District Not Recorded

The former chief operating officer of a Miami-area hospital pleaded guilty today for his role in a mental health care fraud scheme that resulted in the submission of more than $67 million in fraudulent claims to Medicare by a state-licensed psychiatric hospital located in Hollywood, Florida, that purported to offer both inpatient and outpatient mental health services. 

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

Christopher Gabel, 61, of Davie, Florida, the former Chief Operating Officer (COO) of Hollywood Pavilion LLC (HP), pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and pay and receive health care kickbacks.  Gabel was charged in an indictment returned on May 8, 2014. 

According to Gabel’s admissions in connection with his guilty plea, between April 2003 and September 2012, HP submitted false and fraudulent claims to Medicare for treatment that was not medically necessary or not provided to patients.  As COO during that time, Gabel supervised HP’s staff at both its inpatient and outpatient facilities, where Medicare beneficiaries were admitted to HP regardless of whether they qualified for mental health treatment, and were often admitted before seeing a doctor. 

Gabel admitted that HP obtained Medicare beneficiaries from across the country by paying bribes and kickbacks to various patient brokers.  Gabel instructed the patient brokers to falsify invoices and marketing reports in an effort to hide, and cover up the true nature of the bribes and kickbacks they were receiving from HP.  From 2003 through August 2012, HP billed Medicare approximately $67 million for services that were not properly rendered, for patients that did not qualify for the services being billed, and for claims for patients who were procured through bribes and kickbacks.  Medicare reimbursed HP nearly $40 million for those claims.

Karen Kallen-Zury, Daisy Miller, Michele Petrie and Christian Coloma were convicted at trial in June 2013 for their roles in this scheme.  Kallen-Zury, HP’s former chief executive officer, was sentenced to 25 years in prison.  Miller, the clinical director of HP’s inpatient facility, was sentenced to 15 years in prison; and Petrie, the head of HP’s intensive outpatient program, was sentenced to six years in prison.  Coloma, the director of physical therapy for an entity associated with HP, was sentenced to 12 years in prison.  Kallen-Zury, Miller and Petrie were ordered to pay nearly $40 million in restitution, and Coloma was ordered to pay more than $20 million in restitution.

The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  The case is being prosecuted by Trial Attorneys Nicholas E. Surmacz, Andrew H. Warren and L. Rush Atkinson of the Criminal Division’s Fraud Section.

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

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

The Advisory Committee of the Attorney General’s Task Force on American Indian and Alaska Native Children Exposed to Violence released policy recommendations to the Justice Department today.

The report recommends a significant rebuilding of the current services provided to Indian Country, through increased partnering and coordination with tribes, and increased funding for programs to support American Indian and Alaska Native children.  Each of the five chapters discusses the Advisory Committee’s findings and recommendations.  The report provides the Advisory Committee’s vision for the development of effective, trauma informed, and culturally appropriate programs and services to protect American Indian and Alaska Native children exposed to violence.

“American Indian and Alaska Native children represent the future, and they face unprecedented challenges, including an unacceptable level of exposure to violence, which we know can have lasting and traumatic effects on body and mind,” said Attorney General Eric Holder.  “We must understand these impacts well so we can pursue policies that bring meaningful change.  That’s why I am deeply grateful for the work of this advisory committee and the continuing mission of this task force.”

Attorney General Eric Holder created the task force in 2013.  It is composed of a federal working group that includes U.S. Attorneys and officials from the Interior and Justice Departments and a federal advisory committee of experts on American Indian studies, child health and trauma, victim services and child welfare.  Former U.S. Sen. Byron Dorgan and Iroquois composer, singer and child advocate Joanne Shenandoah co-chaired the 13-member committee.

These recommendations are a culmination of the research and information gathered through four public hearings held between December 2013 and June 2014 in Bismarck, North Dakota; Scottsdale, Arizona; Fort Lauderdale, Florida; and Anchorage, Alaska, and five listening sessions in Arizona, Minneapolis and Alaska where over 600 people participated from over 62 Tribes and 15 States from across the nation.  More than 70 experts and 60 community members testified at the hearings, addressing domestic and community violence in Indian Country; the pathway from victimization to the juvenile justice system; the roles of juvenile courts, detention facilities and the child welfare system; gang violence; and child sex trafficking.

The Task Force on American Indian and Alaska Native Children Exposed to Violence is part of the Attorney General’s Defending Childhood initiative.  The task force is also a component of the Justice Department’s ongoing collaboration with leaders in American Indian and Alaska Native communities to improve public safety. 

To read the entire report and for more information about the advisory committee and public hearings, please visit www.justice.gov/defendingchildhood.

Court Finds Defendant Acted Because of Victim’s Sexual Orientation

The Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Northern District of Texas, and the FBI’s Dallas Division Office announced that Brice Johnson, 19, of Springtown, Texas, was sentenced today in federal court to 183 months imprisonment for kidnapping a young gay man after luring the victim to his home and brutally assaulting him because of his sexual orientation.

Johnson admitted in plea documents that, in the early morning hours of September 2, 2013, he connected with the adult male victim, identified as A.K., through the cell phone application for www.MeetMe.com.  A.K.’s www.MeetMe.com page indicated he was a gay man, while Johnson’s web page indicated he was not gay.  During their online communications, Johnson said that he was interested in engaging in sexual activity with A.K.  Johnson invited A.K. to his home, gave A.K. his cell phone number and address, and exchanged text messages planning their sexual encounter.  Just a few minutes after A.K. arrived at the house, Johnson severely beat him and bound A.K.’s wrists with an electrical cord. 

After the beating, Johnson locked the victim in the trunk of his own car and drove the car to a family friend’s house.  Individuals at the home repeatedly warned Johnson that he had to take A.K. to the hospital or they would call the police.  Johnson eventually transported A.K. to an Emergency Medical Services (EMS) station in Springtown.  A.K. was found to have suffered multiple skull and facial fractures from the beating, which required the victim  to be hospitalized for ten days.  Johnson admitted that he saved A.K.’s cell phone number using a gay slur as the contact name.

During the plea hearing, Johnson admitted that he held and confined the victim against his will in order to conceal the violent assault and to remove A.K’s severely injured body from the home where Johnson was a long-term houseguest.  At sentencing, U.S. District Judge Reed O’Connor found that the kidnapping was perpetrated by the defendant because of the victim’s sexual orientation. 

“Using violence against another person because of his sexual orientation will not be condoned,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “The department will continue to work with our state, local, and federal law enforcement partners to vigorously prosecute hate crimes.”

“Quite simply, hate crimes of any nature will not be tolerated,” said U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.  “Prosecutions under this law are important to ensure all people in our community know they have the full protection of the law.  I commend not only the victim for his continued cooperation throughout this investigation, but our law enforcement partners including the FBI, the Springtown Police Department and the Parker County Sheriff’s Office, who worked tirelessly in this case to ensure our hate crime laws are strictly enforced.”

“The FBI is committed to thoroughly investigating violent crimes of this nature, and will continue to work with our local and state law enforcement partners to ensure justice for victims of these crimes,” said Special Agent in Charge Diego Rodriguez of the FBI’s Dallas Division Office.

The investigation is being conducted by the FBI, the Springtown Police Department, and the Parker County Sheriff’s Office.  The case is being prosecuted by Assistant U.S. Attorney Cara Foos Pierce and Trial Attorney Saeed Mody of the Civil Rights Division.

Sevenson Environmental Services Inc., an environmental remediation firm based in Niagara Falls, New York, has agreed to pay more than $2.72 million to resolve allegations that it violated the False Claims Act and the Anti-Kickback Act by accepting kickbacks, rigging bids and passing inflated charges to the U.S. Environmental Protection Agency (EPA) in connection with work performed at the Federal Creosote Superfund Site in Manville, New Jersey, the Department of Justice announced today.  Sevenson was the prime contractor responsible for the cleanup of the Federal Creosote Site, which was funded by the EPA.

“The integrity of the public procurement process is severely undermined when federal contractors engage in anticompetitive contracting practices for their own personal gain,” said Acting Deputy Assistant Attorney General August E. Flentje for the Department of Justice’s Civil Division.  “The Department of Justice will hold those accountable who abuse their positions at the public’s expense.”

“EPA is vigilant to ensure that the type of fraud perpetrated by Sevenson employees at Federal Creosote is not tolerated and that federal funds are recovered,” said EPA Regional Administrator Judith A. Enck. 

The settlement announced today resolves allegations that Sevenson solicited and accepted more than $1.6 million in kickbacks from six companies in exchange for the award of subcontracts for work at the Federal Creosote Site.  It also resolves allegations that Sevenson conspired with the subcontractors to pass the majority of those kickbacks to the EPA and that it conspired with one subcontractor to pass to the EPA additional inflated charges for soil disposal. 

This case was handled by the Civil Division’s Commercial Litigation Branch, with assistance from the New York Field Office of the department’s Antitrust Division, the EPA Region 2, the EPA’s Office of the General Counsel and the Kansas City District of the U.S. Army Corps of Engineers.  The claims resolved by this settlement are allegations only, and there has been no determination of liability.

The Justice Department announced today that it has entered into a settlement agreement with Ahold U.S.A. Inc. and Peapod LLC, the owners and operators of www.peapod.com, to remedy alleged violations of the Americans with Disabilities Act (ADA).  Peapod is America’s leading Internet grocer, delivering more than 23 million orders in 12 Midwest and East Coast states and the District of Columbia.  The agreement resolves the department’s allegations that www.peapod.com is not accessible to some individuals with disabilities, including individuals who are blind or have low vision, individuals who are deaf or hard of hearing, and individuals who have physical disabilities affecting manual dexterity.       

Many individuals with disabilities use computers and other electronic devices to access the Internet with the help of assistive technologies, including text-to-speech “screen reader” software programs, refreshable Braille displays, keyboard navigation and captioning.  Such technologies have been readily available and widely used for decades; however, websites must include programming for the assistive technologies to function properly for users with disabilities.  Inaccessible websites and mobile applications persist even while there are well-established industry guidelines – the Web Content Accessibility Guidelines (WCAG) 2.0 – for making web content accessible.

Under the agreement, Peapod is required to adopt measures to ensure that users with disabilities are able to fully and equally enjoy the various goods, services, facilities and accommodations provided through www.peapod.com including:

• ensure that www.peapod.com and its mobile applications conform to, at minimum, the Web Content Accessibility Guidelines 2.0 Level AA Success Criteria (WCAG 2.0 AA), except for certain third party content;

• designate an employee as web accessibility coordinator for www.peapod.com, who will report directly to a Peapod, LLC executive;

• retain an independent website accessibility consultant, who will annually evaluate the accessibility of the website and  its mobile applications;

• adopt a formal web accessibility policy;

• provide a notice on www.peapod.com soliciting feedback from visitors on how website accessibility can be improved;

• provide automated accessibility testing and accessibility testing by individuals with a variety of disabilities of www.peapod.com and its mobile applications;

• provide mandatory annual training on website accessibility for Peapod’s website content personnel.

“This agreement ensures that people with disabilities will have an equal opportunity to independently and conveniently shop online for groceries,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “We applaud Peapod for working cooperatively with the department and for its commitment to customers with disabilities.”

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

To find out more about federal disability rights laws, call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. 

John Bennett, a Canadian national, was extradited Friday from Canada on a charge of participating in a conspiracy to pay kickbacks and commit fraud at the U.S. Environmental Protection Agency (EPA)-designated Superfund site Federal Creosote, located in Manville, New Jersey.  He was also charged with a related count for major fraud against the United States related to contracts obtained at the Federal Creosote site, the Department of Justice announced today.

Bennett was the former Chief Executive Officer with Bennett Environmental Inc., a Canadian-based company that treated and disposed of contaminated soil.  According to a felony indictment filed in the U.S. District Court for the District of New Jersey on Aug. 31, 2009 Bennett carried out the conspiracy by providing kickbacks to Gordon McDonald, the project manager at the Federal Creosote site, in order to influence the award of sub-contracts at the site and inflate the prices charged to the EPA by the prime contractor.  The kickbacks were in the form of money transferred by wire to a co-conspirator’s shell company, lavish cruises for senior officials of the prime contractor, and various entertainment tickets.  The department said the conspiracy began at least as early as December 2001 and continued until approximately August 2004.

The clean-up at Federal Creosote is partly funded by the EPA. Under an interagency agreement between the EPA and the Army Corps of Engineers, prime contractors oversaw the removal, treatment and disposal of contaminated soil as well as other operations at the Federal Creosote site.

Bennett arrived in the District of New Jersey, in Newark, on Nov. 14, 2014 and made his initial appearance today in the U.S. District Court for the District of New Jersey in Newark.

“The defendant is charged with thwarting the government’s competitive contracting practices,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division.  “This extradition demonstrates our resolve to pursue those who undermine competition.  And it is yet another example of our longstanding cooperation with our enforcement colleagues in Canada’s Department of Justice, which helps ensure that those who subvert competition in the United States and elsewhere are brought to justice.”

The fraud conspiracy that Bennett is charged with carries a maximum penalty of five years in prison and a $250,000 fine.  The major fraud against the United States charge carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

As a result of the department’s investigation, three companies, including Bennett Environmental Inc., and eight individuals have pleaded guilty.  Bennett’s co-conspirator, Gordon McDonald, was convicted on Sept. 30, 2013, on 10 counts, including the two charges pending against Bennett.  McDonald was sentenced on March 4, 2014 to a 14-year term of imprisonment. 

The investigation was conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation with assistance from the Antitrust Division’s Foreign Commerce Section and the Criminal Division’s Office of International Affairs.  Anyone with information concerning bid rigging, kickbacks, tax offenses, or fraud relating to sub-contracts awarded at the Federal Creosote or Diamond Alkali sites should contact the New York Field Office of the Antitrust Division at 212-335-8000.

One of the alleged leaders of the Beltran Leyva Organization, a Mexican drug-trafficking cartel responsible for importing multi-ton quantities of cocaine and methamphetamine into the United States, was extradited to the United States from Mexico on Nov. 15, 2014, and will be making an initial appearance this afternoon before U.S. Magistrate Judge Alan Kay of the District of Columbia.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Director Joseph S. Campbell of the FBI’s Criminal Investigative Division, New York Division Special Agent in Charge James J. Hunt of the Drug Enforcement Administration (DEA) and Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI) made the announcement.

“Over the past two decades, the Beltran Leyva Cartel has distributed tens of thousands of kilograms of dangerous narcotics and engaged in a campaign of violence that sparked drug wars and jeopardized public safety across North America,” said Assistant Attorney General Caldwell.  “Today’s extradition of alleged kingpin Alfredo Beltran Leyva is an important step toward stamping out an organization that has ruined the lives of so many.  The Justice Department is committed to working with our international partners to bring the rest of the organization to justice.”   

“The arrest and extradition of Alfredo Beltran Leyva represents a significant milestone in combating transnational criminal organizations,” said FBI Assistant Director Campbell.  “It is through collaborative efforts with our law enforcement partners that the United States will stem the tide of this continuing threat.”

“For years Alfredo Beltran Leyva, along with his brothers, was responsible for not only smuggling tons of cocaine to the United States, but also for the violence that has plagued the lives of Mexican citizens,” said DEA Special Agent in Charge Hunt.  “His extradition to the United States is an example of a commitment to international cooperation and the rule of law.”

“The illegal drugs distributed throughout the United States by the Beltran Levya Cartel ruined countless lives in this country and sowed violence and chaos throughout Mexico,” said HSI Executive Associate Director Edge.  “The arrest and extradition of Alfredo Beltran Levya to face justice here for his crimes is a great victory for ICE HSI and our partner agencies.”

Alfredo Beltran Levya, 43, was indicted on Aug. 24, 2012, for international narcotics trafficking conspiracy in connection with his leadership role in theinternational drug-trafficking cartel bearing his family name. 

According to a motion for pretrial detention filed by prosecutors, between the early 1990s until his January 2008 arrest by Mexican law enforcement, Beltran Levya allegedly led the Beltran Levya Organization with his brothers Hector Beltran Levya and Arturo Beltran Levya, the latter of whom was killed in a December 2009 shootout with the Mexican army.  Since the 1990s, the Beltran Levya Organization, together with the Sinaloa Cartel, allegedly directed a large-scale drug transportation network, shipping multi-ton quantities of cocaine from South America, through Central America and Mexico, and finally into the United States via land, air and sea.  The organization also employed “sicarios,” or hitmen, who allegedly carried out hundreds of acts of violence, including murders, kidnappings, tortures and violent collections of drug debts, at the direction of the organization.

Following the January 2008 arrest of  Alfredo Beltran Leyva by Mexican law enforcement authorities, the Beltran Leyva Organization severed its relationship with the Sinaloa Cartel, which was blamed for the arrest.  This resultedin a violent war between the two drug cartels, and the murder of thousands of citizens in Mexico, including numerous law enforcement officers and officials.

On May 30, 2008, the President added the Beltran Leyva Organization to the Department of Treasury’s Office of Foreign Asset Control’s Specially Designated Nationals and Blocked Persons list pursuant to the Foreign Narcotics Kingpin Designation Act.  On Aug. 20, 2009, the President specifically designated Beltran Leyva as a specially designated drug trafficker under the same Kingpin Act.

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

The investigation is led by the FBI’s El Paso Office, in partnership with the DEA’s New York Field Division and HSI’s New York Office, as part of the Organized Crime Drug Enforcement Task Force.  This case is being prosecuted by the Criminal Division’s Narcotic and Dangerous Drugs Section, with the assistance of the Criminal Division’s Office of International Affairs.  The Justice Department thanks the government of Mexico for their assistance in this extradition.

A Kentucky federal grand jury returned a one-count indictment against two executives of Japanese automotive parts manufacturers for their participation in a conspiracy to fix prices and rig bids of bearings, the Department of Justice announced today.

The indictment, filed late yesterday in the U.S. District Court for the Eastern District of Kentucky in Covington, charges Hiroya Hirose an executive at NSK Ltd., and Masakazu Iwami an executive at Jtekt Corporation, with conspiring to fix the prices of bearings sold to Toyota Motor Corporation and Toyota Motor Engineering & Manufacturing North America Inc. (collectively, “Toyota”) in the United States and elsewhere, beginning at least as early as 2001 and continuing until as late as July 2011. 

“The division will continue to pursue executives who violate the antitrust laws,” said Assistant Attorney General Bill Baer for the Antitrust Division.  “American consumers deserve the benefit of free competition between auto parts suppliers.”

Hirose was a group sales manager in NSK’s Mid-Japan Automotive Department Office from at least as early as January 2006 until at least 2009, and a general manager in that office from 2009 until at least 2011.  Iwami was a Section Manager, then General Manager, in Jtekt’s Toyota Branch office from at least as early as 1999 until at least October 2007, and then Vice Branch Manager in that office from October 2007 until at least June 2009.

The indictment alleges, among other things, that Hirose, Iwami, and co-conspirators participated in, and directed, authorized, or consented to the participation of subordinate employees in, meetings, conversations, and communications to discuss the bids and price quotations to be submitted to Toyota in the United States and elsewhere.  Hirose, Iwami, and their co-conspirators submitted bids and price quotations in accordance with the agreements reached at these meetings. 

NSK is a corporation organized and existing under the laws of Japan with its principal place of business in Tokyo, Japan.  On Oct. 28, 2013, NSK pleaded guilty and agreed to pay a $68.2 million criminal fine for its role in the conspiracy.  Jtekt is a corporation organized and existing under the laws of Japan with its registered headquarters in Osaka, Japan.  On Dec. 3, 2013, Jtekt pleaded guilty and agreed to pay a $103.27 million criminal fine for its role in the conspiracy.  Both NSK and Jtekt were engaged in the business of manufacturing and selling bearings to Toyota in the United States and elsewhere for installation in vehicles manufactured and sold in the United States and elsewhere. 

Including Hirose and Iwami, 46 individuals have been charged in the government’s ongoing investigation into market allocation, price fixing, and bid rigging in the auto parts industry.  Twenty-six of these individuals have pleaded guilty and have been sentenced to serve prison terms ranging from a year and one day to two years.  Additionally, 31 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of now more than $2.4 billion in fines.

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

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

Hirose & Iwami Indictment

A Florida man who is already facing health care fraud and money laundering charges in federal court in Tampa was arrested again today, along with the owner of a health care marketing company, in an alleged illegal cash-for-patients kickback scheme involving clinical laboratory testing. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office, and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

David Brock Lovelace, 44, of Land O’ Lakes, Florida, and Dale B. DuBois, 61, of Melbourne, Florida, were arrested on a criminal complaint charging them with conspiracy to defraud the Medicare program and pay illegal kickbacks.  Lovelace was charged by indictment in May 2014 with health care fraud and money laundering offenses in a case pending in the Middle District of Florida.  After being arrested in that case, Lovelace was released on bond and ordered not to commit crimes or engage in any occupation relating to the health care services industry. 

According to allegations in the criminal complaint filed in the new case, Lovelace and DuBois, a managing member of Healthcare Marketing Florida LLC, paid cash kickbacks to purported medical clinics in Miami-Dade County, Florida, in exchange for DNA test samples and patient information.  Lovelace and DuBois then allegedly provided the test samples and patient information to laboratory companies for their submission of reimbursement claims to Medicare for clinical diagnostic laboratory services.  Over the past 14 months, Lovelace has allegedly received more than $675,000 from one of the laboratory companies for the samples. 

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

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

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

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

A former Oklahoma City law enforcement officer and owner of “Polygraph.com” has been indicted on obstruction of justice and mail fraud charges for allegedly training customers to lie and conceal crimes during polygraph examinations. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting Assistant Commissioner Mark Morgan of U.S. Customs and Border Protection’s Office of Internal Affairs and Special Agent in Charge James E. Finch of the FBI’s Oklahoma City Field Office made the announcement.

Douglas Williams, 69, of Norman, Oklahoma, was charged in a five-count indictment in the Western District of Oklahoma with mail fraud and obstruction.  According to allegations in the indictment, Williams, the owner and operator of “Polygraph.com,” marketed his training services to people appearing for polygraph examinations before federal law enforcement agencies, federal intelligence agencies, and state and local law enforcement agencies, as well as people required to take polygraph examinations under the terms of their parole or probation.

The indictment further alleges that Williams trained an individual posing as a federal law enforcement officer to lie and conceal involvement in criminal activity from an internal agency investigation.  Williams is also alleged to have trained a second individual posing as an applicant seeking federal employment to lie and conceal crimes in a pre-employment polygraph examination.  Williams, who was paid for both training sessions, is alleged to have instructed the individuals to deny having received his polygraph training. 

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

The investigation is being investigated by U.S. Custom and Border Protection’s Office of Internal Affairs and the FBI’s Oklahoma City Field Office.  The case is being prosecuted by Trial Attorneys Mark Angehr and Brian K. Kidd of the Criminal Division’s Public Integrity Section.  

A Detroit-area physician, who orchestrated the submission of fraudulent claims for physician home visits and directed fraudulent referrals for home health care by his employee physicians as part of a $19 million home health care fraud scheme, pleaded guilty today for his role in the conspiracy.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.

Dr. Rajesh Doshi, 59, of Bloomfield Hills, Michigan, pleaded guilty before Senior U.S. District Judge Arthur J. Tarnow of the Eastern District of Michigan to conspiracy to commit health care fraud and one count of health care fraud.  The sentencing hearing is set for March 3, 2015.

According to his plea agreement, Dr. Doshi admitted that between October 2005 and September 2012, he conspired with others to commit health care fraud by referring Medicare beneficiaries for home health care that was not medically necessary, and then submitting false and fraudulent claims for the purported care to Medicare for reimbursement.  Dr. Doshi admitted that he submitted these false claims through Home Physicians Services (HPS), a medical practice he owned in Southfield, Michigan.  Although Dr. Doshi owned HPS, he hid his ownership because of prior state court convictions. 

Specifically, Dr. Doshi admitted that he paid kickbacks to recruiters to obtain Medicare beneficiaries for HPS and home health agencies owned by co-conspirators.  Dr. Doshi and his co-conspirators then falsified medical and billing records for purported physician home visits, sometimes adding diagnoses to make it appear that the beneficiaries qualified for and required home care when they did not, and other times, “upcoding” physician home visits to higher levels of complexity than actually performed.  

Dr. Doshi also admitted that he solicited and received kickbacks from home health agency owners in exchange for the referral of beneficiaries to those agencies, regardless of whether the beneficiaries qualified for or needed home health care.  He then directed HPS physicians to falsify medical documentation and certify Medicare beneficiaries as homebound even though the HPS physicians had never met the beneficiaries or the beneficiaries were not actually homebound.

Between October 2005 and September 2012, Dr. Doshi and his co-conspirators caused Medicare to pay more than $19 million based on false claims.  Three other physicians and one physician assistant have already pleaded guilty for their involvement in the health care fraud conspiracy related to the scheme at HPS.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  This case is being prosecuted by Trial Attorney Niall M. O’Donnell of the Criminal Division’s Fraud Section. 

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

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

The Justice Department announced it has filed a lawsuit against Encore Management Co. Inc., Perkins Parke Limited Partnership and three former employees of Perkins Parke Apartments in Cross Lanes, West Virginia, alleging that female tenants have been subjected to sexual harassment and retaliation in violation of the Fair Housing Act.

The lawsuit, filed today in federal court for the Southern District of West Virginia, alleges that Perkins Parke’s district manager, Anthony James, and maintenance worker, Christopher T. James, have sexually harassed female tenants at the complex, and that Perkins Parke’s site manager, Kisha James, failed to take appropriate steps when residents complained about the harassment.  The complaint alleges that such harassment has included entering the residences of female tenants without permission or notice; conditioning housing or housing benefits on female tenants’ agreement to engage in sexual acts; coercing female tenants to engage in unwelcome sexual acts; making unwelcome sexual comments and unwelcome sexual advances to female tenants; subjecting female tenants to unwanted sexual touching and other unwanted sexual acts; and taking adverse actions against female residents when they refused the sexual advances or reported the unwelcome conduct.

“No woman should have to live in fear of sexual harassment in her home,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “The Fair Housing Act protects tenants from sexual harassment and retaliation by their landlords, and the Justice Department enforces the Fair Housing Act to vindicate these important rights.”

“Safe and secure housing is one of humanity’s most basic needs,” said U.S. Attorney R. Booth Goodwin for the Southern District of West Virginia.  “Threats to that safety and security, such as those alleged in the complaint, and making housing available contingent upon the performance of unwelcome acts is both a violation of federal law and human decency and will not be tolerated.“

“These housing providers preyed on poor women by sexually harassing them and retaliating against them,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity.  “HUD is committed to working with the Justice Department to stop this unacceptable and illegal behavior.”  The suit seeks monetary damages to compensate the victims, civil penalties, and a court order barring future discrimination.

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

The complaint is an allegation of unlawful conduct.  The allegations must be proven in federal court.  

A Cincinnati resident, Christopher Hisle, 45, pleaded guilty today to one count of commercial sex trafficking by force, fraud or coercion, two counts of enticing a person to travel in interstate commerce for the purpose of prostitution and one count of interstate transportation for the purpose of prostitution.  Police arrested Hisle on April 8, 2014, in Louisville, Kentucky, after discovering Hisle drove a young woman from Cincinnati to Louisville to engage in prostitution at a Red Roof Inn.  A subsequent FBI investigation revealed Hisle’s involvement in forcing and compelling multiple young women to engage in commercial sex.

According to the plea agreement, Hisle physically assaulted several of the victims, including striking one of the victims in the face when she threatened to run away.  Hisle locked the victims in his house in Cincinnati by boarding and locking all the doors and windows, including locking the women in the house when he left.  On one occasion, a young woman escaped, but Hisle found her and brought her back.

“This defendant preyed on vulnerable young victims and cruelly exploited them for his profit,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “Our Constitution guarantees freedom from involuntary servitude and slavery to all members of our society, and we will continue to enforce our human trafficking laws to restore the rights, freedom and dignity to victims of modern-day slavery.”

“My office is committed to seeking justice for victims of human trafficking,” said U.S. Attorney David J. Hale for the Western District of Kentucky.  “Tragically, these crimes so often pass without detection because victims live in fear from physical abuse, threats and other forms of coercion.  My office has worked to improve detection and prosecution by sponsoring training for our federal and local law enforcement partners.”

“Sex Trafficking is a crime that victimizes people in a highly personal manner,” said Special Agent in Charge Howard S. Marshall of the FBI’s Louisville Office.  “Victims often feel as if they have no options and no hope.  Detecting sex trafficking is essential to stopping it.  The FBI works with state and local partners to uncover this heinous crime.  If you believe you are a victim of sex trafficking or may have information about a particular trafficking situation, please contact the FBI.”

Hisle faces a mandatory minimum sentence of 15 years in prison.  Senior District Court Judge John G. Heyburn II set sentencing for Feb. 9, 2015.  As part of his plea agreement, Hisle will pay restitution to 12 women identified as victims of Hisle’s human trafficking crimes.

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

The chief engineer of the cargo vessel M/V Selene Leader pleaded guilty today in federal court in Baltimore, Maryland, to obstruction of justice and violating the Act to Prevent Pollution from Ships (APPS), announced Acting Assistant Attorney General Sam Hirsch and U.S. Attorney Rod J. Rosenstein of the District of Maryland.

Noly Torato Vidad was the chief engineer of the vessel, which was operated by Hachiuma Steamship Co LTD, a Japanese company, between August 2013 and the end of January 2014.  The M/V Selene Leader According to the plea agreement, in January 2014, engine room crew members of the M/V Selene Leader under the supervision of the defendant transferred oily wastes between oil tanks on board the ship using rubber hoses and then illegally bypassed pollution control equipment and discharged the oily wastes overboard into the ocean.  Before such waste can be discharged into the sea, the law requires that it must first pass through an oil water separator, and the operation must be recorded in the vessel’s oil record book for inspection by the United States Coast Guard.   

When the Coast Guard boarded the vessel in Baltimore on Jan. 31, 2014, Mr. Vidad tried to obstruct the Coast Guard’s investigation and hide the illegal discharges of oil by falsifying the oil record book, destroying documents, lying to Coast Guard investigators and instructing subordinate crew members to lie to the Coast Guard.  

Sentencing in this case is scheduled for Feb. 20, 2015.

This case was investigated by the U.S. Coast Guard Investigative Service and is being prosecuted by Assistant United States Attorney P. Michael Cunningham of the District of Maryland and Senior Trial Attorney David P. Kehoe of the Justice Department’s Environmental Crimes Section.

---

UPDATE

The defendants in this case, Howard Root and Vascular Solutions Inc., were acquitted of the charges alleged in the indictment described in the press release below.

---

An indictment was filed today charging Vascular Solutions Inc. (VSI) and its chief executive officer, Howard Root, with selling medical devices without U.S. Food and Drug Administration (FDA) approval and conspiring to defraud the United States by concealing the illegal sales activity.  The announcement was made today by Acting Assistant Attorney General Joyce R. Branda for the U.S. Department of Justice’s Civil Division, U.S. Attorney Robert Pitman for the Western District of Texas and Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration (FDA)’s Office of Criminal Investigations, Metro Washington Field Office. The devices at issue are from VSI's “Vari-Lase” product line, a system designed to treat varicose veins by burning or “ablating” them with laser energy.

Root and VSI are each charged with one count of conspiracy and eight counts of introducing adulterated and misbranded medical devices into interstate commerce.  The case is pending in the U.S. District Court for the Western District of Texas. 

“These charges involve a deceptive sales campaign led by the CEO of a public company,” said Acting Assistant Attorney General Branda.  “The indictment charges that the sales campaign persisted in the face of FDA warnings, a whistleblower’s complaint to the CEO and a failed clinical trial showing that the device was less safe and less effective than a product that had already been approved.  We will take action to hold corporations and their leaders responsible when they violate laws intended to protect public health.”

According to the indictment, the Vari-Lase products were cleared by the FDA only for the treatment of superficial veins, but Root and VSI sold them for the ablation, or removal, of “perforator” veins, which connect the superficial vein system to the deep vein system.  Because perforator veins come into direct contact with deep veins, treating them with lasers was a more difficult and risky procedure.

Root is charged with leading the illegal sales campaign, which lasted from 2007 until 2014, and conspiring with others to hide it from the FDA.  The indictment alleges that Root authorized the campaign after VSI failed to obtain FDA authorization to sell the Vari-Lase system for ablation of perforator veins.  The sales campaign is alleged to have ignored FDA concerns about the safety and effectiveness of the procedure and specific warnings from the FDA not to sell Vari-Lase products for treatment of perforator veins.  The indictment alleges that, with Root’s approval, the sales continued even after the company sponsored an unsuccessful clinical trial that showed that the Vari-Lase system was less safe and effective than a competing device that the FDA had cleared for perforator vein treatment.  According to the indictment, the sales continued even after a whistleblower complained to Root in 2009 and the government told the company about its investigation in 2011.

The indictment also charges VSI and Root with deceiving the FDA.  In late 2007, Root decided to launch a special “Short Kit” designed for perforator vein treatment, despite the lack of FDA marketing authorization, by claiming that the product was intended for “short vein segments” or “short veins.”  At the same time, the government alleged that internal company documents approved by Root taught the sales force that these terms included perforator veins and urged salespeople to suggest to health care providers that Vari-Lase devices could be used to treat perforator veins.  After learning about the government’s investigation, members of the sales force began using the term “short vein segments” in field trip reports to disguise that they were still selling Vari-Lase devices for perforator vein treatment, according to the indictment.  Two other members of the sales force are alleged to have misled investigators; in addition, the indictment charges that one member falsely denied his conduct and another tried to scapegoat a low-level salesman.

In July 2014, VSI agreed to pay $520,000 to resolve allegations that it caused false claims to be submitted to federal health programs by marketing the Vari-Lase devices for treating perforator veins.  In that civil action, the government alleged that VSI knowingly caused physicians and other purchasers of the Short Kit to submit false claims to federal health care programs for uses of the Short Kit that were not reimbursable. 

“FDA is committed to protecting the public health and the integrity of the regulatory system,” said Special Agent in Charge Henry. 

The case is being prosecuted by Trial Attorney Timothy Finley of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bud Paulissen of the Western District of Texas.  The case was investigated by the FDA’s Office of Criminal Investigations and the U.S. Department of Health and Human Services’ Office of the Inspector General.

An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.

A former lobbyist and a former securities broker have been sentenced for their roles in a bribery and money laundering scheme involving the Ohio Treasurer’s Office.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, Special Agent in Charge Kevin R. Cornelius of the FBI’s Cincinnati Division and Ohio Attorney General Mike DeWine made the announcement after sentencing by U.S. District Judge Michael H. Watson of the Southern District of Ohio.

Douglas E. Hampton, 40, of Uniontown, Ohio, was sentenced today to serve 45 months in prison and ordered to forfeit $2,202,259.  Mohammed Noure Alo, 35, of Columbus, Ohio, was sentenced yesterday to serve 48 months in prison and ordered to forfeit $123,622.  Last year, Alo pleaded guilty to aiding and abetting honest services wire fraud, and Hampton pleaded guilty to conspiracy to commit honest services wire fraud, federal program bribery and money laundering.  The former Deputy Treasurer for Ohio, Amer Ahmad, fled after pleading guilty to federal program bribery and conspiracy to commit honest services wire fraud, federal program bribery, and money laundering, and is currently in Pakistani custody pending an extradition request from the United States government. 

Joseph Chiavaroli, 34, of Chicago, pleaded guilty to money laundering and is scheduled for sentencing on Dec. 1, 2014.

According to the defendants’ admissions in connection with their guilty pleas, from approximately January 2009 through January 2011, Ahmad, Alo, Hampton and Chiavaroli conspired to use Ahmad’s position as deputy treasurer to direct official state of Ohio business to Hampton in return for bribes from Hampton.  Ahmad and Chiavaroli concealed the payments received from Hampton by passing them through the accounts of their landscaping business.  Hampton also funneled more than $123,000 to Alo, an attorney and lobbyist who was Ahmad’s close personal friend and business associate.  During the course of the scheme, Hampton paid in excess of $500,000 in bribes, and received, in exchange, approximately $3.2 million in commissions for 360 securities trades on behalf of the Ohio Treasurer’s Office.   

The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation.  The case is being prosecuted by Trial Attorneys Eric L. Gibson and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Douglas W. Squires of the Southern District of Ohio.

Seven Aryan Brotherhood of Texas (ABT) gang members from Houston and Dallas were sentenced to prison this week for their roles in the violent ABT enterprise, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

Today, Stephen Tobin Mullen, 45, of Dallas, and James Erik Sharron, 40, of Houston, were sentenced to respective terms of 156 months and 72 months in federal prison by U.S. District Judge Sim Lake in the Southern District of Texas.  Yesterday, Larry Max Bryan, 52, of Houston, and Terry Ross Blake, 56, of Corpus Christi, both high-ranking leaders of the ABT, were sentenced to 300 months and 180 months in federal prison, respectively.  Jamie Grant Loveall, 38, of Houston; Kelly Ray Elley, 37, of Houston; and Ronald Lee Prince, 44, of Dallas, were also sentenced to respective terms of 390 months, 270 months and 120 months in federal prison. 

According to information presented in court, the seven defendants were admitted members of ABT, a powerful race-based, statewide organization that operates inside and outside of state and federal prisons throughout Texas and the United States. Along with other ABT gang members and associates, they agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. 

The ABT was established in the early 1980s within the Texas prison system.  The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s.  Previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism, but over time, the ABT has expanded its criminal enterprise to include illegal activities for profit, according to court records.

In order to be considered for ABT membership, a person must be sponsored by another gang member.  Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.

Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, arson, assault, robbery and threats against those who violated the rules or posed a threat to the enterprise.  ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.  Members were required to follow the orders of higher-ranking members, often referred to as “direct orders.”

The defendants sentenced this week are seven of 36 defendants convicted of conducting racketeering activity through the ABT criminal enterprise, among other charges.   

This Organized Crime Drug Enforcement Task Force case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement, Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.

The case is being prosecuted by David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Ed Gallagher and Tim Braley of the Southern District of Texas.

An owner of a Miami home health care company pleaded guilty today for his role in a $30 million home health Medicare fraud scheme.

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

Ramon Regueira, 66, of Miami, pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud.  Sentencing is scheduled for Jan. 21, 2015.

According to his plea agreement, Regueira was an owner of Nation’s Best Care Home Health Corp. (Nation’s Best), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.  Regueira admitted that he and his co-conspirators operated Nation’s Best for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or were not provided.

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

From January 2007 through November 2012, Nation’s Best submitted approximately $35 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $21 million for these fraudulent claims.

The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. 

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.  To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

A Georgia man who purchased stolen credit card data and other personal information through the identity theft and credit card fraud ring known as “Carder.su” was sentenced today to serve 115 months in federal prison.  He was further ordered to pay $50.8 million in restitution.

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

“Cyber thieves created a real criminal organization through the virtual world of the Internet, stealing credit card data and relying on technology, perceived anonymity, and international borders to evade law enforcement,” said Assistant Attorney General Caldwell.  “Cameron Harrison made a living by using that stolen financial information..  Applying time-honored techniques from mob and gang prosecutions to this new generation of cybercriminals, we were able to infiltrate and bring down the Carder.su ring.” 

“The financial toll exacted by identity theft and credit card fraud can be crippling to victims both financially and emotionally,” said U.S. Attorney Bogden.  “These are far from victimless crimes and the members of this organization were responsible for the theft of over $50 million.  We are working diligently with our law enforcement partners to ensure that the people who commit these high-tech crimes are put out of business.”

“This significant sentence is entirely fitting given that this defendant’s actions and those of the larger criminal organization harmed countless innocent Americans and seriously compromised our financial system,” said Homeland Security Investigations Executive Associate Director Peter T. Edge.  “Criminals like this defendant who believe they can elude detection by hiding behind their computer screens here and overseas are discovering that cyberspace affords no refuge from American justice.  HSI will continue to work closely with its law enforcement partners to track down these violators and see that they face the full weight of the law.”

Cameron Harrison, aka “Kilobit,” 28, of Augusta, Georgia, admitted at his guilty plea hearing that he became associated with the Carder.su organization in June 2008.  According to Harrison’s admissions, Carder.su was an Internet-based, international criminal enterprise whose members trafficked in compromised credit card account data and counterfeit identifications and committed money laundering, narcotics trafficking and computer crimes.  Harrison admitted that the group tried to protect the anonymity and the security of the enterprise from both rival organizations and law enforcement.  For example, members communicated through various secure and encypted forums, such as chatrooms, private messaging systems, encrypted email, proxies and encypted virtual private networks.  Gaining membership in the group required the recommendation of two current members in good standing.  

Harrison admitted that he purchased compromised credit card account data and other personal identifying information from fellow Carder.su members.  He further admitted to possessing over 260 compromised credit and debit card numbers, which were recovered from his computer and email accounts following his arrest. 

Harrison was identified when he purchased a counterfeit Georgia driver’s license from an undercover special agent through the Carder.su network.  During interactions with the undercover special agent, Harrison admitted to having been a vendor of counterfeit identifications in the defunct cyberfraud organization “ShadowCrew.” 

Fifty-five individuals were charged in four separate indictments in Operation Open Market, which targeted the Carder.su organization.  To date, 26 individuals have been convicted and the rest are either fugitives or are pending trial.  Harrison pleaded guilty in April 2014 to participating in a racketeer influenced corrupt organization, conspiracy to engage in a racketeer influenced and corrupt organization, and trafficking in and production of false identification documents.  

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

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.  For more information about the task force visit: www.stopfraud.gov/.

Five South Florida residents pleaded guilty this week in connection with a long-running $6.2 million Medicare fraud scheme involving Professional Medical Home Health LLC (Professional Home Health), a Miami home health care agency that purported to provide home health and therapy services.  Two of the defendants also pleaded guilty in connection with their conduct in similar schemes at other Miami home health care agencies.

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

Dennis Hernandez, 32, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud, and Juan Valdes, 37, of Palm Springs, Florida, pleaded guilty to one count of conspiracy to defraud the United States and receive health care kickbacks before U.S. Magistrate Judge Chris M. McAliley of the Southern District of Florida on Nov. 10. 2014.  Jose Alvarez, 48, and Joel San Pedro, 44, both of Miami, and Alina Hernandez, 38, of West Palm Beach, Florida, each pleaded guilty to one count of conspiracy to commit health care fraud on Nov. 13, 2014 before Judge McAliley.  Sentencing hearings are set for Jan. 29, 2015.

According to admissions in their plea agreements, Dennis Hernandez, San Pedro and Alvarez held positions of influence at Professional Home Health, including those of owner/operator and manager/supervisor.  Through Professional Home Health, they billed the Medicare program for expensive physical therapy and home health services that were not medically necessary or were not provided.  The three defendants admitted that they and their co-conspirators coordinated the submission of fraudulent claims at Professional Home Health, and falsified patient documentation to make it appear that Medicare beneficiaries qualified for and received home health services that were, in fact, not medically necessary or not provided.   

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

Dennis Hernandez and Alvarez also admitted to participating in similar criminal conduct at additional Miami-area home health agencies.

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

Earlier this year, two other individuals pleaded guilty and were sentenced in connection with the same scheme.  Annarella Garcia, an owner of Professional Home Health, was sentenced to serve 70 months in prison.  Annilet Dominguez, an administrator of Professional Home Health, was sentenced to serve 68 months in prison.  Both were also ordered to pay $6,257,142 million in restitution.   

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

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

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

The U.S. District Court for the Central District of California entered a consent decree of permanent injunction against Scilabs Nutraceuticals Inc. of Irvine, California, and its board chairman and chief executive officer (CEO), Paul P. Edalat, to prevent the distribution of adulterated dietary supplements, the Department of Justice announced today.

SciLabs Nutraceuticals Inc. is a contract manufacturer of dietary supplements distributed under the brand name All Pro Science, including Complete Immune + capsules and various flavored powders called Complete, Recovery and Precharge.  The department filed a complaint in the U.S. District Court for the Central District of California at the request of the U.S. Food and Drug Administration (FDA), alleging that the company’s dietary supplements are manufactured under conditions that are inadequate to ensure the quality of its products. 

In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from committing violations of the Federal Food, Drug, and Cosmetic Act.  The consent decree requires the dietary supplement manufacturer to cease all operations and requires that, in order for defendants to resume manufacturing dietary supplements, the FDA first must determine that Scilabs’ manufacturing practices have come into compliance with the law. 

“The failure to comply with current good manufacturing practice requirements by a maker of dietary supplements can pose a risk to the public health,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “The Department of Justice will continue to bring enforcement actions against those who do not follow the necessary procedures to comply with the safety laws for dietary supplements.”

According to the complaint, FDA inspections performed in 2012, 2013 and 2014 revealed that the company’s dietary supplements are adulterated within the meaning of the Food, Drug, and Cosmetic Act.  The complaint alleges, for example, that the company failed to conduct at least one appropriate test or examination to verify the identity of every dietary ingredient before using them.  The complaint also alleges that the company failed to establish product specifications for the identity, purity, strength and composition of finished batches of dietary supplements.  In addition, as alleged in the complaint, defendants failed to document equipment use, maintenance, cleaning and sanitization in individual equipment logs as required by law.

The government is represented by Trial Attorney Heide L. Herrmann of the Civil Division’s Consumer Protection Branch, with the assistance of Senior Counsel Claudia Zuckerman of the Food and Drug Division of the U.S. Department of Health and Human Services’ Office of General Counsel.

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

Waldemar Lorenzana-Cordon, 49, was arrested in Guatemala on Sept. 13, 2013, after being indicted for conspiracy to import cocaine into the United States, and has been detained since that time pending extradition.  He arrived in the United States yesterday and was arraigned today before U.S. Magistrate Judge Alan Kay of the District of Columbia.    

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

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

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

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

Lorenzana-Cordon’s father, Waldemar Lorenzana-Lima, was charged in the same indictment and pleaded guilty on Aug. 18, 2014, to conspiracy to import over 450 kilograms of cocaine into the United States. 

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

Aisin Seiki Co. Ltd., an automotive parts manufacturer based in Kariya, Japan, has agreed to plead guilty and to pay a $35.8 million criminal fine for its role in a conspiracy to allocate customers of variable valve timing (VVT) devices sold to automobile manufacturers in the United States and elsewhere, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court for the Southern District of Indiana in Indianapolis, Aisin conspired to allocate customers of VVT devices sold to various automobile manufacturers, including General Motors Company, Nissan Motor Company Ltd., Volvo Car Corporation and BMW AG, in the United States and elsewhere.  In addition to the criminal fine, Aisin has agreed to cooperate in the department’s ongoing investigation.  The plea agreement is subject to court approval.

“Today’s charge continues the Antitrust Division’s ongoing campaign to hold automobile part suppliers accountable for their illegal collusive conduct,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal, anticompetitive means.”

The department said that Aisin and its co-conspirators held meetings and conversations to discuss and agree upon the customers to whom each would sell VVT devices, and the bids and price quotations each would submit for VVT devices.  Aisin’s involvement in the conspiracy lasted from as early as September 2000 until at least February 2010.

VVT devices are installed in automobile engines and regulate the timing, extent, and duration of the opening of the engine’s intake and exhaust valves, thereby increasing fuel economy and engine performance.

Including Aisin, 31 companies and 44 individuals have been charged in the Justice Department’s ongoing investigation into the automotive parts industry.  All 31 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $2.4 billion in criminal fines.  Of the 44 individuals, 26 have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.

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

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Indianapolis Field Office and Bloomington Resident Agency, with the assistance of the FBI headquarters’ International Corruption Unit.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1–888–647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Indianapolis Field Office at 317-595-4000, or the FBI’s Bloomington Resident Agency at 812-332-9275.

Aisin Seiki Information

A commercial real estate developer and mortgage broker was sentenced to serve 121 months in prison today for his role in a $50 million securities fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California and Special Agent in Charge Douglas G. Price of the FBI’s Phoenix Division made the announcement.  U.S. District Judge Cathy Ann Bencivengo of the Southern District of California imposed the sentence.

Bradley Holcom, 57, of Canby, Oregon, previously pleaded guilty to wire fraud in connection with the sale of approximately $50 million worth of promissory notes to more than 150 investors located throughout the United States. 

Holcom admitted that he solicited investors to provide funds for the development of raw land for commercial and residential purposes through an investment program he called the Trust Deed Investment Program.  Holcom falsely told investors who purchased notes through the program that they would receive a lien on a specific piece of property, and that the lien would be in first position.  Holcom admitted, however, that he never provided investors with a lien, and instead conveyed a lesser interest that did not allow investors to directly foreclose on the property to protect their investment.  In addition, he admitted that while promising investors that their purported lien would be in first position, he knew the properties were already encumbered by first position liens.  Holcom also admitted that he sold the properties that were supposedly serving as the security for the promissory notes without informing investors.  Despite his declining financial condition in 2008 and 2009, Holcom continued to solicit investors by misrepresenting the manner in which he would use their investments.  As a result of the scheme, Holcom admitted that his conduct caused approximately $50 million in losses to investors. 

In addition to the prison sentence, Holcom was ordered to pay restitution to his victims, with the final amount to be determined at a subsequent hearing. 

This case was investigated by the FBI’s Phoenix Division – Yuma Resident Agency.  The case is being prosecuted by Trial Attorney Henry P. Van Dyck and Deputy Chief Daniel Braun of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Mark Pletcher of the Southern District of California.  The U.S. Securities and Exchange Commission also provided substantial assistance.

The following statement is attributable to Justice Department spokesman Brian Fallon:

“The Attorney General participated in a conference call this afternoon with federal, state and local elected officials from Missouri. The Attorney General thanked the elected officials for their work in planning the local response to the ongoing demonstrations in and around Ferguson. He said he was encouraged by reports he has received about progress being made in those planning efforts, including dialogue with coalition leaders about constructive engagement in the weeks ahead. The Attorney General stressed that going forward, it will be more important than ever that the law enforcement response to the demonstrations always seek to deescalate tensions and respect the rights of protestors. At the same time, the Attorney General said, it must be clearly communicated that any acts of violence by the demonstrators, or other attempts to provoke law enforcement, are unacceptable.

“With respect to the Department’s ongoing investigations into both the shooting of Michael Brown and the Ferguson police department generally, the Attorney General said he could not provide a specific timeline for concluding those inquiries. He did stress, however, that he had devoted significant resources to these investigations in order to ensure they are conducted in as thorough and expeditious a manner as possible.

“The Attorney General concluded by offering the Department’s continued assistance, and by urging continued and direct communication between elected officials, law enforcement, and community leaders in the days ahead to help deescalate tensions and assist with planning.” 

CareAll Management LLC and its affiliated entities (collectively “CareAll”) have agreed to pay $25 million, plus interest, to the United States and the state of Tennessee to resolve allegations that CareAll violated the False Claims Act by submitting false and upcoded home healthcare billings to the Medicare and Medicaid programs, the Department of Justice announced today.  CareAll is based in Nashville, Tennessee, and is one of Tennessee’s largest home health providers. 

“Home health agencies may only bill Medicare and Medicaid for care that is necessary and covered by the programs,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “This settlement is another example of the department’s commitment to ensuring that home health care dollars – which are so vital to ensure the care of homebound patients – are spent for their intended purposes.”

This settlement resolves allegations that between 2006 and 2013, CareAll overstated the severity of patients’ conditions to increase billings and billed for services that were not medically necessary and rendered to patients who were not homebound.      

“This case demonstrates that enforcement of the False Claims Act is a priority of the U.S. Attorney’s Office for the Middle District of Tennessee,” said U.S. Attorney David Rivera for the Middle District of Tennessee.  “The U.S. Attorney’s Office and our law enforcement partners are committed to protecting the public and vigorously pursuing all those who knowingly submit false claims affecting the Medicare and Medicaid programs.”

This is CareAll’s second settlement of alleged False Claims Act violations within the last two years.  In 2012, CareAll paid nearly $9.38 million for allegedly submitting false cost reports to Medicare.  As part of the settlement announced today, the companies agreed to be bound by the terms of an enhanced and extended corporate integrity agreement with the Department of Health and Human Services-Office of Inspector General (HHS-OIG) in an effort to avoid future fraud and compliance failures.

“Fraudulent home-based services are surging across the country,” said Special Agent in Charge Derrick L. Jackson of HHS-OIG in Atlanta.  “We will continue to protect both Medicare and taxpayers, and ensure that funds are not siphoned off by companies more concerned with the bottom line than patient care.”

Under the False Claims Act, private citizens, known as relators, can bring suit on behalf of the United States and share in any recovery.  The relator in this case, Toney Gonzales, will receive more than $3.9 million as his share of the recovery.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of HHS.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $23.1 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs.    

The settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the Middle District of Tennessee, HHS-OIG and the Tennessee Bureau of Investigation. 

The case is docketed as United States ex rel. Gonzales v. J.W. Carell Enterprises, Inc., et al., No. 12-0389 (M.D. Tenn.).  The claims resolved by the settlement are allegations only; there has been no determination of liability. 

A leader of the Armenian Power gang, who was convicted at trial of 57 counts for his role in a racketeering conspiracy that included extortion, bank fraud, and a sophisticated credit and debit card skimming scheme, was sentenced today to 32 years in prison.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Stephanie Yonekura of the Central District of California made the announcement.

Mher Darbinyan, aka “Hollywood Mike” and “Capone,” 39, of Valencia, California, was sentenced by U.S. District Judge R. Gary Klausner of the Central District of California. 

According to the evidence presented at trial, Darbinyan was a leader of Armenian Power, a gang responsible for extortion, firearms offenses, fraud, and identity theft throughout the Los Angeles-area.  Among other activities, Darbinyan operated a sophisticated bank fraud scheme that used middlemen and runners to deposit and cash hundreds of thousands of dollars in fraudulent checks drawn on the accounts of elderly bank customers and businesses.  Separately, Darbinyan also organized and operated a sophisticated debit card skimming operation targeting customers of 99 Cents Only Stores across Southern California.  This expansive scheme involved the installation and use of skimmers to steal thousands of customers’ debit card numbers and PIN codes. 

Evidence at trial also showed that Darbinyan conspired to extort money from a member of the Armenian community by threatening violence against the victim and his family members.  On two separate occasions, Darbinyan also possessed firearms and ammunition after having previously been convicted of felony grand theft for his role in a 2004 debit card fraud scheme.

Darbinyan was among 90 individuals charged in 2011 in two indictments targeting Armenian Power.  To date, 87 individuals have been convicted.  Two defendants are fugitives, and prosecutors dismissed charges against one defendant. 

According to evidence presented during the Armenian Power trials, the Armenian Power street gang formed in the East Hollywood district of Los Angeles in the 1980s.  The gang’s membership consisted primarily of individuals of Armenian descent, as well as of other countries within the former Soviet bloc.  Armenian Power has been designated under California state law as a criminal street gang and is believed to have more than 250 documented members, as well as hundreds of associates.  According to evidence presented during the Armenian Power trials, Armenian Power members and associates regularly carry out violent criminal acts, including murders, attempted murders, kidnappings, robberies, extortions, and witness intimidation to enrich its members and associates and preserve and enhance the power of the criminal enterprise.

The trial evidence also showed that Armenian Power leaders worked closely with powerful organized crime figures in Russia and Armenia, known as “thieves-in-law,” and members of the Mexican Mafia prison gang to commit criminal activities in the Los Angeles area and elsewhere. 

These cases were investigated by the Eurasian Organized Crime Task Force, which is comprised of the FBI, Glendale Police Department, Los Angeles Police Department, Burbank Police Department, Los Angeles Sheriff’s Department, Internal Revenue Service – Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and U.S. Secret Service.  The Huntington Beach Police Department and Beverly Hills Police Department provided assistance. 

The cases are being prosecuted by Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Elizabeth Yang of the Central District of California.

Attorney General Eric Holder released the following statement Tuesday on the passing of civil rights leader John Doar:

"John Doar was a giant in the history of the Civil Rights movement, a courageous advocate for those who suffered discrimination, and a true champion of justice and equality over the course of many decades devoted to improving the country he loved so dearly.

"From Selma, to Montgomery, to the campus of Ole Miss, he stood with pioneers, rode with Freedom Riders, and marched with those who called for nothing more – and nothing less – than the rights which were theirs under the Constitution.  At a time when America's cities rioted – and Mississippi burned – he was never far from the front lines of this momentous struggle, leading efforts to overturn an unjust status quo and striving to achieve justice for civil rights workers who were senselessly murdered.

"Brave but unassuming, passionate but unbiased, he repeatedly risked his life to preserve the rule of law and stand up for that which was right.  He was one of the greatest leaders the Justice Department's Civil Rights Division has ever known.  And during a period of great national turmoil and transformative change, alongside countless other leaders and seemingly-ordinary citizens, he helped usher in a brighter dawn, and build a better future, for everyone in this country.

"I have always regarded John Doar as a personal hero and an embodiment of what it means to be a public servant.  In so many ways, he defined what is best about the Department he served so faithfully during one of its golden eras – proving every day, by word and by deed, that the law can be a strong, deft instrument of lasting, positive change.

"I was deeply saddened to learn of John Doar's passing, and I join President Obama and others throughout the nation in extending my deep condolences to his family and friends.  Although he will be sorely missed, we vow today that his vital work will go on – and his contributions, and shining example, will not merely endure; they will continue to push us forward."

Former Officer Stole Victim’s Debit Card and Other Items after Responding to Car Accident

Former Jefferson Parish Sheriff’s Deputy Mark Hebert, 49, was sentenced to serve 92 years in prison for a series of offenses Hebert committed while he was a sheriff’s deputy.  The sentence was announced by Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division; U.S. Attorney Kenneth A. Polite Jr. for the Eastern District of Louisiana; Special Agent in Charge Michael J. Anderson of the FBI New Orleans Field Office; and Sheriff Newell Normand from the Jefferson Parish Sheriff’s Office.  

U.S. District Judge Jane Triche Milazzo issued the sentence today, also ordering Hebert to pay $13,215.22 in restitution between the bank and estate of the victim.  Additionally, Judge Milazzo imposed a term of five years of supervised release following the term of imprisonment.  During the five year term the defendant will be under federal supervision and risks an additional term of imprisonment should he violate any terms of his supervised release.

According to court documents, Hebert was sentenced for crimes that started with an incident on Aug. 2, 2007, when Hebert, in his capacity as a Jefferson Parish Sheriff’s Deputy, responded to an automobile accident involving Albert Bloch and stole Bloch’s debit card and other items.  Thereafter, between Aug. 2 and Nov. 21, 2007, Hebert engaged in a scheme to defraud J.P. Morgan Chase Bank N.A. (Chase Bank) by using Bloch’s debit card to make unauthorized purchases of merchandise, and to withdraw funds from Bloch’s Chase Bank account via ATM.  After Bloch filed a dispute with the bank and the bank cancelled the debit card, Hebert continued his scheme to defraud by negotiating and attempting to negotiate forged checks drawn from Bloch’s account.  Hebert then obtained a replacement debit card that the bank sent to Bloch’s address, and used that card to make further unauthorized transactions at Chase Bank ATMs. 

During the course of the 2007 scheme to defraud, Bloch disappeared and has never been found.  After a four-day evidentiary hearing in July 2014, Judge Milazzo found by clear and convincing evidence that Hebert was responsible for the death and disappearance of Bloch.  The court announced that it considered this finding in issuing Hebert sentence.

“Former Deputy Hebert used his position as a law enforcement officer to in callous scheme to exploit and defraud the victim,” said Acting Assistant Attorney General Gupta.  “The Civil Rights Division, with the help of its federal and local law enforcement partners, will continue to vigorously prosecute cases such as these, where members of law enforcement egregiously violate their oaths in order to deprive individuals of their civil rights.”

“Today’s sentencing is the result of the successful collaboration of local and state law enforcement agencies in our continued fight to eradicate corruption in our community,” said U.S. Attorney Polite.  “The U.S. Attorney’s Office and its law enforcement partners are delivering the same message in a unified voice: we will not tolerate abuse of power and official position.  If you violate the public trust in Southeast Louisiana, you will be held accountable.”         

“Rigorous investigation of such criminal betrayals of oaths of office, as in the Hebert case, will continue to be a top priority for the FBI and its law enforcement partners, and will further cement our already very strong relationship with the Jefferson Parish Sheriff's Office,” said Special Agent in Charge Anderson.

“I am satisfied with today’s sentencing of former Deputy Hebert,” said Jefferson Parish Sheriff Normand.  “In as much as I am disappointed in the actions of former Deputy Hebert, I am very pleased that my investigators were instrumental in developing the investigation with the U.S. Attorney’s Office and the FBI.  This activity will not be tolerated in my department.”

The investigation of this matter was conducted by the Jefferson Parish Sheriff’s Office Detective’s Bureau and the FBI.  The case is being prosecuted by Assistant U.S. Attorney Steve Parker, Assistant U.S. Attorney Tony Sanders, and Civil Rights Division Trial Attorney Shan Patel.

Attorney General Eric Holder released the following statement Monday on the FBI’s release of the 2013 Uniform Crime Report:

"This reduction in the violent crime rate continues a historic trend, and comes thanks to the tireless work of police and prosecutors throughout the nation," said Attorney General Eric Holder.  "This is a remarkable achievement that builds upon the significant gains we've seen -- in reducing rates of both crime and incarceration -- since President Obama took office.  At the same time, we recognize we have much more work to do in order to ensure that every community, in every city in America, can share in the safer and brighter future we are building.”

Attorney General Eric Holder released the following statement Saturday on President Obama’s nomination of U.S. Attorney Loretta Lynch to serve as Attorney General:

“Loretta Lynch is an extraordinarily talented attorney, a dedicated public servant, and a leader of considerable experience and consummate skill.  I am certain that she will be an outstanding Attorney General, and I am delighted to join President Obama in congratulating her on this prestigious appointment.

“Throughout her career, and especially during her tenure as United States Attorney for the Eastern District of New York – during both the Clinton and Obama Administrations – Loretta has earned the trust and respect of Justice Department employees at every level, in Washington and throughout the country.  She is held in high regard by criminal justice, law enforcement, and civil rights leaders of all stripes.  And from her time as a career attorney, prosecuting high-profile public corruption cases, to her leadership of sensitive financial fraud and national security investigations, she has proven her unwavering fidelity to the law – and her steadfast dedication to protecting the American people.

“I have had the good fortune of working closely with Loretta on a range of important issues over the years, and particularly since the beginning of 2013, when I asked her to serve as chair of the Attorney General’s Advisory Committee.  She and her colleagues have been instrumental in implementing the Smart on Crime initiative.  And I know that she is both well-qualified and uniquely positioned to continue the critical work that’s underway and build upon the progress we have made over the past six years, from advancing criminal justice reform to safeguarding civil rights.

“I am confident that Loretta will lead the Department of Justice with integrity, honor, and distinction.  I congratulate her, once again, on her appointment.  And I wish her the best of luck.”

A grand jury in U.S. District Court for the Western District of Virginia returned an indictment yesterday charging a Jamaican citizen who was residing in Virginia in connection with the operation of a fraudulent lottery scheme, the Department of Justice and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) announced. 

Carlos O’Brian Ricketts, 31, was arrested Nov. 4 on a criminal complaint based on his participation in the lottery scheme.  The indictment announced today supersedes the charge in the criminal complaint against Ricketts.  Ricketts is charged with conspiracy to commit mail fraud and wire fraud, four counts of mail fraud, three counts of wire fraud, conspiracy to commit money laundering and 18 counts of money laundering.  If convicted, Ricketts faces a statutory maximum sentence of 20 years in prison for each count.

As alleged in the indictment, a co-conspirator induced elderly victims in the United States to send thousands of dollars to Ricketts to cover fees for purported lottery winnings that in fact victims had not won.  The indictment is part of the government’s crackdown on fraudulent lottery schemes based in Jamaica that target elderly victims in the United States.

“Co-conspirators in the United States are often key players in lottery schemes operating from foreign countries,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “The Department of Justice will continue to prosecute those who facilitate these pernicious schemes.”

From May 2010, Ricketts’ co-conspirator is alleged to have contacted elderly victims in the United States, claimed to represent a known U.S. sweepstakes company and falsely informed the victims that they had won thousands or millions of dollars in a lottery.  The co-conspirator allegedly told the victims to make payments of several thousand dollars in order to collect their purported prize winnings and instructed the victims to send and wire this money to Ricketts in Virginia.

The indictment charges that Ricketts received this money, kept a portion of the money for himself and sent the remainder to individuals in Jamaica.  According to the indictment, Ricketts sometimes sent the victims’ money to Jamaica in smaller, separate payments to the same person in Jamaica during a short period of time.  The indictment also alleges that Ricketts sometimes used the alias Kevin Brown when receiving money from victims and sending money to Jamaica.  The indictment further alleges that Ricketts used different addresses to conceal his identity.  The victims never received any lottery winnings.

“Participants in international lottery frauds cannot seek shelter in the Western District of Virginia,” said U.S. Attorney Timothy J. Heaphy for the Western District of Virginia.  “We will bring those responsible to justice.”

“HSI has disrupted multiple lottery scams across the globe,” said Special Agent in Charge Clark E. Settles of HSI Washington, D.C., which oversees the agency’s Harrisonburg office.  “The indictment of this individual marks yet another step against alleged con-artists who prey on elderly U.S. citizens.”

Acting Assistant Attorney General Branda and U.S. Attorney Heaphy commended HSI’s investigative efforts.  The case is being prosecuted by Trial Attorney Kathryn Drenning with the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Grayson Hoffman of the Western District of Virginia. 

A criminal complaint and an indictment are merely allegations and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.

A U.S. citizen residing in Thailand pleaded guilty today to one count of sexually exploiting a minor before U.S. Magistrate Judge Richard L. Puglisi of the District of Hawaii.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Florence T. Nakakuni of the District of Hawaii made the announcement.   

Ronny Lee Waldrip, 63, traveled to Honolulu, Hawaii on Feb. 13, 2012.  Upon his arrival in Honolulu, law enforcement discovered Waldrip brought a laptop computer that contained photos and videos depicting minors engaged in sexually explicit conduct, including videos of Waldrip engaging in sexually explicit conduct with minor females.  According to admissions in his plea agreement, from May 2010 through October 2011, Waldrip used a hidden camera to record his sexually explicit conduct with minor females in Thailand.  The minor victims named in the indictment were 14 and 15 years old at the time of the abuse.  Waldrip will be sentenced on May 7, 2015, by Senior U.S. District Judge Helen Gillmor.   

This case was investigated by Immigration and Customs Enforcement’s Homeland Security Investigations.  This case is being prosecuted by Trial Attorneys Sarah Chang and Michael Grant of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Ronald G. Johnson of the District of Hawaii, with help from the Criminal Division’s Office of International Affairs.

 WASHINGTON, DC – The Chairman of the United States Parole Commission, Isaac Fulwood announced today the passage of a bill to reauthorize the U.S. Parole Commission (USPC) for five years, which took effect November 1, 2013.  Fulwood expressed his pleasure regarding the term of the authorization; a five-year reauthorization rather than the several previous two-year reauthorizations.  This extended term will permit the Commission to provide greater certainty and consistency to perform its many functions concerning D.C. Code felons and federal offenders.  Currently the USPC has jurisdiction over more than 17,800 D.C. Code felons and approximately 3500 federal offenders, despite the abolishment of federal parole in 1987. 

           Chairman Fulwood expressed gratitude to Congresswoman Eleanor Holmes Norton (D-DC), who strongly supported the agency’s re-authorization.  “Providing the Parole Commission with a five-year extension eliminates the concern of job stability among staff.  With job stability comes more focus on productivity and quality work—which continues to fulfill the mission of the USPC.”  Congresswoman Norton worked closely with the House and Senate Judiciary committees on the bill because of the USPC’s responsibility for D.C. Code felons.

           “I am pleased that we were able to get a somewhat longer reauthorization,” said Norton. “However, considering that the USPC now has continuing responsibilities for D.C. Code felons and certain federal offenders, it is important to stabilize this important public safety agency with the same permanent authorization as other federal law enforcement agencies.  . .The reauthorization gives the Commission the longer-term stability it needs to continue to succeed and improve in the future.”

           Chairman Fulwood joins Congresswoman Norton in her appreciation of the work of Senate Judiciary Committee Chair Patrick Leahy (D-VT), House Judiciary Committee Chair Bob Goodlatte (R-VA), Ranking Member John Conyers (D-MI), Subcommittee on Crime, Terrorism, and Homeland Security Chair Jim Sensenbrenner (R-WI) and Ranking Member Bobby Scott (D-VA), for their work on getting the bill passed in the Senate and the House last month.

Federal law enforcement has taken action against over 400 Tor hidden service .onion addresses, including dozens of “dark market” websites, that were offering a range of illegal goods and services for sale on the “Tor” network, a special network of computers on the Internet designed to conceal the locations of individuals using it. 

The website addresses and computer servers hosting these websites were seized yesterday as part of a coordinated international law enforcement action involving the Justice Department’s Criminal Division, U.S. Attorney’s Office for the Southern District of New York, and law enforcement agencies of approximately 16 foreign nations working under the umbrella of Europol’s European Cybercrime Centre (EC3) and Eurojust.  This action follows the arrest on Nov. 5, 2014, of Blake Benthall, aka “Defcon,” for charges brought in the Southern District of New York for his alleged role in operating the Silk Road 2.0 website.  This action constitutes the largest law enforcement action to date against criminal websites operating on the “Tor” network. 

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, FBI Executive Assistant Director Robert Anderson and Executive Associate Director Peter Edge of Homeland Security Investigations (HSI) made the announcement. 

“It is a plain fact that criminals use advanced technology to commit their crimes and conceal evidence – and they hide behind international borders so they can stymie law enforcement,” said Assistant Attorney General Caldwell.  “But the global law enforcement community has innovated and collaborated to disrupt these ‘dark market’ websites, no matter how sophisticated or far-flung they have become.” 

“As illegal activity online becomes more prevalent, criminals can no longer expect that they can hide in the shadows of the ‘dark web,’” said U.S. Attorney Bharara.  “We shut down the original Silk Road website and now we have shut down its replacement, as well as multiple other ‘dark market’ sites allegedly offering all manner of illicit goods and services, from firearms to computer hacking.  In coordination with domestic and international law enforcement agencies, we will continue to seize websites that promote illegal and harmful activities, and prosecute those who create and operate them.” 

“Working closely with domestic and international law enforcement, the FBI and our partners have taken action to disrupt several websites dedicated to the buying and selling of illegal drugs and other unlawful goods,” said FBI Executive Assistant Director Anderson.  “Combating cyber criminals remains a top priority for the FBI, and we continue to aggressively investigate, disrupt, and dismantle illicit networks that pose a threat in cyberspace.”

“Underground websites such as Silk Road and Silk Road 2 are like the Wild West of the Internet, where criminals can anonymously buy and sell all things illegal,” said HSI Associate Director Edge.  “We will continue to use all of our resources and work closely with our U.S. and international law enforcement partners to shut down these hidden black market sites, and hold criminals accountable who use anonymous Internet software to peddle their illegal activities.”

According to public documents, the seizure operation targeted the Silk Road 2.0 website and more than 400 hidden services related to dozens of other “dark market” websites that are only accessible to operating on what is known as “The Onion Router” or “Tor” network, a part of the Internet designed to make it practically impossible to physically locate the computers hosting or accessing websites on the network.  These sites were all operating online black markets, openly advertising on their home pages and offering to sell a variety of illicit goods and services to customers in the United States and elsewhere.  The advertised goods and services included, among other things: illegal narcotics; firearms; stolen credit card data and personal identification information; counterfeit currency; fake passports and other identification documents; and computer-hacking tools and services. 

The “dark market” websites were designed to facilitate illicit commerce by providing anonymity to users.  The sites were only accessible to users of the Tor anonymizing network.  The sites also accepted payments for their illicit goods and services in bitcoin or similar virtual currency designed to be as anonymous.

The operation involved the seizure of over 400 Tor website addresses – known as “.onion” addresses – as well as the servers hosting them.  Examples of the websites seized in the operation include:

• “Pandora” (pandora3uym4z42b.onion), “Blue Sky” (blueskyplzv4fsti.onion), “Hydra” (hydrampvvnunildl.onion), and “Cloud Nine” (xvqrvtnn4pbcnxwt.onion), all of which were dark markets similar to Silk Road 2.0, offering an extensive range of illegal goods and services for sale, including drugs, stolen credit card data, counterfeit currency, and fake identity documents.

• “Executive Outcomes” (http://iczyaan7hzkyjown.onion), which specialized in firearms trafficking, with offerings including assault rifles, automatic weapons, and sound suppressors.  The site stated that it used “secure drop ship locations” throughout the world so that “anonymity [was] ensured” throughout the shipping process, and that all serial numbers from the weapons it sold were “remove[d] . . . and refill[ed] with metal.”

• “Fake Real Plastic” (http://igvmwp3544wpnd6u.onion), which offered to sell counterfeit credit cards, encoded with “stolen credit card data” and “printed to look just like real VISA and Mastercards.”  The cards were “[g]uaranteed to have at least $2500 left on [the] credit card limit” and could be embossed with “any name you want on the card.” 

• “Fake ID” (http://23swqgocas65z7xz.onion), which offered fake passports from a number of countries, advertised as “high quality” and having “all security features” of original documents.  The site further advertised the ability to “affix almost all kind of stamps into the passports.” 

• “Fast Cash!” (http://5oulvdsnka55buw6.onion) and “Super Notes Counter” (http://67yjqewxrd2ewbtp.onion), which offered to sell counterfeit Euros and U.S. dollars in exchange for Bitcoin.

This ongoing investigation is being conducted by the FBI and its New York Special Operations and Cyber Branch, along with its Washington, Philadelphia and Indianapolis Field Offices, and by HSI and its Cyber Crimes Center and Chicago-O’Hare Field Office, with assistance from Drug Enforcement Administration’s (DEA) New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the Internal Revenue Service, the New York City Police Department, HSI, the New York State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Secret Service, the U.S. Marshals Service, the Office of Foreign Assets Control, and the New York Department of Taxation.  The law enforcement authorities of Bulgaria, Czech Republic, Finland, France, Germany, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Netherlands, Romania, Spain, Sweden, Switzerland, and the United Kingdom, whose actions have been coordinated through Eurojust and Europol’s EC3, provided substantial assistance.  

The Criminal Division’s Computer Crime and Intellectual Property, Organized Crime and Gang, and Narcotic and Dangerous Drug Sections and the U.S. Attorney’s Office for the Southern District of New York are prosecuting these cases.  Substantial assistance was provided by the U.S. Attorneys’ Offices for the District of Columbia, the Eastern District of Washington, the Eastern District of Louisiana, the Western District of New York, the Northern District of Texas, and the Northern District of Georgia.  The Criminal Division’s Office of International Affairs and Asset Forfeiture and Money Laundering Section provided substantial assistance. 

The department today announced a settlement with Flakeboard America Limited; its parent companies, Celulosa Arauco y Constitución S.A. and Inversiones Angelini y Compañía Limitada; and SierraPine.  The settlement requires the companies to pay a combined $3.8 million in civil penalties for violating the Hart–Scott–Rodino (HSR) Act of 1976.  In addition, for violating Section 1 of the Sherman Act, Flakeboard must disgorge $1.15 million in illegally obtained profits and both Flakeboard and SierraPine must establish antitrust compliance programs and agree to certain restrictions. 

The settlement resolves the department’s allegations that Flakeboard, Arauco and SierraPine engaged in illegal premerger coordination while Flakeboard’s proposed acquisition of three SierraPine mills was under antitrust review by the Department of Justice. 

Flakeboard and SierraPine abandoned the proposed acquisition on Sept. 30, 2014, after the department expressed concerns about the transaction’s likely anticompetitive effects in the production of medium-density fiberboard (MDF).  MDF is a manufactured wood product widely used in furniture, kitchen cabinets, and decorative mouldings.

The department today filed, in U.S. District Court for the Northern District of California, a civil antitrust complaint alleging violations of the HSR Act (Section 7A of the Clayton Act) and Section 1 of the Sherman Act.  At the same time, the department filed an agreement that, if approved by the court, would resolve the lawsuit. 

“Companies proposing to merge must remain separate and independent during the government’s investigation,” said Bill Baer, Assistant Attorney General of the Department of Justice’s Antitrust Division.  “These two competitors did not.  Instead they closed a plant and allocated customers when they should have been competing vigorously.  As a result both companies are paying substantial civil penalties and Flakeboard is being forced to surrender the ill-gotten profit it gained from violating the antitrust laws.”

According to the complaint, before the proposed acquisition, SierraPine operated particleboard mills in Springfield, Oregon, and Martell, California, that competed directly with Flakeboard’s particleboard mill in Albany, Oregon.  Particleboard is an unfinished wood product that is widely used in countertops, shelving, low-end furniture, and other finished products.  The Springfield and Martell mills were included in the proposed acquisition along with a third SierraPine mill that produced MDF.  The complaint alleges that after announcing the proposed acquisition on Jan. 14, 2014, and before the expiration of the HSR Act’s mandatory premerger waiting period, Flakeboard, Arauco, and SierraPine illegally coordinated to close SierraPine’s particleboard mill in Springfield, Oregon, and move the mill’s customers to Flakeboard.  This unlawful coordination led to the permanent shutdown of the Springfield mill on March 13, 2014, and enabled Flakeboard to secure a significant number of Springfield’s customers for its Albany mill.  The defendants’ conduct constituted an illegal agreement to restrain trade in violation of Section 1 of the Sherman Act, and prematurely transferred operational control, and therefore beneficial ownership, of SierraPine’s business to Flakeboard in violation of the HSR Act.

The HSR Act requires companies planning acquisitions or mergers that meet certain thresholds to file premerger notification documents with the department and the Federal Trade Commission.  The HSR Act also requires that the merging parties observe a mandatory waiting period before proceeding with the transaction.  If the government determines that a transaction violates the antitrust laws, it may seek to block that transaction before the waiting period expires.  Each party is subject to a maximum civil penalty of $16,000 per day for each day they violate the HSR Act.

The complaint alleges that the defendants’ HSR Act violation occurred from January 17, 2014, when Flakeboard and SierraPine began coordinating on the closure of the Springfield mill, until the expiration of the waiting period on Aug. 27, 2014.  The companies cooperated with the investigation by voluntarily providing the department with evidence of their unlawful premerger conduct, which was a significant factor in the department’s decision to reduce the maximum HSR penalty.  The $1.15 million in disgorgement under the Sherman Act represents a reasonable approximation of the ill-gotten profit Flakeboard received as a result of the parties’ coordination to close Springfield and move the mill’s customers to Flakeboard. 

Flakeboard is a Delaware corporation with its U.S. headquarters in Fort Mill, South Carolina.  Flakeboard’s parent company is Celulosa Arauco y Constitución (Arauco), which is held by Inversiones Angelini y Compañía Limitada, a Chilean corporation headquartered in Santiago, Chile, and the ultimate parent entity named on the HSR filing.

SierraPine is a California limited partnership headquartered in Roseville, California. 

As required by the Tunney Act, the proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Peter Mucchetti, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 4100, Washington, D.C. 20530.  At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed final judgment upon finding that it is in the public interest.

Flakeboard Complaint

Flakeboard Explanation

Flakeboard Competitive Impact Statement

Flakeboard Proposed Final Judgement

Flakeboard Stipulation

A former contractor for the U.S. Navy Military Sealift Command (MSC) and a co-founder of a Chesapeake, Virginia, government contracting company were sentenced today for their roles in a scheme to bribe and provide illegal gratuities to public officials to secure lucrative military contracts.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Office, Executive Assistant Director Charles T. May Jr. of the Naval Criminal Investigative Service (NCIS), and Special Agent in Charge Robert E. Craig, Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office made the announcement.  United States District Judge Rebecca Beach Smith of the Eastern District of Virginia imposed the sentences.

Scott B. Miserendino Sr., 55, of Stafford, Virginia, and Timothy S. Miller, 58, of Chesapeake, Virginia, were sentenced to serve 96 months in prison and 24 months in prison, respectively.  Miserendino was also ordered to forfeit $212,000 and Miller was ordered to forfeit $167,000.  Miller was also ordered to pay a fine of $25,000.  In August 2014, Miserendino pleaded guilty to one count of conspiracy to commit bribery and one count of bribery, and Miller pleaded guilty to providing illegal gratuities to Miserendino and Kenny E. Toy, the former Afloat Programs Manager for the N6 Command, Control, Communication, and Computer Systems Directorate. 

According to admissions in his plea agreement, Miserendino was a government contractor at the MSC, which is the leading provider of transportation for the U.S. Navy.  In that position, Miserendino worked closely with Toy, who exercised substantial influence over the MSC contracting process.  In November 2004, Miserendino and Toy initiated a bribery scheme that spanned five years, involved multiple co-conspirators, including two companies, and resulted in Miserendino and Toy receiving more than $265,000 in cash, among other things of value, in exchange for official acts in connection with the award of MSC contracts.

Specifically, Miserendino and Toy solicited cash from co-conspirators, including a $50,000 cash payment from Miller and his business partner, Dwayne A. Hardman, to influence the award of government contracts.  Miserendino admitted that he and Toy also accepted other things of value in exchange for official acts, including a vacation rental, laptop computers, flat screen televisions, a football helmet signed by Troy Aikman, a wine refrigerator and softball bats.

According to Miller’s admissions, during the scheme, his company received approximately $2.5 million in business from the MSC, despite its limited record of past performance in the industry.  Miserendino and Toy also directed $3 million in business from MSC to another company run by other co-conspirators.

After the cash payments were delivered, Miller admitted that he directed the creation of a false promissory note disguising the illegal gratuities as a personal loan to another individual.  Miserendino also admitted to engaging in a scheme to conceal his criminal activity by arranging for more than $85,000 to be paid to Hardman in an attempt to dissuade him from reporting the bribery scheme to law enforcement authorities.

Earlier this year, five other individuals pleaded guilty and were sentenced in connection with the bribery scheme: 

• Toy pleaded guilty to bribery and was sentenced to eight years in prison and ordered to forfeit $100,000;

• Hardman pleaded guilty to bribery and was sentenced to eight years in prison and ordered to forfeit $144,000;

• Michael P. McPhail pleaded guilty to conspiracy to commit bribery and was sentenced to three years in prison and ordered to forfeit $57,000;

• Roderic J. Smith pleaded guilty to conspiracy to commit bribery and was sentenced to four years in prison and ordered to forfeit $175,000; and

• Adam C. White pleaded guilty to conspiracy to commit bribery and was sentenced to two years in prison and ordered to forfeit $57,000.

The case was investigated by the FBI, NCIS and DCIS, and prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie of the Eastern District of Virginia.

Former Stone County Arkansas Deputy and jail administrator, Randel Branscum, 54, and two former inmates at the Stone County Jail, Matthew McConniel, 42, and James Beckham, 34, have been indicted on charges of conspiracy to violate the rights of inmates at the jail and deprivation of rights under color of law, the Justice Department announced.  The indictments were unsealed on Nov. 6, 2014.

The indictment alleges that on or about Sept. 19, 2011, Branscum conspired with McConniel and Beckham to have inmates at the Stone County Jail physically assaulted.  Branscum, in his capacity as jail administrator, ordered two inmates be transferred into McConniel and Beckham’s cell.  Once the inmate transfer had been completed, McConniel and Beckham assaulted one of the inmates, causing bodily injury to him.        

If convicted of both counts in the indictment, each defendant faces a maximum statutory sentence of 20 years in prison.

An indictment is merely an accusation, and the defendants in this case are presumed innocent unless proven guilty.

This case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Trial Attorneys Henry Leventis and Samantha Trepel of the Civil Rights Division.

A Marion, Ohio, man was sentenced yesterday in U.S. District Court for the Southern District of Ohio to serve 12 months and one day in prison, the Justice Department and Internal Revenue Service (IRS) announced.

Joel Field, 58, was also sentenced to serve four months in a halfway house and four months of home confinement, to pay $349,778 in restitution and a $4,000 fine, and to serve three years of supervised release by U.S. District Judge Edmund A. Sargus Jr.  Field pleaded guilty to tax evasion in May. 

Field was one of four businessmen involved in the development, operation and ownership of primarily Cadillac Ranch restaurants in Ohio and elsewhere.  Field’s brother, Jon B. Field, of Dublin, Ohio, and his accountant, Larry Couchot, of Dayton, were sentenced to prison by Judge Sargus for their tax crimes earlier this year.

In May 2014, Field pleaded guilty to evading payment of his federal income taxes for the years 1997 through 2001.  According to court documents, when the IRS attempted to collect the outstanding amount of taxes owed by Field, which was in excess of $140,000, Field misled the IRS by failing to report assets and income and by submitting false information regarding foreclosure proceedings.  Further, according to documents filed with the court, Field transferred assets in an effort to conceal those assets from the IRS.  Field also filed false federal income tax returns for the years 2006 through 2009 wherein he failed to report over $620,000 in income that he earned through his companies.          

The case was investigated by the IRS-Criminal Investigation and is being handled by Trial Attorney Richard M. Rolwing for the Justice Department’s Tax Division. 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.  Additional information about tax fraud schemes to watch out for may be found on the IRS-Criminal Investigation website.

The Department of Justice has filed a civil forfeiture complaint made public late yesterday seeking the forfeiture of $106,488.31 in allegedly laundered funds traceable to a $2 million bribe payment made by a Canadian energy company to Chad’s former Ambassador to the United States and Canada and his wife. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Assistant Director Joseph S. Campbell of the FBI’s Criminal Investigative Division made the announcement.

From 2004 to 2012, Mahamoud Adam Bechir, 49, served as Chad’s Ambassador to the United States and Canada.  According to the forfeiture complaint, Bechir agreed to use his position to influence the award of oil development rights in Chad in exchange for $2 million and other valuable interests from Griffiths Energy International Inc., a Canadian company.  In order to conceal the bribe, Bechir and his wife, Nouracham Niam, 44, allegedly entered into a series of agreements with Griffiths Energy that provided for the payment of a $2 million “consulting fee” if the company secured the oil rights in Chad.  After securing these oil rights in February 2011, Griffiths Energy allegedly transferred $2 million to an account located in Washington, D.C. held by a shell company created by Niam.  In 2013, Griffiths Energy pleaded guilty in Canadian court to bribing Bechir.

The complaint further alleges that, after commingling the bribe payment with other funds and laundering these funds through U.S. bank accounts and real property, Bechir transferred $1,474,517 of the criminal proceeds traceable to the bribe payment to his account in South Africa, where he is now serving Chad’s Ambassador to South Africa.  The current action seeks forfeiture of $106,488.31, which is the current balance of Bechir’s accounts in South Africa.  Those funds have been seized pursuant to the complaint unsealed today.  The Department of Justice is also seeking additional assets from Bechir and Niam.

The investigation was conducted by the FBI.  The case is being handled by Trial Attorney Nalina Sombuntham of the Criminal Division’s Asset Forfeiture and Money Laundering Section.

This case was brought under the Kleptocracy Asset Recovery Initiative by a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, return those proceeds to benefit the people harmed by these acts of corruption and abuse of office.  Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov.

Bechir Motion to Vacate

Bechir Attachment A

Bechir Attachment B

Bechir Complaint

A Puerto Rican man has pleaded guilty to conspiring with corrupt police officers to commit a July 2012 robbery of a home in Bayamon, Puerto Rico, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico.

Fernando Reyes-Rojas, 43, of the Dominican Republic, pleaded guilty on Nov. 6, 2014, to violations of robbery, civil rights, narcotics, and firearms laws.  Reyes-Rojas is the sixth defendant convicted in connection with the July 2012 robbery.  Reyes-Rojas’s sentencing is scheduled for Feb. 4, 2015.

According to court documents, Reyes-Rojas, a civilian, agreed with at least three corrupt Police of Puerto Rico (POPR) officers and others to participate in a home robbery to steal money and narcotics. 

On July 14, 2012, Reyes-Rojas joined the corrupt police officers and others in robbing a house in Bayamon.  The men entered the house, identified themselves as police, and falsely claimed they were executing a search warrant.  After searching the property and the people who were present, they stole money and cocaine.  Reyes-Rojas sold the cocaine and paid the officers for their role in the robbery. 

The corrupt police officers and a second civilian previously pleaded guilty for their participation in the July 2012 robbery.  On Oct. 7, 2014, Jorge Fernandez-Aviles, 49, a POPR sergeant, pled guilty to robbery and firearms charges. On Oct. 3, 2014, David Figueroa, a civilian, pled guilty to robbery and civil rights charges.  Alexander Mir-Hernandez, 40, a POPR officer, also pleaded guilty to one count of false statements for lying to federal agents about his role in the July 2012 robbery and to a civil rights crime for an unrelated December 2013 robbery.  Sentencing for all three is scheduled for Jan. 9, 2015.  Pedro Lopez-Torres, 35, and Luis Ramos-Figueroa, 38, both POPR officers, were each charged by information on June 25, 2014, for their roles in the July 2012 robbery and other crimes.  Lopez- Torres and Ramos-Figueroa pleaded guilty before U.S. District Judge José A. Fusté the same day. 

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

Attorney General Eric Holder announced today that Stuart Delery, the Acting Associate Attorney General, will serve as the Department of Justice’s designee as Co-Chair of the President’s Task Force on Puerto Rico.

“Stuart Delery is an exceptional public servant who will continue the work of his predecessors, Tom Perrelli and Tony West, as Co-Chair of the President’s Task Force on Puerto Rico,” said Attorney General Holder.  “Stuart demonstrated his commitment to strengthen our nation’s security and to protect public health and safety in his prior role as Assistant Attorney General for the Civil Division.  Stuart will serve the Task Force – and the people of Puerto Rico – well.”

“The ongoing work of the Task Force reflects the Administration’s – and the Department of Justice’s – commitment to the people of Puerto Rico,” said Associate Attorney General Delery.  “I am pleased to have the opportunity to contribute to the Task Force, and look forward to working with my federal colleagues and Commonwealth officials in Puerto Rico and Washington.”

 The President’s Task Force on Puerto Rico, which is co-chaired by the Attorney General’s designee and the White House Director of Intergovernmental Affairs, was created by President Bill Clinton to examine Puerto Rico’s political status and to identify a process by which the people of Puerto Rico could express their views on the subject.  The Task Force continued to address these issues through the Administration of President George Bush.  President Barack Obama expanded the Task Force’s scope and directed it to recommend policies to promote job creation, education, health care, clean energy, and economic development on the island.  The Task Force published its report and recommendations to the President and Congress in March of 2011, and its efforts to implement the recommendations continue today.

***MEDIA ADVISORY***

COPS Office to Hold Media Availability on Fair and Impartial Policing on Friday, Nov. 7, 2014

The Office of Community Oriented Policing Services (COPS Office) is holding a Fair and Impartial Policing training on Thursday, Nov. 6, and Friday, Nov. 7, with local law enforcement as part of the Collaborative Reform Initiative and technical assistance taking place in St. Louis County.  The two-day Fair and Impartial Policing training will include command-level law enforcement leadership from St. Louis County, St. Louis Metropolitan, Missouri Highway Patrol and Ferguson, Missouri, Police Departments, as well as local community members.  The training is closed press; however, there will be a media availability on Friday at the conclusion of the training session.

This latest effort to build trust and strengthen the relationship between law enforcement and the communities they serve is the first of several regional collaborative reform trainings on law enforcement strategies and best practices.  Under the COPS Collaborative Reform Initiative for Technical Assistance (CRI-TA), the COPS Office provides intensive, comprehensive assessment and support to agencies experiencing significant systemic challenges.  The Fair and Impartial Policing training is specifically designed to enhance officers' understanding of how bias — including implicit or unconscious bias — affects officer behavior, and the impact that biased policing has on officers and the community.  Subsequent training sessions will focus on educating first-line supervisors and police trainers as a way to integrate these concepts into day-to-day police practices.

This training session will be led by Dr. Lorie Fridell, a national expert on racially biased policing, and Noble Wray, a retired Chief of Police from the Madison, Wisconsin, Police Department.

WHO: Ronald L. Davis, Director of the COPS Office at the U.S. Department of Justice

Dr. Lorie Fridell, Fair and Impartial Policing technical assistance expert and associate professor at the University of South Florida’s Department of Criminology

Noble Wray, Fair and Impartial Policing technical assistance expert and retired police chief for the Madison, Wisconsin, Police Department

WHAT: Media Availability on Fair and Impartial Policing in St. Louis County

WHEN: Friday, November 7, 2014, at 1:30 p.m. CST                       

WHERE: Maryville University-Southwest Campus, Liberty Mutual Building at 12250 Weber Hill Road, Sunset Hills, Missouri 63127

NOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials.  For additional questions, please email Kevin.s.lewis@usdoj.gov or call 202-514-2007.

Additional Background on Collaborative Reform: In August, following the shooting of Michael Brown, President Obama asked Attorney General Holder to send Director Davis to work with police officials on the ground in Ferguson to help reduce tensions and build trust.  Under the COPS CRI-TA, the COPS Office provides more intensive, comprehensive assessment and technical assistant support for agencies experiencing significant systemic challenges.  Collaborative Reform is an independent and objective means to organizational transformation through an analysis of policies, practices, training, tactics and accountability methods around key issues facing law enforcement agencies.  Along with Critical Response, Collaborative Reform has become a fundamental part of the department’s overall continuum of services to advance community policing and ensure police agencies engage in constitutional practices.  Currently, the COPS Office is engaged with several law enforcement agencies across the country, including the St. Louis County Police Department, as a way to advance widespread reform across the St. Louis region.

In a settlement with the United States, three subsidiaries of the Potash Corporation of Saskatchewan (PCS), the world’s largest fertilizer producer, will take steps to reduce harmful air emissions at eight U.S. production plants, the U.S. Environmental Protection Agency (EPA) and Department of Justice announced today.  The settlement resolves claims that these PCS subsidiaries violated the Clean Air Act when they modified facilities in ways that released excess sulfur dioxide into surrounding communities.

The settlement requires PCS Nitrogen Fertilizer, AA Sulfuric Inc., and White Springs Agricultural Chemicals Inc. to install, upgrade and operate state-of-the-art pollution reduction measures, as well as install emissions monitors at eight sulfuric acid plants across facilities in Geismar, Louisiana (one plant), White Springs, Florida (four plants), and Aurora, North Carolina (three plants).  The three companies will spend an estimated $50 million on these measures, and will pay a $1.3 million civil penalty.

“This agreement, the largest so far in our ongoing Clean Air Act enforcement efforts against sulfuric-acid producers, will ensure cleaner air for citizens across the Southeast and will send a strong signal to the industry that noncompliance has serious consequences,” said Acting Assistant Attorney General Sam Hirsch for the Department of Justice’s Environment and Natural Resources Division.

“Large industrial facilities that break the law and pollute the air will be held accountable,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “This case will bring these companies into compliance and require additional action to cut pollution to benefit communities, especially those most vulnerable to air pollution.” EPA expects the actions that the companies have agreed to take will reduce harmful emissions by over 13,090 tons per year, which includes approximately 12,600 tons per year of sulfur dioxide, 430 tons per year of ammonia and 60 tons per year of nitrogen oxide.  In the future, the companies can also retire plants to comply with the settlement.

The settlement also includes a “supplemental environmental project,” estimated to cost between $2.5 and $4 million, to protect the community around a PCS Nitrogen nitric acid plant in Geismar, Louisiana, and requires PCS Nitrogen to install and operate equipment to reduce emissions of nitrogen oxide and ammonia.  This project is part of EPA’s commitment to advancing environmental justice by reducing the disproportionate environmental impacts on communities near industrial facilities – in this instance, by reducing fine particulates that can aggravate respiratory disease.

Sulfur dioxide, the predominant pollutant emitted from sulfuric acid plants, has numerous adverse effects on human health and is a significant contributor to acid rain, smog and haze.  Sulfur dioxide—along with nitrogen oxide—is converted in the air to particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death.

This settlement is part of EPA’s national enforcement initiative to control harmful emissions from large sources of pollution, which includes acid production plants, under the Clean Air Act’s Prevention of Significant Deterioration requirements.  It is the 10th settlement reached under EPA’s National Acid Manufacturing Plant Initiative and the 7th settlement addressing pollution from sulfuric acid plants.  Today’s settlement covers more sulfuric acid production capacity—roughly 24,000 tons per day or approximately 14 percent of total U.S. capacity—than all previous sulfuric acid settlements under this initiative combined.

The settlement also resolves alleged violations based on Louisiana law at the Geismar, Louisiana, facility, and the Louisiana Department of Environmental Quality will receive $350,000 of the $1.3 million penalty.

The settlement was lodged with the U.S. District Court for the Middle District of Louisiana and is subject to a 30-day public comment period and final court approval.

John Greene, 70, a former captain at the Gallup-McKinley Adult Detention Center (GMADC), entered a guilty plea to charges related to the sexual assaults of female inmates in his custody.  Greene pleaded guilty to three counts of violating each of the victim’s right to bodily integrity by engaging in sexual contact against their will.  Greene also pleaded guilty to two counts of making material false statements to the FBI when he denied both touching the breasts of one female inmate and having personal contact with another female inmate.

According to court documents, Greene admitted that in his capacity as a captain at GMADC, he had regular access to female inmates when he accompanied them to court hearings, transported them to other facilities, and had them brought to his office.  This regular access gave him the opportunity to engage in unwanted sexual contact with three different women in December 2008 and January 2009.  Greene committed these acts, knowing it was wrong, against the law and without the victims’ consent, but he did so anyway for his own gratification.

Greene also admitted that he lied to the FBI about his conduct on two occasions.

Under the terms of the plea agreement, Greene will be sentenced to five years of probation.  As part of the plea agreement, Greene will forfeit his law enforcement certification and must comply with sex offender registration requirements. 

A sentencing hearing has not yet been set.

This case is being investigated by the Gallup Resident Agency of the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Holland S. Kastrin for the District of New Mexico and Fara Gold of the Civil Rights Division of the U.S. Department of Justice.

Biotronik Inc. of Lake Oswego, Oregon, has agreed to pay the United States $4.9 million to resolve allegations made under the False Claims Act that the company made various improper payments to induce physicians to use devices that it manufactured and sold, the Justice Department announced today.  

“When medical device manufacturers make improper payments to physicians, they encourage medical decision-making based on financial gain rather than the best interests of patients,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “Today’s resolution demonstrates the Department of Justice’s continuing commitment to ensuring that beneficiaries of federal health care programs receive appropriate medical care.”

The settlement resolves allegations that Biotronik, through the payment of kickbacks to physicians, caused hospitals and ambulatory surgery centers to submit false claims to Medicare and Medicaid for the implantation of Biotronik pacemakers, defibrillators and cardiac resynchronization therapy devices.  Biotronik allegedly induced electrophysiologists and cardiologists practicing in Nevada and Arizona to continue using Biotronik devices, or to convert to Biotronik devices, by paying the implanting physician in the form of repeated meals at expensive restaurants and inflated payments for membership on a physician advisory board. 

“Today’s resolution of claims underscores one of the key purposes of the Anti-Kickback law – to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by illegal payments,” said U.S. Attorney Benjamin Wagner for the Eastern District of California.

The settlement announced today stems from a whistleblower complaint filed by a former Biotronik employee, Brian Sant, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the United States and to share in the proceeds of the suit.  The act permits the United States to intervene and take over the lawsuit, as it did in this case as to some of Sant’s allegations.  Sant will receive approximately $840,000 of the federal settlement. 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $23 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with Biotronik Inc. was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office for the Eastern District of California, the U.S. Department of Health and Human Services-Office of Inspector General and the FBI. 

The lawsuit is captioned United States ex rel. Sant v. Biotronik, Inc., No. 2:09-CV-03617 KJM EFB (E.D. Cal.).  The claims settled by this agreement are allegations only, and there has been no determination of liability.

Political consultant Thomas Lindenfeld, 59, of Washington, D.C., pleaded guilty today in the Eastern District of Pennsylvania to conspiracy to commit wire fraud for his role in a fraud and corruption scheme related to illegal campaign contributions.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania, Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Field Office and Acting Special Agent in Charge Richard Gross of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement. 

According to admissions in his plea agreement, Lindenfeld agreed to route an illegal $1 million political contribution for “Elected Official A” during a 2007 campaign for elected office. The contribution was in the form of a loan routed through Lindenfeld’s political consulting firm, LSG Strategic Services Corporation (LSG).  When the campaign donor attempted to collect on the outstanding balance of the $1 million loan, however, Lindenfeld and his co-conspirators, at the direction of Elected Official A, engaged in a complicated series of transactions using federal grant money and monies from Sallie Mae’s charitable arm illegally to repay the loan.  These transactions were routed through several entities, including LSG, and were all falsely labeled as payments for services that were never actually rendered. 

Lindenfeld admitted that, in exchange for the work he had done on the campaign, which included concealing the illegal campaign contribution, Elected Official A agreed to use his elected position to steer federal funding to Lindenfeld’s proposed environmental advocacy group, Blue Guardians.  Lindenfeld further admitted that he created Blue Guardians at the direction of Elected Official A for the purpose of receiving the federal funding.

According to Lindenfeld, Elected Official A advocated for $15 million in federal funding for Blue Guardians as a reward for Lindenfeld’s services.  Five hundred thousand dollars was approved in 2009 as an earmark through the National Oceanic and Atmospheric Administration (NOAA).  Lindenfeld admitted, however, that the Blue Guardians did not exist in December 2009, and that he only created an email address, articles of incorporation, and a tax identification number for Blue Guardians in April 2010.  After receiving questions from NOAA and members of the press, Lindenfeld declined the funding, stating that he and Elected Official A decided it could be better spent on the oil spill in the Gulf.  NOAA did not disburse the $500,000 to Lindenfeld or Blue Guardians.  

U.S. District Court Judge Harvey Bartle III scheduled a sentencing hearing for March 25, 2015.

The case is being investigated by the FBI and the IRS-CI with assistance provided by NASA’s Office of Inspector General and the Department of Commerce’s Office of Inspector General.  This case is being prosecuted by Assistant U.S. Attorney Paul L. Gray of the Eastern District of Pennsylvania and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section.

A Philadelphia man was sentenced today in the Eastern District of Pennsylvania to serve 40 years in prison for his role in the retaliatory firebombing that killed six members of a federal witness’s family, including four children.   

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Division made the announcement.   

Lamont Lewis, 38, of Philadelphia, pleaded guilty in 2011 for his role in the firebombing of Eugene Coleman’s family home in retaliation for Coleman’s cooperation with law enforcement.  Lewis also pleaded guilty to an additional five murders murder-for-hire, and drug trafficking charges, and agreed to testify against Kaboni Savage and his cousin, Robert Merritt, who assisted Lewis in carrying out the firebombing.  U.S. District Judge R. Barclay Surrick of the Eastern District of Pennsylvania imposed the sentence after considering Lewis’s cooperation in the prosecution of Savage and others.

According to Lewis’s testimony at trial, at Savage’s direction, Lewis and Merritt firebombed the Coleman family home in retaliation for Coleman’s testimony against Savage.  Lewis admitted that he spoke to Savage in the evening hours of Oct. 8, 2004, at which time Savage asked for a favor and told Lewis that his sister, Kidada Savage, would explain the plan after the phone call.  Shortly thereafter, Kidada Savage advised Lewis of the plan to firebomb the Coleman residence, and drove Lewis to the location to identify the house.  In the early morning hours of Oct. 9, 2004, Lewis contacted Merritt and explained the plan to him.  Lewis and Merritt filled up two gas cans while en route to the Coleman residence.  Then, while Lewis gained entry and fired warning shots into the residence, Merritt threw a gas can with a lit cloth fuse, and then a second gas can, into the occupied Philadelphia row house.  Six people, including four children ranging in age from 15 months to 15 years, were killed in the fire. 

Co-defendants Kaboni Savage,Kidada Savage, and Merritt were also convicted for their roles in the firebombing at the May 2013 trial.  Kaboni Savage, who was also convicted of other crimes, was sentenced to death for 12 counts of murder in aid of racketeering.  Kidada Savage and Robert Merritt were sentenced to life in prison.  

The case was investigated by the FBI, the Internal Revenue Service – Criminal Investigation, the Philadelphia Police Department, the Philadelphia District Attorney’s Office, and the Maple Shade, New Jersey Police Department.  The United States Bureau of Prisons, the United States Marshals Service, and the Philadelphia / Camden High Intensity Drug Trafficking Area Task Force also assisted in the investigation.  The case is being prosecuted by Trial Attorney Steve Mellin of the Criminal Division’s Capital Case Section and Assistant U.S. Attorneys David E. Troyer and John M. Gallagher of the Eastern District of Pennsylvania.           

The owner and administrator of two Miami home health care companies was sentenced today to serve 80 months in prison for her participation in a $74 million Medicare fraud scheme.

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

Elsa Ruiz, 45, of Miami, pleaded guilty in July 2014 to one count of conspiracy to commit health care fraud.  In addition to the prison sentence, Ruiz was ordered to pay $45 million in restitution.

Ruiz was an owner and operator of Professional Home Care Solutions Inc. and an administrator of LTC Professional Consultants Inc., both of which purported to provide home health and therapy services to Medicare beneficiaries.  According to admissions during her plea hearing, Ruiz and her co-conspirators operated LTC and Professional Home Care for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or were not provided.

According to her admissions, Ruiz’s primary role in the scheme was to negotiate and pay kickbacks to patient recruiters and to otherwise oversee the schemes operating out of LTC and Professional Home Care.  Specifically, Ruiz and her co-conspirators paid kickbacks to patient recruiters for the referral of patients and for the provision of prescriptions, plans of care, and certifications for medically unnecessary therapy and home health services.  Ruiz and her co-conspirators used these prescriptions, plans of care, and medical certifications to fraudulently bill the Medicare program for home health care services.

From approximately January 2006 to June 2012, LTC and Professional Home Care submitted approximately $74 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $45 million on those claims.

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

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

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

Two men have been convicted for their roles in a sophisticated conspiracy to distribute child pornography to a secret, world-wide network over the Internet.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Josh J. Minkler of the Southern District of Indiana and Acting Inspector in Charge Troy Raper of the United States Postal Inspection Service made the announcement.

John D. Gries 48, of Bayshore, New York, and James McCullars 56, of Huntsville, Alabama, were found guilty late Nov. 4, 2014, following a six-day jury trial of conspiracy to distribute and receive child pornography, conspiracy to advertise child pornography and engaging in a child exploitation enterprise in connection with a long-running, world-wide child exploitation enterprise.

According to testimony at trial, the enterprise began in 2000 and operated until April 2012.  Gries and McCullars ran various online chat rooms available exclusively to members of the conspiracy and protected by password.  These chat rooms were dedicated to the distribution, receipt and possession of child pornography, and were used by members to discuss and promote the sexual exploitation of children.

According to evidence at trial, as well as admissions by other defendants, today’s defendants and many of the other members of the conspiracy amassed large collections of materials depicting child exploitation.  The co-conspirators sought to expand their collections using online chat rooms and a number of online servers, and to evade law enforcement through the use of sophisticated data encryption software.  Dozens of children around the world have been identified as victims of abuse during this investigation. 

Other defendants charged as part of this investigation who have pleaded guilty or been found guilty include:

John Edwards, 62, of Indianapolis

Thomas Vaughn, 45, of Anderson, Indiana

John Rex Powell, 43, of Fort Myers, Florida

Donald Printup, 36, of Niagara Falls, New York

Michael Fredette, 46, of Waterford, New York

Robert Guillen, 43, of Wesley Chapel, Florida

David Bebetu, 51, of Agoura Hills, California

Stephen Harvey Dault, 48, of McKinney, Texas

Rick Ricardo Leon, 53, of Arlington, Virginia

Edwards, Fredette and Dault have been sentenced to 17.5 years in prison, 27 years in prison, and 17 years in prison respectively.

Powell was previously convicted as part of an investigation and prosecution of two Australian citizens who allegedly orchestrated the sexual abuse of their adopted son at the hands of men around the world.  He is awaiting sentencing in that matter. 

This case was the result of a collaborative investigation led by the U.S. Postal Inspection Service assisted by the Indiana Internet Crimes Against Children Task Force and the Department of Justice’s High Technology Investigative Unit, as part of Project Safe Childhood.  This case is being prosecuted by Trial Attorney Amy Larson of the Criminal Division’s Child Exploitation and Obscenity Division and Senior Litigation Counsel Steven D. DeBrota of the Southern District of Indiana.

Led nationally by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.