benefits,” said U.S. Attorney Bharara.  “Avon China was in the door-to-door influence-peddling business, and for years its corporate parent, rather than putting an end to the practice, conspired to cover it up.  Avon has now agreed to adopt rigorous internal controls and to the appointment of a monitor to ensure that reforms are instituted and maintained.”

“When corporations knowingly engage in bribery in order to obtain and retain contracts, it disrupts the level playing field to which all businesses are entitled,” said FBI Assistant Director in Charge McCabe.  “Companies who attempt to advance their businesses through foreign bribery should be on notice.  The FBI, with our law enforcement partners, is continuing to push this unacceptable practice out of the business playbook by investigating companies who ignore the law.”

Avon China pleaded guilty to a criminal information filed today in the U.S. District Court for the Southern District of New York charging the company with conspiring to violate the books and records provisions of the FCPA.  Avon, the parent company, entered into a deferred prosecution agreement today and admitted its criminal conduct, including its role in the conspiracy and its failure to implement internal controls.  Pursuant to the deferred prosecution agreement, the department filed a criminal information charging Avon with conspiring to violate the books and records provisions of the FCPA and violating the internal controls provisions of the FCPA.  In total, the Avon entities will pay $67,648,000 in criminal penalties.  Avon also agreed to implement rigorous internal controls, cooperate fully with the department and retain a compliance monitor for at least 18 months. 

Avon settled a related FCPA matter with the U.S. Securities and Exchange Commission (SEC) today, and will pay an additional $67,365,013 in disgorgement and prejudgment interest, bringing the total amount of U.S. criminal and regulatory penalties paid by Avon and Avon China to $135,013,013.

According to court documents, from at least 2004 through 2008, Avon and Avon China conspired to falsify Avon’s books and records by falsely describing the nature and purpose of certain Avon China transactions.  Specifically, the companies sought to disguise over $8 million in gifts, cash and non-business travel, meals and entertainment that Avon China executives and employees gave to government officials in China in order to obtain and retain business benefits for Avon China.  Avon China attempted to disguise the payments and benefits through various means, including falsely describing the nature or purpose of, or participants associated with such expenses, and falsely recording payments to a third party intermediary as payments for legitimate consulting services.  

The companies also admitted that in late 2005 Avon learned that Avon China was routinely providing things of value to Chinese government officials and failing to properly document them.  Instead of ensuring the practice was halted, fixing the false books and records, disciplining the culpable individuals, and implementing appropriate controls to address this problem, the companies took steps to conceal the conduct, despite knowing that Avon China’s books and records, and ultimately Avon’s books and records, would continue to be inaccurate. 

Court filings acknowledge Avon’s cooperation with the department, including conducting an extensive internal investigation, voluntarily making U.S. and foreign employees available for interviews, and collecting, analyzing, translating and organizing voluminous evidence.   

The case is being investigated by the FBI’s Washington Field Office, and prosecuted by Senior Trial Attorney Laura Perkins of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sarah Paul of the Southern District of New York.  The Justice Department expresses its appreciation for the significant assistance provided by the SEC’s Division of Enforcement in this investigation.

A 131-count criminal indictment was unsealed today in Boston in connection with the 2012 nationwide fungal meningitis outbreak, the Justice Department announced.  Barry J. Cadden, owner and head pharmacist of New England Compounding Center (NECC) and NECC’s supervisory pharmacist Glenn A. Chin were charged with 25 acts of second-degree murder in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia.   

The outbreak was caused by contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC, located in Framingham, Massachusetts.  The U.S. Centers for Disease Control and Prevention (CDC) reported that 751 patients in 20 states were diagnosed with a fungal infection after receiving injections of NECC’s MPA.  Of those 751 patients, the CDC reported that 64 patients in nine states died. 

Twelve other individuals, all associated with NECC, including six other pharmacists, the director of operations, the national sales director, an unlicensed pharmacy technician, two of NECC’s owners, and one other individual were charged with additional crimes including racketeering, mail fraud, conspiracy, contempt, structuring, and violations of the Food, Drug and Cosmetic Act.

“As alleged in the indictment, these employees knew they were producing their medication in an unsafe manner and in insanitary conditions, and authorized it to be shipped out anyway, with fatal results,” said Attorney General Eric Holder.  “With the indictment and these arrests, the Department of Justice is taking decisive action to hold these individuals accountable for their alleged participation in grievous wrongdoing.  Actions like the ones alleged in this case display not only a reckless disregard for health and safety regulations, but also an extreme and appalling indifference to human life.  American consumers have a right to know that their medications are safe to use, and this case proves that the Department of Justice will always stand resolute to ensure that right, to protect the American people, and to hold wrongdoers accountable to the fullest extent of the law.”

“Every patient receiving treatment deserves the peace of mind and knowledge that the medicine they are receiving is safe,” said Acting Associate Attorney General Stuart Delery.  “When people and companies violate that trust and break the law, the consequences to patients and their families can be catastrophic.  That’s why it remains a priority of the Department to use every tool at our disposal to protect patients’ safety and hold bad actors accountable.”

“Those who produce and sell the drugs that we take have a special responsibility to make sure that they prepare those drugs under suitable conditions, and that what leaves their facilities is safe,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “The indictment charges that the defendants’ conduct in this case was corrupt and carried out with a complete disregard to the public’s health.  The department‘s Consumer Protection Branch along with our law enforcement partners is steadfast in our commitment to use every criminal and civil tool at our disposal to hold accountable those who are willing to put our lives at risk in the reckless pursuit of their profits.”

“Ever since the outbreak occurred, we have been committed to bringing to justice the individuals responsible for the deaths and suffering of so many innocent victims,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts.  “The indictment announced today is the first step in that process which addresses alleged criminal wrongdoing at NECC, a business that prioritized production and profit over safety.  We will make every effort to ensure that licensed pharmacists, and those working with them, are held to a standard of care that protects the public from unsafe and dangerous medications.” 

“Two years after the fungal meningitis outbreak, our hearts continue to go out to the victims of this tragedy and to their families,” said FDA Commissioner Margaret A. Hamburg M.D.  “Our work on behalf of all patients who want and deserve medicines that do not subject them to undue risk is far from done.  The FDA will continue to work aggressively on many fronts with the states, the Department of Justice, and others to protect the American public from unsafe compounded drug products.” 

“Threats to public health, as alleged in today's indictment, are a priority for the FBI,” said Assistant Director Joseph S. Campbell of the FBI’s Criminal Division.  “Together with our law enforcement and regulatory agency partners, we are determined to stop practices that jeopardize patients' health and violate the public trust.  These types of investigations are complex and resource intensive.  We greatly appreciate the efforts of our partners in this case and look forward to working with them to effectively identify criminal activities and combat fraudulent and abusive health practices in the future.”

The 14 individuals charged in the indictment are Barry J. Cadden, 48, of Wrentham, Massachusetts; Glenn A. Chin, 46, of Canton, Massachusetts; Gene Svirskiy, 33, of Ashland, Massachusetts; Christopher M. Leary, 30, of Shrewsbury, Massachusetts; Joseph M. Evanosky, 42, of Westford, Massachusetts; Scott M. Connolly, 42, of East Greenwich, Rhode Island; Sharon P. Carter, 50, of Hopkinton, Massachusetts; Alla V. Stepanets, 34, of Framingham, Massachusetts; Gregory A. Conigliaro, 49 of Southborough, Massachusetts; Robert A. Ronzio, 40, of North Providence, Rhode Island; Kathy Chin, 42, of Canton, Massachusetts; Michelle Thomas, 31 of Cumberland, Rhode Island; Carla Conigliaro, 51, of Dedham, Massachusetts and Douglas A. Conigliaro, 53, of Dedham, Massachusetts.  

The 25 second-degree murders are included in the indictment as predicate racketeering acts under the Racketeer Influenced and Corrupt Organizations Act (RICO).  These charges relate to patients who received NECC MPA and died in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia. As a general matter, and depending on particular state law, second-degree murder does not require the government to prove Cadden and Chin had specific intent to kill the 25 patients, but rather that Cadden and Chin acted with extreme indifference to human life.  According to the indictment, Cadden and Chin knew that NECC was making MPA in a manner and in an environment in which they could not assure that the drug was sterile as it was identified to be.  Despite knowing that they were making the MPA in an unsafe manner and in insanitary conditions, Cadden and Chin nonetheless allegedly directed and authorized the shipping of MPA to NECC customers nationwide.  It is alleged that Cadden and Chin were aware that doctors would inject MPA into their patients’ bodies, and that if the MPA was not in fact sterile, it could kill them. 

The 25 murder racketeering acts comprise only a portion of the broad racketeering scheme charged in the indictment.  The indictment also alleges that NECC’s other pharmacists knowingly made and sold numerous drugs in a similar unsafe manner and in insanitary conditions.  The unsafe manner alleged in the indictment includes, among other things, the pharmacists’ failure to properly sterilize NECC’s drugs, failure to properly test NECC’s drugs for sterility, and failure to wait for test results before sending the drugs to customers.  The insanitary conditions alleged in the indictment include, among other things, NECC’s lack of proper cleaning and NECC’s failure to take any action when its own environmental monitoring repeatedly detected mold and bacteria within NECC’s clean room suite of rooms throughout 2012. 

It is further alleged that NECC repeatedly took steps to shield its operations from regulatory oversight by the FDA by claiming to be a pharmacy dispensing drugs pursuant to valid, patient-specific prescriptions.  In fact, NECC routinely dispensed drugs in bulk without valid prescriptions.  The indictment alleges that NECC even used fictional and celebrity names on fake prescriptions to dispense drugs. 

Finally, the indictment charges Carla Conigliaro, the majority shareholder of NECC, and her husband Douglas Conigliaro with transferring assets following the fungal meningitis outbreak.  Specifically, the indictment charges that after NECC declared bankruptcy, and the bankruptcy court ordered the shareholders not to transfer assets, Carla and Doug Conigliaro transferred approximately $33.3 million to eight different bank accounts opened after the NECC bankruptcy. 

Cadden and Chin face a maximum of up to life in prison if convicted on all counts. 

“Although no VA patients were affected by the fungal meningitis outbreak, VA unknowingly purchased a variety of pharmaceutical products over a three year period from NECC that were intentionally produced in an unsafe manner under insanitary conditions,” said Assistant Inspector General for Investigations James J. O’Neill for the Office of Inspector General, Department of Veterans Affairs.  “We are pleased to have contributed to this outstanding multi-agency criminal investigation.”

“Today's results are part of an ongoing effort by the Defense Criminal Investigative Service and its law enforcement partners to protect the integrity of the Department of Defense's health care program and the quality of care our service members receive,” said Deputy Inspector General for Investigations James B. Burch for the U.S. Department of Defense Office of the Inspector General.  “The Defense Criminal Investigative Service will continue to pursue allegations of health care fraud that put the Warfighter at risk.”

“The U.S. Postal Inspection Service is pleased to join our federal partners in this announcement” said Postal Inspector in Charge Shelly A. Binkowski of the Boston Division.  “What's particularly disturbing about this case is that through their alleged misrepresentation and greed, these defendants put the health and well-being of others at a high level of risk.  This criminal action today demonstrates the commitment and vigilance of postal inspectors and other federal agents to pursue criminals who prey on the public in such an egregious way.”

In announcing the indictment today, Attorney General Holder and U.S. Attorney Ortiz acknowledged the assistance and cooperation of Michigan State Attorney General Bill Schuette.  The state of Michigan had the most deaths during the outbreak.

The investigation was conducted by the FDA Office of Criminal Investigations and the FBI with assistance by the Defense Criminal Investigative Service, U.S. Department of Defense, Office of Inspector General; Department of Veterans Affairs Office of Inspector General and U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of the Health Care Fraud Unit for the U.S. Attorney’s Office in the District of Massachusetts, and Trial Attorney John W.M. Claud of the Civil Division’s Consumer Protection Branch.

The details contained in the indictment are allegations.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

Victims with questions about today’s charges may call 1-888-221-6023 or email usama.victimassistance@usdoj.gov.

On Dec. 15, 2014, a Casper, Wyoming, man was sentenced to serve one year and one day in prison for tax fraud by U.S. District Court Judge Alan B. Johnson in the District of Wyoming.

Sonny Pilcher pleaded guilty on June 2, 2014, to one count of obstructing the administration of the internal revenue laws.  During his guilty plea hearing, Pilcher admitted that he claimed a false expense of $258,000 for a repaid business loan on his tax return for 2008, and, over several years, he paid his employees in cash to evade employment taxes.

At the sentencing hearing, the government’s evidence showed that Pilcher impeded the Internal Revenue Service (IRS) by destroying income records for his business, CC Cowboys, commingling money between bank accounts of separate businesses, and creating 242 fraudulent invoices totaling $3.9 million.  The evidence showed that in 2007 and 2008, Pilcher received approximately $750,000 from the fraudulent invoices, which was not reported on his income tax returns.  In a previous interview with the IRS special agent investigating the case, Pilcher admitted that he did not have a personal bank account and that he only ever used cash to pay for his living expenses.

Pilcher was also sentenced to one year of supervised release following his prison term and required to pay a $10,000 fine.

This case was investigated by special agents in the Cheyenne, Wyoming, office of IRS-Criminal Investigation and was prosecuted by Trial Attorneys Lori A. Hendrickson and Ignacio Perez de la Cruz of the Justice Department’s Tax Division.

 “I am delighted to welcome John Cruden back to the Department of Justice as Assistant Attorney General for the Environment and Natural Resources Division.

“John has already devoted more than two decades of his life and service to the department – enforcing our nation’s environmental laws; protecting our air, water, land, and wildlife; defending federal agencies; and honoring U.S. treaty rights and obligations to Native Americans.   From Exxon Valdez to Love Canal to the Deepwater Horizon oil spill, John Cruden has consistently demonstrated the tenacity, the leadership, and the strength of character that represents the very best that this Department of Justice has to offer.  He is uniquely qualified to lead this division’s efforts to meet the challenges posed by climate change, illegal wildlife trafficking, pollution, and natural resource management, among many other pressing issues.

“I also want to express my deep gratitude to Sam Hirsch and Bob Dreher, who have led ENRD with great distinction in a time of significant challenges.  Their stewardship has been invaluable to the division’s mission and people.  Their service has helped make the division one of the best places to work in the federal government.  And their outstanding leadership has been vital in advancing our efforts to protect the American people and our environment.”

 

Admits to Soliciting Sexual Favors in Exchange for Potential Lenient Treatment

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

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Adam S. Lee of the FBI’s Richmond Division and Special Agent in Charge Michael Tompkins of the  Department of Justice Office of the Inspector General’s Washington Field Office made the announcement. 

“Kevin Moore took a solemn oath to protect and serve the public, but then abused the authority of his badge by sexually exploiting a federal witness,” said Assistant Attorney General Caldwell.  “When Moore crossed the line from enforcing the law to breaking it, his actions cast an unfortunate shadow over the selfless and courageous work of his fellow officers.  Working with our law enforcement partners, the Department of Justice will expose and prosecute all such abuses of authority, in order to restore and maintain the public’s trust.”

“Cases involving corruption of law enforcement officials are among the FBI’s highest priority criminal investigations.  The public should expect integrity from those sworn to uphold the law.  Mr. Moore’s breach of his sworn duty in this case is particularly pernicious as he exploited his victims in the most personal way. The Richmond Division of the FBI continues to have confidence in the City of Salem Police Department.  We value our partnership with the Department and the proud men and women who serve their community with distinction everyday,” said Special Agent in Charge Lee.

“The OIG will aggressively investigate with its law enforcement partners allegations of misconduct among Department employees, contractors, and deputized task force officers to help ensure the Department of Justice performs its critical work with integrity,” said Special Agent in Charge Tompkins.

Kevin C. Moore, 42, of Roanoke, Virginia, was a Salem Police Department officer and was assigned to the DEA task force in Roanoke, Virginia.  According to his plea agreement and accompanying statement of facts, between June and September 2014,  Moore informed a female cooperating defendant that he was in a position to help her with her pending federal methamphetamine trafficking case.  In August 2014, for example, in a series of text messages with the cooperating defendant, Moore made clear that he could recommend a favorable sentence to the prosecutor on the cooperating defendant’s behalf in exchange for sexual favors.  Moore then convinced the cooperating defendant to go for a ride in his official vehicle where she performed a sexual act with Moore.

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

Moore pleaded guilty to a one-count information charging him with bribery before Chief U.S. District Judge Glen E. Conrad of the Western District of Virginia.  In cooperation with the City of Salem Police Department and DEA, Moore was arrested on Oct. 10, 2014, without incident, after being charged by complaint, and was suspended from the police department and DEA task force the same day.  His sentencing is scheduled for February 9, 2015.

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

U.S. District Court Judge Susan Richard Nelson sentenced Tieu Tran, 59, of Mankato, Minn., to serve one year and one day in prison followed by 1 year supervised probation upon release, the Justice Department announced today.  Tran pleaded guilty to one count of forced labor trafficking on March 25, 2014.  Tran is the former owner and manager of Nails By Jordan, a nail salon located in Mankato.

According to evidence presented in court proceedings and documents, in 2008, Tran recruited a woman from Vietnam to travel to the United States using false promises of legal immigration status and a high-paying job.  In reality, Tran smuggled the victim and two other Vietnamese nationals across the southern U.S.-Mexico border, imposed a significant debt upon her, and forced her to pay down the smuggling debt by working at Tran’s son’s Vietnamese restaurant, Pho Saigon, in Mankato. 

Tran admitted to compelling the victim to work long hours without paying her as promised, using a scheme, plan and pattern of coercion, including manipulation of debts, isolation, and intimidation that held the victim in fear, knowing that the victim was without legal status and money, did not speak English, feared losing her family home in Vietnam to creditors, and had nowhere else to turn for subsistence.

“This defendant callously preyed on the victim’s vulnerabilities and exploited her labor through intimidation, debts, and isolation,” said Deputy Assistant Attorney General Mark Kappelhoff for the Civil Rights Division.  “Human trafficking is an affront to human rights and to our nation’s core values, and the Justice Department is committed to vindicating the rights of the victims and to bringing human traffickers to justice.”

“Prosecuting human traffickers is a priority of this Office,” said U.S. Attorney Andrew M. Luger for the District of Minnesota.  “Tieu Tran smuggled this victim into the United States who she forced to work long hours in her nail salon by isolating and intimidating her. This kind of abuse simply is unjust.  I am proud to work with the Department of Justice and Federal Bureau of Investigation to end human trafficking in Minnesota.”

“The FBI remains committed to ensuring that innocent persons are not exploited by human traffickers,” said Special Agent in Charge Richard T. Thornton for the FBI Minneapolis Division.  “There will be no safe harbor granted to those who prey upon vulnerable people.  Those who exploit other human beings will continue to be high priority targets for the FBI.”

As part of her plea agreement, Tran agreed to nullify all debts imposed upon the victim, and upon seven other individuals.  The Court further ordered that Tran pay 51,844 in restitution to the victim.

This case was investigated by the FBI and is being prosecuted by Trial Attorney William Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit and Assistant U.S. Attorney David Steinkamp of the U.S. Attorney’s Office for the District of Minnesota.

City of St. Anthony Village Agrees to Allow Abu Huraira Islamic Center a Permit to Worship in St. Anthony Business Center

Acting Assistant Attorney General for Civil Rights Vanita Gupta and U.S. Attorney for the District of Minnesota Andrew M. Luger today announced a settlement agreement in principle between the Department of Justice and the City of St. Anthony Village, Minnesota, resolving allegations that the city violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA).  In June 2012, the City of St. Anthony Village denied Abu-Huraira Islamic Center’s application for a conditional use permit (CUP) to use the basement of the St. Anthony Business Center for religious assembly.  The agreement, which must still be approved by the Saint Anthony City Council and a federal district judge in Minneapolis, will resolve the lawsuit filed in August, 2014 by the United States against the City of St. Anthony Village.

“The Department of Justice will remain vigilant to ensure that the freedom to worship is a reality for all," said Acting Assistant Attorney General Vanita Gupta.  “We are pleased that the city worked with us to ensure that the rights of this congregation and others will be protected.”

“Four months ago, my office filed a civil rights lawsuit to protect the religious freedoms of the congregants of the Abu-Huraira Islamic Center,” said U.S. Attorney Luger.  “We made it clear then that an injustice had been done to these Somali Minnesotans.  After lengthy negotiations involving attorneys from my office and the Department of Justice, St. Anthony Village, and Abu-Huraira, we have reached a resolution that respects the Constitution and provides the worship space that Abu-Huraira sought.  This agreement would not have been possible without the guiding hand of Magistrate Judge Jeffrey J. Keyes, whose wisdom and hard work brought us to this resolution.  Today we all join together to announce with great pride that the Abu-Huraira Islamic Center has a new home in St. Anthony Village.”

The city has agreed, in principle, to create a Planned Use Development (PUD) at the property in question.  The PUD will allow Abu-Huraira to use the St. Anthony Business Center for religious worship.  The agreed upon language also stipulates that the city of St. Anthony Village will not treat Abu-Huraira or any other religious groups in a discriminatory manner by application of its zoning laws.  The agreement also indicates that elected leaders, managers, and certain city employees will participate in educational training about requirements of RLUIPA.  The city of St. Anthony Village will also make RLUIPA information available to the public through its website and will report periodically to the Justice Department.

On Aug. 27, 2014, the United States filed a lawsuit to enforce Abu-Huraira Islamic Center’s constitutional rights under RLUIPA and require the city of St. Anthony Village to allow Abu-Huraira’s religious assembly.  The United States’ complaint alleged that denial of the permit imposed a substantial burden on Abu-Huraira’s exercise of religious worship.  Moreover, the denial unlawfully disfavored a religious use, because the light industrial district where Abu-Huraira’s building is located allowed other, non-religious assemblies.

The United States specifically alleged that the denial of the conditional use permit substantially burdened members of Abu-Huraira in practicing their faith. Abu-Huraira members’ ability to exercise their religion was limited by their worship site options, including, but not limited to, the fact that  members in the northern Twin Cities were burdened from praying together based on the length of time to travel to worship centers in south Minneapolis.  Moreover, prayer space at locations in south Minneapolis were too small to accommodate members, many of whom often prayed in hallways or entryways, and prayer sessions were held in shifts to accommodate crowds.

After conducting a search for adequate prayer space lasting nearly three years, Abu-Huraira entered into a purchase agreement for the St. Anthony Business Center.  Abu-Huraira chose the property because it is centrally located, has a basement measuring approximately 11,600 square feet and has ample parking for its congregation.  The business center is in St. Anthony’s “light industrial” district, which permitted conditional uses for “assemblies, meeting lodges, and convention halls” at that time.

In February 2012, after consulting St. Anthony Village officials, Abu-Huraira applied for a CUP for assembly.  The permit was denied on June 12, 2012, by a St. Anthony Village City Council vote of 4-1.

Attorneys from the Civil Rights Division of the United States Department of Justice and Assistant United States Attorneys for the District of Minnesota, Bahram Samie, Ana Voss, and Gregory Brooker, represented the United States in this matter.

RLUIPA, enacted in 2000, contains multiple provisions prohibiting religious discrimination and protecting against unjustified burdens on religion exercise.  Persons who believe that they been subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section of the Justice Department’s Civil Rights Division at 1-800-896-7743.  More information about RLUIPA, including a report on the first ten years of its enforcement, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.  

An Italian shipping firm based in Genoa, Italy, pleaded guilty to violating the Act to Prevent Pollution from Ships by falsifying required ships’ documents to hide the fact that the ship had illegally discharged oil contaminated waste into the ocean on multiple occasions, announced the Department of Justice Environment and Natural Resources Division, the U.S. Attorney’s Office for the Middle District of Florida, and the U.S. Coast Guard.

Carbofin S.PA. (Carbofin) agreed to plead guilty to three counts of violating the Act to Prevent Pollution from Ships related to the deliberate concealment of vessel pollution from its ship, the M/T Marigola, which called on Tampa on three occasions in 2013 and 2014 with a falsified oil record book.  Under the terms of its plea agreement, Carbofin agreed to pay a $2.75 million criminal penalty, $600,000 of which will be designated as community service and used to support the protection and preservation of natural resources located in and adjacent to the Florida National Keys Marine Sanctuary.

Alessandro Messore, who served as the second engineer aboard the M/T Marigola, pleaded guilty to one count of violating the Act to Prevent Pollution from Ships for his role in the offense.  A second officer, Carmelo Giano, who served as the ship’s chief engineer and was the person responsible for maintaining the ship’s oil record book, is expected to enter a plea to one count of violating the Act to Prevent Pollution from Ships on Friday.

According to documents filed in this case and statements made in court:

Carbofin owns and operates a fleet of commercial liquefied gas vessels, including the M/T Marigola. The investigation began on April 16, 2014, when the vessel called on the Port of Tampa to unload its cargo.  U.S. Coast Guard inspectors boarded the ship to conduct a Port State Control examination.  During that examination, two crewmembers approached the inspectors and provided them with a cell phone video that showed a black hose connected between two points in the engine room.  After reviewing the video and speaking with the crewmembers, the inspectors were able to determine that the hose, known in the maritime industry as a “magic hose,” had been used on multiple occasions to discharge sludge, waste oil, and machinery space bilge water directly into the sea, bypassing the ship’s required pollution prevention equipment.  Crewmembers told the inspectors that Giano has directed them on at least two occasions to discharge sludge, waste oil, and bilge water directly into the sea, while in international waters.  Even though required to be, none of the magic hose discharges were recorded as required in the ship’s official oil record book maintained by Giano, thereby giving the false and misleading impression that all of the ship’s sludge, waste oil and machinery space bilge water were being properly treated and disposed of.  The investigation also revealed that Messore, at the direction of Giano, had on several occasions ordered the ship’s engineering cadet to hook up the magic hose and then personally discharged discharge sludge, waste oil, and machinery space bilge water directly into the sea, under the cover of darkness, while the vessel was in international waters.

On ships like the M/T Marigola oily engine room waste known as sludge, waste oil, and bilge water are generated on a regular basis.  Sludge is the by-product of the purification of the vessel’s lubrication and fuel oils that are used in electrical generation machinery and the main propulsion engine.  Waste oil is the result of oil leakages from various machinery as well as from replacing lubrication oils in the machinery.  Bilge water refers to the accumulation in the bilge, which is the bottom-most portion of the engine room, of oil and water that drips and leaks from the machinery.  Sludge and waste oil can only be legally disposed of in two ways: (1) incineration in the vessel’s onboard incinerator; or (2) disposal to a barge or other shore-based disposal facility.  Bilge water can also be disposed of in only two ways: (1) process through the onboard oil water separator and oil content meter resulting in an overboard discharge of water with no more than 15 parts per million (“ppm”) of oil, or (2) disposal to a barge or other shore-based disposal facility.  Bilge water is transferred to, and stored in, the vessel’s bilge water holding tank.  All disposals and transfers of sludge, waste oil, or bilge water, whether through incineration, use of the oil water separator, or transfer to a shore-based facility, must be recorded by the person or persons in charge of those operations in the vessel’s oil record book.  On the M/T Marigola, chief engineer Giano maintained the oil record book and recorded all entries therein.

The case was investigated by the Coast Guard Investigative Service.  The case was prosecuted by the U.S. Attorney’s Office for the Middle District of Florida and the Environmental Crimes Section of the U.S. Department of Justice.

An Iowa man was sentenced to 20 years in prison today in the District of Massachusetts for enticing a 10-year-old girl to engage in sexually explicit conduct online, which he directed and watched live via a webcam.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Inspector in Charge Shelly Binkowski of the U.S. Postal Inspection Service (USPIS) made the announcement after sentencing by U.S. District Court Chief Judge Patti B. Saris of the District of Massachusetts.

Joshua Dunfee, 32, of Oxford Junction, Iowa, pleaded guilty in March 2014 to enticing a child to engage in illicit sexual activity and using a child to produce child pornography. 

According to admissions in connection with his guilty plea, Dunfee posed as “John” from “Hunt Photography” on Facebook and communicated with a Massachusetts mother who was seeking employment as a model.  In October 2011, Dunfee contacted the mother and told her that Hunt Photography had a client willing to pay $20,000 for a mother-daughter bikini modeling contract.  Dunfee told the mother that in order to apply she would need to audition her daughter for him immediately, and persuaded the mother to take her 10 year-old daughter out of school. 

Dunfee further admitted that he directed the mother to “audition” her daughter via webcam in a 48-minute video call.  Knowing that she was a minor, Dunfee directed that the 10 year-old girl be posed in a bra and underwear and then completely naked. 

On Nov. 3, 2011, federal agents executed a search warrant at Dunfee’s residence, where law enforcement had traced the illicit conduct via IP address records.  A forensic examination of Dunfee’s computers revealed his use of Facebook, Skype and Windows Live Messenger Chat to communicate online while posing as Hunt Photography. 

The case was investigated by the USPIS, the Jones County Iowa Sheriff’s Office, the Massachusetts State Police, the Attleboro Police Department and the Justice Department’s High Technology Investigative Unit.  Substantial assistance was provided by the U.S. Attorney’s Office for the District of Iowa. 

The case is being prosecuted by Trial Attorney Herbrina Sanders of the Justice Department’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Stacy Dawson Belf of the District of Massachusetts.

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

A former employee of a U.S. contractor was indicted today in the Eastern District of Texas for allegedly soliciting and accepting bribes in exchange for his influence in awarding U.S. government-funded contracts in Afghanistan, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney John Malcolm Bales of the Eastern District of Texas.

George E. Green, 57, of Carrollton, Texas, was charged with conspiracy to structure financial transactions to avoid currency transaction reporting requirements, wire fraud and receipt of bribes in connection with a program receiving federal funds.

According to the indictment, Green was the former director of contracts, procurement and grants for International Relief and Development Inc. (IRD), and was part of a cooperative agreement between IRD and the U.S. Agency for International Development (USAID) that sought to promote long-term agricultural development in specific areas in Afghanistan. 

The indictment alleges that while working for IRD in Afghanistan, Green solicited and received bribes totaling $66,000 from a representative of an Afghan firm that contracted with IRD.  Some of those bribe payments were allegedly wired directly to an Italian automobile dealer for Green’s benefit.  After returning to Texas, Green allegedly attempted to conceal the bribe proceeds by engaging in a conspiracy to structure cash deposits into his bank and credit card accounts to avoid mandatory cash reporting requirements.  Additionally, even after leaving IRD, Green allegedly continued to solicit bribes from the Afghan firm by falsely claiming that he still had the ability to influence the contracting process. 

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

This case is being investigated by the Office of Special Inspector General for Afghanistan Reconstruction (SIGAR), FBI and USAID Office of Inspector General.  The case is being prosecuted by Trial Attorney Mark H. Dubester on detail to the Criminal Division’s Fraud Section from SIGAR and Assistant U.S. Attorney Kevin McClendon of the Eastern District of Texas. 

An Eritrean national, who is also a citizen of the United Kingdom, was sentenced today to three years in prison for smuggling up to 99 undocumented migrants from Eritrea and Ethiopia into the United States.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Ronald C. Machen Jr. of the District of Columbia, and Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Washington, D.C., Field Office made the announcement.  U.S. District Judge Reggie B. Walton of the District of Columbia imposed the sentence.

Habtom Merhay, 47, of the United Kingdom, pleaded guilty to human smuggling charges on Sept. 24, 2014.  He was originally arrested by Moroccan authorities in August 2013 and extradited to the United States on April 25, 2014.  He has been in custody since his arrest.

In his plea agreement, Merhay admitted that from May 2009 to September 2010, he operated a human smuggling scheme from his residence in Dubai.  In exchange for fees of up to $14,000, he smuggled undocumented African migrants into the United States by purchasing airline tickets for their travel to South and Central America, and then coordinating with a global network of smugglers to facilitate the migrants’ travel into the United States.

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

The investigation was led by HSI’s Washington, D.C., Field Office with the support of the Human Smuggling Trafficking Center and the U.S. Customs and Border Protection’s National Targeting Center.  The case was prosecuted by Trial Attorney Jay Bauer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Frederick Yette of the District of Columbia.  The extradition was handled by Trial Attorney Dan E. Stigall of the Criminal Division’s Office of International Affairs.

The Department of Justice and HSI expressed their appreciation for the significant assistance provided by the Moroccan Ministry of Justice.

            ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI) was invited to speak on December 6, 2014. at the University of Guam’s LW390 Class Production regarding Human Trafficking.  The LW390 class is the Human Trafficking Conference course that is taken alongside PA390, which is the Special Topics:  Human Trafficking class.  The conference class is meant give students an experience in presenting in a formal conference setting, as well as to display what they have learned in class.  The PA390 course teaches students about Human Trafficking.  There were approximately 100 students, professors, and government officers and officials in attendance at the forum.

            U.S. Attorney Limtiaco spoke on the topic of “Human Trafficking Red Flags” and  “Preventing Human Trafficking in the Pacific Region,” and shared information on the Pacific Regional Response to Combat Human Trafficking Initiative (the “Initiative”), which is a collaborative effort among the U.S. Attorney’s Office for the Districts of Guam and the NMI, the National District Attorneys Association, the Department of State, the Department of the Interior, the Guam Human Trafficking Task Force, the NMI Human Trafficking Intervention Coalition, and other community partners. U.S. Attorney Limtiaco also discussed the intersection and relationship between human trafficking, sexual assault, child abuse and domestic and family violence, and prevention and enforcement efforts in the Pacific region.

            The Initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement, prosecution, victim service providers, social services, medical, mental and public health professionals, faith based organizations, educational institutions, Consulates, and other community stakeholders.  The Initiative calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities.  The Initiatives also provides fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics to law enforcement, prosecution, victim service providers, social services, medical, mental and public health professionals, faith based organizations, educational institutions, Consulates, and other community stakeholders in our Pacific region island communities, which is critical to effective prevention and enforcement efforts in the region.

 

Front Row: Dr. John Rivera, Dean Annette Santos, Lt. Gov. Ray Tenorio, U.S. Attorney Limtiaco, Shirley Chu, Diana Reyes, Marlene Leon Guerrero, Natasha Taitague, and James Chin.  Back row:  Dr. Terry Donaldson, Dr. Ron McNinch, Dr. Ansito Walter and FBI SSRA Bill Corbett

 

   
U.S. Attorney Alicia Limtiaco addressing UOG Students and other attendees.

 

U.S. Attorney Alicia Limtiaco addressing UOG Students and other attendees.
 

 

 

 

The Justice Department’s Civil Rights Division issued non-discrimination principles today to guide federal, state and local governments’ response to the Ebola virus.  The division also issued guidance for protecting civil rights while responding to the Ebola virus and a reference guide on what legal protections may apply.

As the global response to the Ebola virus continues, it is important to remain vigilant in ensuring that the civil rights of all people are respected.  Both science and the law must lead our efforts to ensure that unfounded fear and/or prejudice do not limit access to housing, education, benefits, services, and employment on account of race, color, national origin, citizenship status, disability or any other protected status.  In addition, access to accurate health information is critical to providing all people with the ability to make informed decisions about whether or how the virus might affect them, their families and the community at large.

The non-discrimination principles are:

1. Ensure that there is no bullying, harassment or other unlawful discrimination directed at people who are or are perceived to be from an African country, of African descent or against people who have the Ebola virus or are perceived as having the virus.  As in all emergencies, the Ebola virus may affect people of different races, ethnicities, nationalities, immigration statuses and disability statuses.  Harassment and other forms of unlawful discrimination are not only illegal, but may discourage affected persons from coming forward to seek treatment or information.  In considering whether there is any significant risk of a person being infected with Ebola, it is essential to determine whether the individual has been in direct contact with the bodily fluids of someone who has exhibited Ebola symptoms within the past 21 days.  Policies that are overbroad or that are motivated by fear rather than facts may lead to unlawful discrimination.  The United States will vigorously enforce laws prohibiting discrimination and unlawful harassment.

2. Provide information in languages other than English.  Timely and accurate dissemination of public information is crucial for a successful response to any threat to public health.  Large numbers of people do not read or understand English.  Yet it is important for all members of the community to have access to pertinent public information, including information on how Ebola is contracted and the symptoms of Ebola.  Messages directed at the residents in states and localities should be provided in the languages spoken by people with limited English proficiency in those areas, and should be written as clearly as possible.  More information about ensuring language access can be found at www.lep.gov.  Multi-lingual brochures on language access rights can be found at http://www.lep.gov/dojbrochures.html.

3. Provide access to information and services to people with disabilities.  Many traditional notification methods are not accessible to or usable by people with disabilities.  For instance, individuals who are deaf or hard of hearing cannot hear radio, sirens or other aural alerts.  Individuals who are blind or have impaired vision cannot read standard printed materials.  Individuals with cognitive disabilities may not understand complex language.  Health care providers and other involved entities must reach out to individuals with disabilities in formats that are accessible to them.  For more information on access for individuals with disabilities, please see www.ADA.gov.

The Civil Rights Division of the U.S. Department of Justice, together with other agencies throughout the federal government, will continue to monitor all civil rights issues related to Ebola.  The division will continue to work with our federal agencies to ensure that civil rights protections are integrated into emergency planning and response efforts.

A Southern California physician was sentenced to 22 months in federal prison today for his role in a conspiracy to commit Medicare fraud.

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

Dr. Jason C. Ling, 43, of Spring Valley, California, pleaded guilty in June 2014, to conspiracy to commit health care fraud.  According to his plea agreement, between March and November 2010, Dr. Ling conspired with others to defraud the Medicare program by writing medically unnecessary prescriptions for expensive power wheelchairs and other durable medical equipment (DME).  Dr. Ling obtained patients for his Spring Valley medical clinic from a street-level recruiter, or “marketer,” who referred Medicare beneficiaries for medically unnecessary DME prescriptions.  Dr. Ling’s prescriptions were provided to owners of DME companies, including Eucharia Okeke, who used the fraudulent prescriptions to submit approximately $496,794 in false claims to Medicare. 

In addition to the prison term, U.S. District Judge George H. Wu of the Central District of California ordered Dr. Ling to pay $311,145 in restitution to the Medicare program.

Eucharia Okeke, pleaded guilty for her role in the conspiracy on Aug. 25, 2014.  Her sentencing hearing is scheduled for Feb. 26, 2015.

The case was investigated by the FBI and the Los Angeles Region of HHS-OIG.  The case was prosecuted by Trial Attorney Alexander F. Porter of the Criminal Division’s Fraud Section. 

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Tax Return Preparers Allegedly Claimed False Deductions and Credits on Tax Returns

The Justice Department announced today that it has asked a federal court in California to permanently bar Vida Farley and AJV Bookkeeping Inc. from preparing tax returns for others. 

According to the complaint, the government alleges that, for the past several years, the defendants engaged in a pattern of claiming false education credits and false or grossly inflated Schedule A deductions for charitable contributions, unreimbursed employee business expenses and other expenses on behalf of their customers.

According to the suit, which was filed in the U.S. District Court for the Eastern District of California, Farley has been a tax return preparer for more than 20 years and since 2008, has operated a tax return preparation business through AJV Bookkeeping Inc.  The defendants’ practices of claiming false deductions and education credits have resulted in significant lost tax revenues as they understate tax liabilities and claim improper refunds, according to the suit.

Specifically, the suit alleges that the Internal Revenue Service (IRS) examined more than 200 returns the defendants prepared between 2010 and 2014, and that more than 96 percent of these returns have resulted in adjustments to tax, with the proposed deficiencies averaging roughly $4,000 per return.  The complaint alleges that the defendants prepared more than 17,000 returns between 2010 and 2014.

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 federal jury today returned guilty verdicts against four defendants charged in a loan sharking and illegal gambling ring that was run out of several Philadelphia businesses, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.

Ylli Gjeli, 49, Fatimir Mustafaraj, aka “Tony,” 42, Gezim Asllani, aka “Sam,” 35, Rezart Rahmi Telushi, aka “Luigi,” 41, all of Philadelphia, were found guilty following a six-week jury trial of engaging in a racketeering conspiracy, racketeering collection of unlawful debts, making extortionate extensions of credit, collections of extensions of credit by extortionate means.  Additionally, Gjeli, Mustafaraj and Aslanni were convicted of counts involving extortionate extension of credit.  Finally, Gjeli and Mustafaraj were convicted of illegal gambling. U.S. District Judge William H. Yohn Jr. scheduled sentencing hearings for March 2015.

According to evidence presented at trial, the defendants’ enterprise used businesses in Philadelphia, including the Lion Bar & Grill, Blackbird Café and “Ylli’s 2 Brothers,” to conduct the illegal loan sharking and gambling activities.  The enterprise generated money by making and collecting on loans with usurious rates of interest, and making loans to customers whose debts were incurred through the enterprise’s illegal gambling business.  The evidence established that from October 2011 to 2013 alone, the enterprise extended 125 usurious loans totaling $1.78 million with annual interest rates ranging from 104 percent to 395 percent.  Further, the evidence established that from February 2007 to August 2013, the organization’s online sports betting website contributed more than $2.9 million in gross profits.  

Members and associates of the enterprise cultivated their reputations within the organization by threatening customers with dangerous weapons such as firearms and a hatchet, and threating to kill, assault or “break the legs” of delinquent customers if they did not pay their debts, and also by physically assaulting subordinate members and associates who stole from the organization.

The evidence at trial demonstrated that Gjeli was a “boss” of the organization, Mustafaraj served as “muscle” to forcefully collect debts owed to the organization, and Asllani and Telushi served as “collectors,” both making loans and collecting the weekly payments from customers.  Gjeli and Mustafaraj directed the other members in the loan sharking activities and illegal gambling business, financed loans and the gambling operation, used intimidation and threats of violence against customers to collect loan payments, and physically assaulted subordinate members and associates who stole from the organization.  Asllani and Telushi assisted Gjeli and Mustafaraj in making loans, and regularly collected weekly loan payments from customers.    

The evidence also demonstrated that the defendants attempted to conceal the existence and operations of the enterprise from law enforcement by limiting their discussions of criminal activities when on the phone, using cryptic and coded language to describe criminal activities, conducting pat-downs and body searches of customers to check for weapons and recording devices, and conducting the enterprise’s transactions primarily in cash.  

The case was investigated by the FBI, Pennsylvania State Police, New Jersey State Police, Montgomery County Detectives, and the Internal Revenue Service-Criminal Investigation.  It is being prosecuted by Trial Attorney Margaret Vierbuchen of the Justice Department’s Organized Crime and Gang Section and Assistant U.S. Attorney Salvatore L. Astolfi of the Eastern District of Pennsylvania.

A former university professor was sentenced today to five years in prison for traveling in foreign commerce to engage in sexual conduct with a minor, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.

Walter Lee Williams, 66, of Palm Springs, California, was charged with engaging in sexual conduct with minors in the Philippines, and arrested in Mexico in 2013 after being placed on the FBI’s “Ten Most Wanted Fugitives” list.  In connection with his guilty plea, Williams admitted that he traveled from Los Angeles to the Philippines to engage in sex acts with minor boys.  Prior to his travel, Williams engaged in sexual activity via Internet webcam sessions with minors and expressed a desire to visit them in the Philippines to have sex.  

In addition to the prison sentence, U.S. District Judge Philip S. Gutierrez of the Central District of California sentenced Williams to ten years of supervised release, and ordered him to pay $25,000 in restitution and to register as a sex offender for life.

The case was investigated by the FBI’s Los Angeles Field Office, and prosecuted by Trial Attorneys Ravi Sinha and Herbrina Sanders from the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).

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

A former Special Agent in Charge of the Department of Homeland Security - Office of Inspector General (DHS-OIG) was sentenced to 37 months in prison today for a scheme to falsify records and obstruct an internal DHS-OIG inspection, announced 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 Field Office.  The sentence was imposed by U.S. District Judge Andrew S. Hanen of the Southern District of Texas.

“While leading an office responsible for investigating misconduct at other government agencies, Pedraza sought to impede and obstruct the investigation of his own office,” said Assistant Attorney General Caldwell.  “Pedraza’s criminal conduct resulted in the premature closing of criminal cases without resolution, potentially endangering our national security and allowing others to escape justice.  We will root out and prosecute corruption wherever it may be found, including within the ranks of federal law enforcement.”

Former DHS-OIG Special-Agent-in-Charge Eugenio Pedraza, 50, of McAllen, Texas, was found guilty following a four-day jury trial on March 14, 2014, of conspiring with three other special agents to falsify criminal investigative reports to impede an internal DHS-OIG inspection and obstruct the underlying criminal investigations.  The jury also found Pedraza guilty of five counts of falsifying records.

DHS-OIG is responsible for investigating alleged criminal activity by DHS employees, including corruption by Customs and Border Protection (CBP) and Immigration and Customs Enforcement personnel affecting the integrity of the U.S. borders.  Pedraza headed DHS-OIG’s McAllen Field Office (MCA) from January 2009 to January 2012.

According to evidence presented at trial, in September 2011, DHS-OIG conducted an internal inspection of the MCA to evaluate whether the agency’s investigative standards and policies were being followed.  In anticipation of the internal inspection, Pedraza and at least three other DHS-OIG agents, including Special Agent Wayne Ball, engaged in a scheme to falsify investigative documents to make it appear that criminal investigations were being conducted in a timely fashion and in accordance with DHS-OIG standard operating procedures.  The scheme’s purpose was to conceal severe lapses in DHS-OIG’s investigative standards and policies at the MCA and Pedraza’s failure to properly supervise agents and investigations.  Court documents reflect that Pedraza, Ball, and other special agents wrote and signed false criminal investigative reports.  Pedraza then approved the reports for inclusion in the official investigative case files.

For example, the evidence at trial showed that, at Pedraza’s direction, a special agent drafted false memoranda of activity (MOAs) to fill gaps of inactivity in a criminal investigation to which he was assigned.  The criminal investigation had been initiated in March 2010 and concerned allegations that a CBP officer was assisting the unlawful smuggling of undocumented aliens and narcotics into the United States.   Because the MOAs were intended to describe investigative activities that occurred when the drafting agent was either not present at the MCA or not employed by DHS-OIG at all, Pedraza directed the agent to attribute the investigative activity to Ball.  Ball then signed and backdated the false MOAs.  Pedraza also signed and backdated the false MOAs, which were then placed in the investigation’s case file in advance of the internal inspection.  Upon discovery of the falsified reports, the criminal investigation had to be closed without resolution.  According to evidence presented at trial, Pedraza similarly directed other special agents to falsify records related to at least four other criminal investigations.

On Jan. 17, 2013, Ball pleaded guilty to one count of conspiring with Pedraza and at least two other special agents to falsify records in federal investigations and obstruct an agency proceeding.  Ball is scheduled to be sentenced on Jan. 7, 2015, by U.S. District Judge Hilda G. Tagle of the Southern District of Texas. 

This case was investigated by the FBI’s San Antonio Field Office and is being prosecuted by Trial Attorneys Eric Gibson, Brian Kidd and J.P. Cooney of the Criminal Division’s Public Integrity Section. 

Alaska and Virginia-based technology contractors Eyak Technology LLC (EyakTek) and Eyak Services LLC (ESL) have agreed to pay $2.5 million and relinquish any rights to additional payments from the United States to resolve allegations that they submitted false claims to the U.S. Army Corps of Engineers, the Justice Department announced today.  EyakTek and its sister company, ESL, provide healthcare, information technology, communications and infrastructure services to the U.S. government.  Both are subsidiaries of The Eyak Corporation, headquartered in Anchorage, Alaska.

“Federal government contractors and their employees must adhere to high standards in their dealings with the government,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “We will vigorously pursue those who pay kickbacks or otherwise engage in conduct that undermines the integrity of the contracting process.”

From 2005 to 2011, EyakTek held a $1 billion prime contract with the U.S. Army Corps of Engineers known as the Technology for Infrastructure, Geospatial, and Environmental Requirements contract. 

The government alleged that, between Sept. 12, 2007, and Oct. 4, 2011, EyakTek’s then-director of contracts, Harold Babb, accepted kickbacks from several subcontractors of EyakTek and ESL in return for using his position to direct subcontracts to them.  EyakTek and ESL allegedly submitted invoices to the Army Corps that included charges for work that was never performed by the subcontractors and lacked internal controls to detect the improper charges. 

In March 2012, Babb pleaded guilty to bribery and kickback charges.  The U.S. District Court for the District of Columbia sentenced him to serve 87 months in prison, to be followed by 36 months of supervised release and more than $9 million in restitution for his role in the kickback scheme.

The Army Corps stopped payments to EyakTek and ESL when the alleged scheme came to light.  As part of the settlement, EyakTek and ESL will withdraw any appeals seeking the return of those funds, and relinquish all rights to any payments that have been withheld.

“This settlement demonstrates our willingness to use every tool of civil and criminal law in our arsenal to defend the American taxpayer from corruption in contracting,” said U.S. Attorney Ronald C. Machen Jr. for the District of Columbia.  “The criminal investigation into this wide-ranging bribery and kickback scheme has now resulted in the convictions of 20 individuals, including EyakTek’s former contracts director.  We have aggressively pursued asset forfeitures in the criminal proceedings to make the taxpayer whole and to deprive wrongdoers of their ill-gotten gains.  This civil settlement sends a message to contractors who try to cheat in the competition for government funds.”

“This is yet another prime example of our commitment, along with other fellow law enforcement agencies to hold people and companies accountable for each and every detail of their contracts with the U.S. government and the U.S. Army,” said Director Frank Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit.  “Our agents will continue to aggressively investigate and identify any potential abuses that arise in regard to the contracting process.”

“Manipulations of the Department of Defense procurement process will not be tolerated,” said Special Agent in Charge Robert Craig for the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office.  “Today’s settlement demonstrates the commitment by DCIS and its partner agencies to hold accountable companies who attempt to bypass federal contracting laws.”

Today’s settlement is the result of a coordinated effort among the department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, the U.S. Army Corps of Engineers, DCIS, the Defense Contract Audit Agency, the Army’s Major Procurement Fraud Unit and the Small Business Administration.

The claims settled by this agreement are allegations only, and there has been no determination of liability.

The Justice Department announced today that Shelbie Brooke Richards, 21, and Sarah Adelia Graves, 21, from Brandon, Mississippi, pleaded guilty in U.S. District Court in Jackson to federal hate crime charges in connection with a series of racially-motivated assaults on African-Americans, which culminated in the death of James Craig Anderson, an African-American man, in the summer of 2011.

Richards and Graves each pleaded guilty to one count of conspiracy to violate the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act for their roles in a scheme to target African-Americans in Jackson for violent assaults with dangerous weapons, including their roles in the murder of Anderson, who was run over by a FordF250 truck driven by members of the conspiracy.  The maximum penalty for this charge is five years in prison and a $250,000 fine.  Richards pleaded guilty to an additional count of misprision of a felony for her role in concealing information about the murder of Anderson from investigating authorities.  The maximum penalty for this charge is 3 years in prison and a $250,000 fine.

“The continuing investigation into the events surrounding the vicious murder of James Craig Anderson that resulted in today’s guilty pleas demonstrates that the Department of Justice will vigorously pursue justice for every victim of racially-motivated violence,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “No person should have to fear that they will be attacked because of the color of their skin as they walk the streets of their own city.  We will continue to use the tools at our disposal to ensure that racial equality in America is a reality as well as an ideal.”

“Hate based crimes have no place in America,” said U.S. Attorney Gregory K. Davis for the Southern District of Mississippi.  “In addition to the injury to the victim, these crimes damage the fabric of our society.  The citizens of this district should know that this office will continue to vigorously enforce federal laws that guarantee the civil rights of all citizens.” 

“This investigation started with the tragic death of James Anderson, “said Special Agent in Charge Donald Alway of the FBI Mississippi Division.  “Since then, the FBI has continued its efforts to identify and bring to justice all those individuals who conspired to deprive Mr. Anderson and other African-American citizens of their civil rights simply because of the color of their skin.”

Today in court, Richards and Graves admitted that, beginning in the spring of 2011, they and others conspired with one another to harass and assault African-Americans in west Jackson.  On numerous occasions, the co-conspirators used dangerous weapons including beer bottles, sling shots and motor vehicles to cause and attempt to cause bodily injury to African-Americans.  They would specifically target African-Americans they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault.  The co-conspirators would often boast about these racially motivated assaults.  Richards and Graves admitted that on June 26, 2011, they encouraged their co-conspirators to leave Brandon with them to assault “niggers,” in Jackson.  Richards further admitted that she encouraged her co-conspirator Deryl Paul Dedmon to hit Anderson with his truck.  In addition, Richards admitted that she falsely told law enforcement officers that she did not remember a fight between Dedmon and Anderson, and that she did not encourage Dedmon to strike Anderson with his truck.

Defendants Deryl Paul Dedmon, John Aaron Rice, Dylan Wade Butler, William Kirk Montgomery, Jonathan Kyle Gaskamp, and Joseph Dominick, all from Brandon, have previously entered guilty pleas in connection with their roles in these offenses.

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

Two Additional Colombian Nationals Also Plead Guilty For Their Roles

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

Attorney General Eric H. Holder, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, DEA Administrator Michele M. Leonhart and Bill A. Miller, Director, U.S. State Department’s Diplomatic Security Service made the announcement.

“Throughout his law enforcement career, Special Agent Watson’s service was both selfless and courageous,” said Attorney General Holder.  “With this action, we continue our work to hold accountable those who were responsible for his murder.  In the weeks ahead, we expect to take additional steps to bring the perpetrators to justice.  And in all that we do, our nation’s Department of Justice will continue to honor Special Agent Watson’s sacrifice, to safeguard the nation he served, and to protect the values and principles he defended all his life.”

“Terry Watson was a courageous and accomplished DEA Special Agent who we will forever honor and remember for his dedicated career and sacrifice,” said DEA Administrator Leonhart.  “DEA is grateful that those who carried out this reprehensible and senseless act are now facing U.S. justice.  We will honor his life and career by continuing our global crusade with our domestic and international partners to defeat violent drug trafficking networks.”

Héctor Leonardo López, 34, Julio Estiven Gracia Ramírez, 32, and Andrés Álvaro Oviedo García, 22, previously pleaded guilty to conspiracy to kidnap and aiding and abetting the murder of an internationally protected person.  Today, U.S. District Judge Gerald Bruce Lee of the Eastern District of Virginia sentenced López to 25 years, Gracia Ramírez to 27 years, and Oviedo García to 20 years.

In addition, Wilson Daniel Peralta-Bocachica, 31, pleaded guilty today to obstruction of justice and Edwin Gerardo Figueroa Sepúlveda, 39, pleaded guilty on Dec. 9, 2014, to conspiracy to kidnap and aiding and abetting the murder of an internationally protected person.  Sentencing hearings for Peralta-Bocachica and Figueroa Sepúlveda are scheduled for Feb. 18, 2015. 

In the statements of facts filed with their plea agreements, López, Gracia Ramírez, Oviedo García, and Figueroa Sepúlveda admitted that they conspired to conduct “paseo milionarios” or “millionaire’s rides” in which victims were lured into taxi cabs, kidnapped and then robbed.  They admitted that on the evening of June 20, 2013, they were part of a robbery crew that targeted Special Agent Watson.  Gracia Ramírez picked up Special Agent Watson in his taxi, while López drove a second taxi carrying the assailants.  Figueroa Sepúlveda entered the taxi carrying Special Agent Watson and shocked him with a stun gun while another defendant stabbed him.  Special Agent Watson was able to escape from the taxi, but he later collapsed and died from his injuries.  Oviedo García was part of the robbery crew, but shortly before Special Agent Watson was targeted, a third taxi encountered mechanical issues and Oviedo García stayed with the disabled taxi.  Peralta-Bocachica admitted that in the days following the kidnapping and murder, he washed the taxi in which Special Agent Watson was stabbed, removing blood from the back seat then discarding the cleaning rags, before turning the taxi over to the Colombian National Police.  

Two other defendants, Omar Fabián Valdes Gualtero, 27, and Édgar Javier Bello Murillo, 27, are charged with second degree murder, kidnapping and conspiracy to kidnap in connection with their alleged involvement in the murder.  Trial is set for Jan. 12, 2015.  The charges in the indictment against these defendants are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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

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

Today the Department of Justice, in coordination with the Office of the Director of National Intelligence and other elements of the Intelligence Community, is releasing six Foreign Intelligence Surveillance Court (“FISC”) documents related to surveillance activities originally authorized by President George W. Bush shortly after the attacks of Sept. 11, 2001.

On Dec. 21, 2013, the DNI declassified the existence of collection activities authorized by President Bush.  As described in the statement issued at that time, starting on Oct. 4, 2001, President Bush authorized the Secretary of Defense to employ the capabilities of the Department of Defense, including the National Security Agency, to collect foreign intelligence by electronic surveillance in order to detect and prevent acts of terrorism within the United States. 

The collection of communications content under what has come to be known as the Terrorist Surveillance Program (“TSP”) and presidential authorization ended in January 2007 when the U.S. Government transitioned the program to FISA authority under orders of the FISC.  The documents released today concern the transition of the TSP from presidential authority to FISC orders between January 2007 and August 2007 and include the FISC’s opinions authorizing this collection under Title 1 of FISA. 

In August 2007, Congress enacted the Protect America Act (“PAA”) and the collection of communications of non-U.S. persons reasonably believed to be located outside of the United States for foreign intelligence information was transitioned to that authority.   In 2008, the Foreign Intelligence Surveillance Court of Review upheld the constitutionality of the Government’s collection program under the PAA.  As explained in the IContheRecord post on the PAA, the PAA expired in February 2008 and was replaced by the Foreign Intelligence Surveillance Act (“FISA”) Amendments Act of 2008 (“FAA”), which remains in effect.  Today, Section 702 of the FAA authorizes, under FISC oversight, the targeting of non-U.S. persons reasonably believed to be located outside the United States to acquire foreign intelligence information. 

Although no longer in effect, the documents disclosed today show the history of the government’s post-Sept. 11, 2001, collection of communications content for foreign intelligence purposes.  The documents make clear the FISC’s independent and searching review of government applications and, together with Congress’ passage of the PAA and FAA, demonstrate the role of the judicial and legislative branches in regulating executive branch surveillance activities.

Memorandum of Law December 13, 2006
Supplemental Memorandum of Law and Declaration January 2, 2007
FISC Order January 10, 2007
FISC Order (Foreign Order) January 10, 2007
FISC Order and Memorandum Opinion April 3, 2007
FISC Order April 5, 2007

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Defendant KENNETH HUIDONG KANG, age 39, was sentenced on December 11, 2014, by Chief Judge Frances Tydingco-Gatewood, in the District Court of Guam for Harboring Illegal Aliens and Criminal Conspiracy.   Defendant KANG was sentenced to six months imprisonment and two years supervised release, to include six months home detention under the location monitoring program.   Defendant KANG was also ordered to pay a $3,000 fine.

During the period from or about January 2006 and lasting until December 2008, Defendant KANG worked at Club Musha, later renamed to Club Music.  KANG worked at the establishment as a manager where he conspired with others to conceal Korean women who had entered Guam as tourists under the Guam Visa Waiver Program.  The Guam Visa Waiver Program allowed Korean citizens to enter Guam as tourists for a limited time of 15 days.  The real purpose for these Korean women to enter Guam was for them to work at Club Music. Defendant KANG further allowed some of these Korean women to reside at his Yigo residence while they illegally worked at Club Music and he did so for the purpose of commercial advantage and private financial gain.

This case was investigated by Special Agents of the Department of Homeland Security/Homeland Security Investigations, and prosecuted by former Assistant U.S. Attorney Karon V. Johnson and Assistant U.S. Attorney Stephen F. Leon Guerrero.

Former Anderson, California, police officer Bryan Robert Benson, 30, of Shasta Lake, was sentenced today in federal court to five years in prison and 3 years of supervised release for violating the civil rights of a woman he arrested by sexually assaulting her while she was in his custody, announced the Justice Department and the U.S. Attorney’s Office for the Eastern District of California.

The federal indictment charged Benson with deprivation of rights under color of law in connection with the sexual assault of a woman he had placed under arrest on May 29, 2010.  According to court documents, while Benson was transporting the victim to jail, he stopped in a parking lot and sexually assaulted her.  Benson instructed the victim not to report it, and in order to impede any investigation, he reported to a police dispatcher that he and the victim had arrived at the Shasta County jail approximately eight minutes before they actually arrived.  Benson was fired from his position with the Anderson Police Department as a result of this conduct.

“This defendant used his position as a police officer to prey on the vulnerable,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “He not only violated the victim, but also his oath to serve and protect, and the trust the community put in him.  The Justice Department will continue to vigorously prosecute those who abuse their position and authority to harm those whom they have sworn to protect.”

“Police officers are sworn to protect and to serve the citizens of their community,” said U.S. Attorney Benjamin B. Wagner for the Eastern District of California.  “Sexually assaulting a citizen in police custody is the worst betrayal of that duty.  Officer Benson not only violated the trust of his community, he let down his fellow officers of the Anderson Police Department who work diligently every day to earn that trust.”

This case was investigated by the Federal Bureau of Investigation and was prosecuted by Trial Attorney Chiraag Bains from the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Matthew G. Morris for the Eastern District of California.

A former Alabama hospital employee was sentenced to serve 24 months in prison today before the Honorable Judge Myron H. Thompson in U.S. District Court for the Middle District of Alabama in connection with his role in committing stolen identity tax refund fraud, announced Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.

Kamarian D. Millender was also ordered to pay $18,915 in restitution.

On July 8, 2014, Millender pled guilty to one count of aggravated identity theft.  According to court documents, Millender worked as a lab technician at a medical facility in the Dothan, Alabama, area.  He and others stole patient medical records that contained personal identification information, which Millender then used to file false tax returns in order to obtain fraudulent tax refunds from the Internal Revenue Service (IRS).   

Millender’s actions aided in the filing of more than 100 false federal tax returns, which victimized approximately 73 individuals and attempted to defraud an estimated $536,028 from the IRS.  The IRS was able to stop the vast majority of the falsely claimed refunds, but approximately $18,915 in refunds were issued.

This case was investigated by special agents of IRS-Criminal Investigation and inspectors from the U.S. Postal Inspection Service.  Trial Attorneys Charles M. Edgar Jr. and Michael Boteler of the Tax Division are prosecuting the case.

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

A citizen and resident of Costa Rica was sentenced today to 30 months in prison for her leadership role in a conspiracy to smuggle undocumented migrants to the United States. 

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, and Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE- HSI) Washington, D.C., Field Office made the announcement.  U.S. District Judge Ursula M. Ungaro of the Southern District of Florida imposed the sentence. 

Mercedes Morera Roche, 49, of Costa Rica, was extradited to the United States from Panama on Aug. 21, 2014, to face human smuggling charges.  Roche pleaded guilty on Oct. 6, 2014, to conspiracy to smuggle more than 25 undocumented migrants from Cuba to the United States.  

According to her plea agreement, Roche admitted that between 2004 and 2011, she was an organizer of a human smuggling network that provided instructions, fraudulent identity and travel documents, escorts, transport, safe house locations, and other assistance to facilitate the illicit travel of undocumented migrants to the United States.  Roche admitted that in some cases, she provided fraudulent passports so that undocumented migrants could fly to the United States with the help of corrupt foreign airline and immigration officials.  Roche directed the migrants to destroy the fraudulent documents during the flights to the United States, and instructed the migrants about what to do and say to U.S. immigration authorities upon landing.  In other cases, Roche coordinated the smuggling of undocumented migrants over land routes through Latin America and Mexico into the United States.  Roche solicited payments of up to $10,000 for each undocumented migrant. 

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

The investigation was conducted by ICE- HSI’s Washington, D.C. Field Office with support from the Human Smuggling Trafficking Center and U.S. Customs and Border Protection’s National Targeting Center.  Critical assistance was also provided by HSI’s Miami Field Office and the ICE Attaché Office in Panama.  Extradition assistance was provided by the Criminal Division’s Office of International Affairs, INTERPOL Washington and the United States Marshals Service.  The Justice Department is grateful for the significant assistance provided by the Panamanian Ministry of Foreign Affairs.  This case was prosecuted by Trial Attorney Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Robert Emery of the Southern District of Florida.

The former chief technology officer of Liberty Reserve was sentenced today to serve five years in prison for conspiring to operate an unlicensed money transmitting business that processed more than $16 billion through Liberty Reserve’s digital currency system.  The Court found that Marmilev understood the illegal nature of Liberty Reserve’s business and that he knew that a wide array of criminal enterprises used Liberty Reserve to further their criminal activity.

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

“Marmilev used his technical expertise to create a virtual currency business that was used extensively by criminals throughout the world,” said Assistant Attorney General Caldwell.  “Marmilev boasted that the crime group was beyond the reach of U.S. law enforcement, but he couldn’t have been more wrong.  Today’s prison sentence shows that those who hide their illegal activities on-line and off-shore will be caught and sent to prison.”

“Mark Marmilev spent years designing and maintaining the technological architecture that allowed Liberty Reserve to operate a global payment processor and money transfer system that catered to criminals,” said Manhattan U.S. Attorney Preet Bharara.  “Now, he will pay for that crime with five years in federal prison.”

Mark Marmilev, 35, of Brooklyn, New York, pleaded guilty on Sept. 11, 2014, for his role in designing and maintaining the technological infrastructure for Liberty Reserve, a company that operated one of the world’s most widely used digital currency services.  In addition to the prison sentence, U.S. District Judge Denise L. Cote also ordered Marmilev to pay a $250,000 fine.

According to allegations contained in the indictment, and statements made in other court documents filed in Manhattan federal court and related court proceedings:

Liberty Reserve was incorporated in Costa Rica in 2006 and billed itself as the Internet’s “largest payment processor and money transfer system.”  Liberty Reserve was created, structured, and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes.  It emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store, and launder the proceeds of their illegal activity because it provided an infrastructure that enabled cybercriminals to conduct anonymous and untraceable financial transactions. 

Before being shut down by the U.S. government in May 2013, Liberty Reserve had more than five million user accounts worldwide, including more than 600,000 accounts associated with users in the United States, and processed tens of millions of transactions through its system, totaling more than $16 billion in funds.  These funds encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking, and other crimes. 

According to court documents, Marmilev was a longtime associate of Liberty Reserve founder Arthur Budovsky, and he served as Liberty Reserve’s chief technology officer.  In that role, Marmilev was principally responsible for designing and maintaining Liberty Reserve’s technological infrastructure.  Marmilev also promoted Liberty Reserve to criminals on the Internet, where, using aliases, he touted Liberty Reserve’s lack of anti-money laundering policies and its tolerance for “shady businesses.”

In conjunction with the sentencing, a civil forfeiture complaint was filed today seeking the forfeiture of Gourmet Boutique, a retail grocery business located in Brooklyn, New York, and the forfeiture of Marmilev’s interest in Grimaldi’s, a pizzeria located in the Coney Island area of Brooklyn, New York; according to the complaint, Marmilev purchased these business interests using more than $1.6 million in Liberty Reserve proceeds.

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

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

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

A Romanian man was sentenced today to serve 63 months in prison for his role in receiving and sending overseas approximately $690,000 in proceeds from an international fraud scheme involving online marketplace websites, as well as for the use of a fraudulent passport.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney David Rivera of the Middle District of Tennessee and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida made the announcement.  U.S. District Judge Darrin P. Gayles of the Southern District of Florida imposed the sentence.

Razvan Caprarescu, 39, originally of Bucharest, Romania, was indicted in the Middle District of Tennessee in March 2014 for conspiracy to commit bank and wire fraud in connection with his participation in the online marketplace scheme.  In June 2014, the case was transferred to the Southern District of Florida, where Caprarescu had already been indicted in March 2013 for use and attempted use of a false, forged, and counterfeit Belgian passport.  Caprarescu pleaded guilty to both charges in August 2014.  In addition to his prison term, Caprarescu was ordered to pay $658,441 in restitution.

In connection with his guilty plea, Caprarescu admitted that his co-conspirators fraudulently listed vehicles for sale at online marketplaces such as eBay.  When victims expressed interest in purchasing the vehicles, the co-conspirators responded with emails directing the victims to wire payments to specified bank accounts.  These bank accounts were opened by Caprarescu and another co-conspirator using false identities and fraudulent documents, including counterfeit passports.  Eighteen victims sent approximately $367,036 to accounts opened by Caprarescu between October 2011 and June 2012.  Another 17 victims sent approximately $321,389 to accounts opened by Caprarescu’s co-conspirator.  Caprarescu and his co-conspirator subsequently sent the bulk of the money to co-conspirators located overseas.  Caprarescu also admitted that he used a false Belgian passport bearing an alias to rent a mailbox at a U.S. Pak-n-Ship store located in Broward County, Florida. 

The cases were investigated by Immigration and Customs Enforcement’s Homeland Security Investigations, the FBI, and the Tennessee Bureau of Investigation.  The cases were prosecuted by Senior Counsel Mysti Degani of the Criminal Division’s Computer Crime and Intellectual Property Section, Assistant U.S. Attorney Byron M. Jones of the Middle District of Tennessee and Assistant U.S. Attorney Alicia Shick of the Southern District of Florida.

The United States Justice Department’s Civil Rights Division and U.S. Attorney Patrick Miles Jr. announced today that a settlement has been reached with Equity Transportation Inc. (ETC) resolving claims that ETC violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), by failing to reemploy U.S. Army National Guard Member Johnathan Dunn following his military deployment.

According to documents filed today in the United States District Court for the Western District of Michigan, Dunn is a Sergeant in the United States Army National Guard serving with the 230th Sustainment Brigade DET1 out of Smyrna, Tennessee.  In August 2012, Dunn notified his employer, ETC, that he was going to be deployed for one month of active-duty military service in September 2012 with the Army National Guard’s Counter-Drug Taskforce.  The department alleges that Dunn served his active-duty and was released honorably after four weeks.  Upon his release from active-duty on Sept. 27, 2012, Dunn notified ETC that he was ready to return to work immediately.  Instead of promptly re-employing Dunn, ETC advised him that his employment had been terminated while he was on leave because of too many absences from work.  The department alleges that not only did ETC fail to reemploy Dunn upon his return from military leave, but that the employer has also failed to reemploy him since that time.  Under the terms of the settlement, filed as a consent decree, ETC has agreed to pay $11,000 as back pay and liquidated damages to Dunn.

USERRA protects the rights of uniformed servicemembers to retain their civilian employment following absences due to military service obligations, and provides that servicemembers shall not be discriminated against because of their military obligations.

“The men and women who wear our nation’s uniform need to know that they will be protected from the types of injustices experienced by Mr. Dunn when they return from military service,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “The Department of Justice, through its enforcement of USERRA, strongly supports the rights of service members in reclaiming their rightful positions in the workforce after they complete their military service to our country.”

“Members of the United States Army National Guard are often called to make many sacrifices, including spending months or years away from their jobs and families,” said U.S. Attorney Miles.  “When they are deployed in the service of our country, their employment rights must be protected.  Our office and the entire Department of Justice are committed to ensuring that individuals do not lose their rights while they are protecting ours.”

This case stems from a referral by the U.S. Department of Labor (DOL), pursuant to an investigation by the DOL’s Veterans’ Employment and Training Service.  The case is being handled by the Employment Litigation Section of the Department of Justice Civil Rights Division and the U.S. Attorney’s Office for the Western District of Michigan, who work collaboratively with the DOL to protect the jobs and benefits of National Guard and Reserve servicemembers upon their return to civilian life.

The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.