District Not Recorded

Former Hamilton County Deputy Sheriff Willie Greer, 33, was indicted yesterday by a federal grand jury in Chattanooga, Tennessee, for sexually assaulting a woman while he was on duty on Jan. 5, 2014, the Justice Department announced. 

Greer was charged with a civil rights violation for sexually assaulting the victim, which violated her constitutional due process rights to bodily integrity, kidnapping, carrying a firearm during and in relation to the sexual assault and possessing a firearm in further of the crime. 

If convicted, the defendant faces a maximum penalty of life imprisonment and a fine of not more than $250,000.  An indictment is a formal accusation of criminal conduct, not evidence of guilt.  The defendant is presumed innocent unless and until proven guilty.

This case was investigated by the FBI and the Hamilton County Sheriff’s Office and is being prosecuted by Assistant United States Attorney James Brooks of the Eastern District of Tennessee and Civil Rights Division Trial Attorney Saeed Mody. 

A national of Eritrea and citizen of the United Kingdom pleaded guilty today to smuggling undocumented immigrants from Eritrea and Ethiopia into the United States.          

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

According to his plea agreement, Habtom Merhay, 47, who operated primarily from his residence in Dubai, orchestrated the unlawful smuggling of up to 99 undocumented African immigrants to the United States for profit.  Specifically, Merhay admitted that in exchange for fees up to $14,000, he smuggled immigrants into the United States by providing fraudulent travel documents, purchasing airline tickets for travel to South and Central America, and then coordinating with a network of smugglers to facilitate the travel by air, land and water across Central America and Mexico and into the United States. 

Merhay pleaded guilty today before U.S. District Judge Reggie B. Walton of the District of Columbia, and is scheduled for sentencing on Dec. 16, 2014.  Merhay was in the custody of Moroccan authorities between his arrest in Marrakech, Morocco, in August 2013 and extradition to the United States on April 25, 2014.    

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

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

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WASHINGTON – Los Estados Unidos le pidieron a un tribunal federal en Filadelfia que prohibiera en forma permanente a Denise Miller Almanza y su empresa, Denise's Centro de Servicios, PC, preparar declaraciones de impuestos federales para terceros, anunció hoy el Departamento de Justicia.  De acuerdo con la demanda, Almanza declaró indebidamente ingresos de sus clientes inferiores a los reales o reclamó indebidamente créditos tributarios en sus declaraciones, haciendo que los clientes recibieran reintegros de impuestos indebidos o reintegros por valores superiores a los que tenían derecho.  Almanza y su empresa prepararon más de 14,000 declaraciones de impuestos federales desde 2010, de acuerdo con la demanda.

La demanda, entablada en el Tribunal Federal de Distrito para el Distrito Este de Pensilvania, alega que Almanza reclamó indebidamente crédito tributario adicional por hijo en las declaraciones de impuesto a la renta de clientes, lo que permitió que sus clientes recibieran, en promedio $2,900 de beneficios indebidos por declaración de impuestos.  En total, la demanda alega que las actividades de Almanza a lo largo de los últimos cuatro años le costaron potencialmente al Tesoro de EE.UU. millones de dólares en ingresos tributarios perdidos.

El fraude de preparación de declaraciones de impuestos es uno de los ardides de la Docena sucia de ardides tributarios de 2014 del Servicio de Impuestos Internos [Internal Revenue Service (IRS)].   El IRS tiene algunos consejos en su portal en Internet para la elección de un preparador de impuestos.   En la última década, la División de Impuestos del Departamento de Justicia ha obtenido interdictos contra cientos de preparadores de impuestos inescrupulosos.  Se puede encontrar información sobre estos casos en el portal del Departamento de Justicia.

Attorney General Eric Holder released the following statement Wednesday on the 225th anniversary of the U.S. Marshals Service:

"Today, we recognize a legacy of achievement by America's oldest federal law enforcement agency, the United States Marshals Service.  For 225 years, the Marshals Service has occupied a unique and valued position in our country's judicial system.  This nation has relied upon U.S. Marshals and their deputies at pivotal moments in our history, and each time, the men and women of this great organization have risen to the challenge.  On this anniversary, we remember their efforts in establishing order in the Wild West, in restoring a divided nation following the Civil War, in desegregating America's schools, and in enforcing civil rights legislation.

"These brave men and women continue their fight for justice today, remaining dedicated to their traditional missions of securing our courts, tracking and apprehending fugitives, detaining and transporting federal prisoners, protecting federal witnesses, and seizing criminal assets.  The agency continues to evolve technologically and strategically to meet current law enforcement challenges, while still holding true to its core values of "justice, integrity and service."  I thank these dedicated professionals for their sacrifice and commitment to justice."

A Kaysville, Utah, man was convicted Friday of three counts of tax evasion and one count of filing a false tax return, the Justice Department and Internal Revenue Service (IRS) announced. 

Jon T. McBride, who was indicted on March 27, 2013, was convicted on Friday, Sept. 19, 2014, following a jury verdict.  He faces a statutory maximum sentence of 18 years in prison and a fine of up to $1 million at his Dec. 1, 2014 sentencing before U.S. District Judge Ted Stewart.

The evidence at trial also showed that McBride prepared and filed a false U.S. individual income tax return for the year 2005, on which he failed to include approximately $109,785 in gross income received.  According to the indictment and evidence at trial, McBride willfully attempted to evade his federal income taxes for 2006 by filing a false return that failed to report more than $300,000 he received from his company, the sale of his vacation property and early retirement distributions.  McBride also willfully attempted to evade his 2007 federal income taxes by failing to file an individual federal income tax return and filing a false return for one of his nominee partnerships.  McBride again willfully attempted to evade his 2009 taxes by filing a false return that reported zero income.  Additionally, for tax years 2006, 2007 and 2009, McBride used nominees to hide and conceal his ownership in real property and partnerships.

The case was investigated by special agents of the IRS - Criminal Investigation and was prosecuted by Trial Attorney Brent Ward of the Criminal Division and Trial Attorney Andrea Kafka for the Tax Division.

The Department of Justice announced that Robert Keller, 70, pleaded guilty in the U.S. District Court for the District of Utah today to a federal civil rights crime related to interfering with the housing rights of three members of an interracial family because of the family member’s races and because the family members were living in a home while associating with an African American family member in Hurricane, Utah. 

During the plea proceedings, Keller admitted that on Dec. 30, 2013, he wrote a note to two Caucasian family members of an interracial family threatening to kill them if they did not make their African American family member leave their home.  Keller admitted that he used threats of force to willfully intimidate and interfere with the two Caucasian family members because they were occupying a dwelling while associating with their African American family member.  

“Members of our community have a constitutional right to live in their home without fear, and the department will not tolerate threats of violence that infringe on that right,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. 

"Hate based crimes have no place in America,” said Acting U.S. Attorney Carlie Christensen for the District of Utah.  “They not only hurt the individuals who are the object of such hate, but tear at the fabric of our society as a whole.  In this case, the defendant’s attempt to rid his neighborhood of an African-American member of an interracial family serves as a horrifying reminder that racial intolerance stills exists in some communities.  This conviction sends a clear message that such despicable acts will not be tolerated by this office, but will be prosecuted to the fullest extent of the law.”

Sentencing is scheduled for December 1st and the defendant faces a maximum penalty of one year in prison.

This case is being investigated by the Salt Lake City Division of the Federal Bureau of Investigation in cooperation with the Hurricane City Police Department.  It is being prosecuted by Trial Attorney Saeed Mody of the Civil Rights Division and Assistant United States Attorney Carlos Esqueda of the District of Utah.

In a speech at the Brennan Center for Justice, Attorney General Eric Holder announced today that the federal prison population has dropped by roughly 4,800 inmates since September 2013.  This represents the first time the federal inmate population has fallen, rather than risen, over the course of a fiscal year since 1980.

Moreover, Attorney General Holder announced that current Bureau of Prisons estimates project this downward trend to continue in each of the next two fiscal years.  In FY15, the inmate population is projected to drop by another 2,200 inmates.  In FY16, the population is projected to drop by 10,000 inmates - or the equivalent of six federal prisons.

“This is nothing less than historic,” said Attorney General Holder. “Clearly, criminal justice reform is an idea whose time has come.  And thanks to a robust and growing national consensus – a consensus driven not by political ideology, but by the promising work that’s underway – we are bringing about a paradigm shift, and witnessing a historic sea change, in the way our nation approaches these issues.”

While these statistics show progress at the federal level, there is similar progress at the state level.  Overall, incarceration rates have fallen by roughly 10 percent since President Obama took office, and that has occurred simultaneously with a similarly-sized reduction in crime rates.

The Attorney General’s full remarks to the law enforcement conference, as prepared for delivery appear below:

Thank you, Jim [Johnson], for those kind words; for your friendship over the many years we’ve known one another – since we served together in the Clinton Administration; and for your leadership, along with Doug Jones, as co-chair of the Brennan Center’s Blue Ribbon Panel. 

I’d also like to thank the Brennan Center’s distinguished president, my friend Michael Waldman, and your entire staff – particularly the Justice Program – for bringing us together today.  It’s an honor to take part in this important conference.  It’s a privilege to be at NYU Law School for the second time in as many weeks.  And it’s a great pleasure, as always, to be back home in New York City. 

For nearly two decades, the Brennan Center has provided indispensable leadership on issues ranging from campaign finance and voting rights to national security and equal justice.  You’ve offered rigorous research and expert guidance to policymakers at every level of government.  And with this conference – and the report you’re unveiling today – you’re taking yet another step to advance our efforts to address some of our nation’s most critical challenges – few of which are more complex, or more urgent, than the need to strengthen America’s criminal justice system and reduce our overreliance on incarceration.

As you know, we gather this afternoon just over a year after the launch of the Justice Department’s Smart on Crime initiative – a series of important changes and commonsense reforms I set in motion last August.  Already, these changes are fundamentally shifting our response to certain crime challenges – particularly low-level, nonviolent drug offenses.  And this initiative is predicated on the notion that our work as prosecutors must be informed, and our criminal justice system continually improved, by the most effective and efficient strategies available.

After all – as I’ve often said – the United States will never be able to prosecute or incarcerate its way to becoming a safer nation.  We must never, and we will never, stop being vigilant against crime – and the conditions and choices that breed it.  But, for far too long – under well-intentioned policies designed to be “tough” on criminals – our system has perpetuated a destructive cycle of poverty, criminality, and incarceration that has trapped countless people and weakened entire communities – particularly communities of color.

In recent decades, the effects of these policies – and the impact of the “truth-in-sentencing” mindset – have been dramatic.  Although the United States comprises just five percent of the world’s population, we incarcerate almost a quarter of its prisoners.  The entire United States population has increased by about a third since 1980.  But the federal prison population has grown by almost 800 percent over the same period.  Spending on corrections, incarceration, and law enforcement has exploded, consuming $260 billion per year nationwide.  And the Bureau of Prisons currently commands about a third of the Justice Department’s overall budget.

Perhaps most troubling is the fact that this astonishing rise in incarceration – and the escalating costs it has imposed on our country, in terms both economic and human – have not measurably benefited our society.  We can all be proud of the progress that’s been made at reducing the crime rate over the past two decades – thanks to the tireless work of prosecutors and the bravery of law enforcement officials across America.  But statistics have shown – and all of us have seen – that high incarceration rates and longer-than-necessary prison terms have not played a significant role in materially improving public safety, reducing crime, or strengthening communities.

In fact, the opposite is often true.  Two weeks ago, the Washington Post reported that new analysis of crime data and incarceration rates – performed by the Pew Charitable Trusts, and covering the period of 1994 to 2012 – shows that states with the most significant drops in crime also saw reductions in their prison populations.  States that took drastic steps to reduce their prison populations – in many cases by percentages well into the double digits – saw crime go down as well.  And the one state – West Virginia – with the greatest increase in its incarceration rate actually experienced an uptick in crime. 

As the Post makes clear: “To the extent that there is any trend here, it’s actually that states incarcerating people have seen smaller decreases in crime.”   And this has been borne out at the national level, as well.

Since President Obama took office, both overall crime and overall incarceration have decreased by approximately 10 percent.  This is the first time these two critical markers have declined together in more than 40 years.  And although we have a great deal of work to do – and although, last year, some states continued to record growth in their prison populations – this is a signal achievement.

We know that over-incarceration crushes opportunity.  We know it prevents people, and entire communities, from getting on the right track.  And we’ve seen that – as more and more government leaders have gradually come to recognize – at a fundamental level, it challenges our commitment to the cause of justice.

Fortunately, I can report today that we are finally moving in the right direction, at least at the federal level.  Over the past year, the federal prison population declined by roughly 4,800 inmates – the first decrease we’ve seen in many ‎decades.

Even more promising are new internal projections from the Bureau of Prisons.  In a dramatic reversal of prior reports – which showed that the prison population would continue to grow, becoming more and more costly, overcrowded, and unsafe – taking into account our new policies and trends, our new projections anticipate that the number of federal inmates will fall by just over 2,000 in the next 12 months – and by almost 10,000 in the year after.‎

This is nothing less than historic.  To put these numbers in perspective, 10,000 inmates is the rough equivalent of the combined populations of six federal prisons, each filled to capacity.  Now, these projected decreases won’t result in any prison closures, because our system is operating at about 30 percent above capacity.  But my hope is that we’re witnessing the start of a trend that will only accelerate as our Smart on Crime changes take full effect. 

Clearly, criminal justice reform is an idea whose time has come.  And thanks to a robust and growing national consensus – a consensus driven not by political ideology, but by the promising work that’s underway, and the efforts of leaders like Senators Patrick Leahy, Dick Durbin, Mike Lee, and Rand Paul – we are bringing about a paradigm shift, and witnessing a historic sea change, in the way our nation approaches these issues. 

Of course, for these changes to become permanent, we’ll need to rely on the dedication – and the leadership – of federal prosecutors in Washington and in all 94 of our United States Attorney’s Offices.  As a career prosecutor myself – and as former U.S. Attorney for the District of Columbia – I have always had the utmost confidence in, and respect for, these hardworking men and women.  And that’s why, as Attorney General, I’ve consistently advocated policies that push discretion out into the field.

The Smart on Crime initiative is in many ways the ultimate expression of my trust in the abilities – and the judgment – of our attorneys on the front lines.  And although some have suggested that recent changes in charging and sentencing policies might somehow undermine their ability to induce cooperation from defendants in certain cases, today, I want to make it abundantly clear that nothing could be further from the truth.

As I know from experience – and as all veteran prosecutors and defense attorneys surely recognize – defendant cooperation depends on the certainty of swift and fair punishment, not on the length of a mandatory minimum sentence.  Like anyone old enough to remember the era before sentencing guidelines existed and mandatory minimums took full effect, I can testify to the fact that federal guidelines attempted to systematize the kinds of negotiations that were naturally taking place anyway.  As our U.S. Attorney for the Western District of Wisconsin, John Vaudreuil, often reminds his colleagues, even without the threat of mandatory minimums, it remains in the interests of all attorneys to serve as sound advocates for their clients – and for defendants to cooperate with the government in exchange for reduced sentences.

Far from impeding the work of our prosecutors, the sentencing reforms I’ve mandated have strengthened their discretion. The contention that cooperation is somehow dependent on mandatory minimums is tied to a past at tension with the empirical present, and is plainly inconsistent with history, and with now known facts.  After all, as the Heritage Foundation observed earlier this year: “[t]he rate of cooperation in cases involving mandatory minimums is comparable to the average rate in all federal cases.” 

Of course, as we refine our approach and reject the ineffective practice of calling for stringent sentences against those convicted of low-level, nonviolent crimes, we also need to refine the metrics we use to measure success; to evaluate the steps we’re taking; and to assess the effectiveness of new criminal justice priorities.  In the Smart on Crime era, it’s no longer adequate – or appropriate – to rely on outdated models that prize only enforcement, as quantified by numbers of prosecutions, convictions, and lengthy sentences, rather than taking a holistic view. 

As the Brennan Center and many others have recognized – and as your landmark report on Federal Prosecution for the 21st Century makes crystal clear – it’s time to shift away from old metrics and embrace a more contemporary, and more comprehensive, view of what constitutes success.  This means developing a new system of assessment – because, as you’ve noted, what gets measured is what gets funded and what gets funded is what gets done.  That’s why I want to commend this organization – and each of our Blue Ribbon Panelists, including some of our very best sitting and former U.S. Attorneys – for examining new ways for the Justice Department to leverage our resources to better serve America’s communities.

Your concrete recommendations – that federal prosecutors should prioritize reducing violence, incarceration, and recidivism – are consistent with the aims of the Smart on Crime initiative.  The new metrics you propose – such as evaluating progress by assessing changes in local violent crime rates, numbers of federal prisoners initially found in particular districts, and changes in the three-year recidivism rate – lay out a promising roadmap for us to consider.  And my pledge to you today is that my colleagues and I will not merely carefully study this critical report – we will use it as a basis for discussion, and a vital resource to draw upon, as we engage in a far-reaching process to develop and codify new success measures – with the aim of cementing recent shifts in law and policy.

One of the key points underscored by your report – and emphasized under the Smart on Crime approach – is the need for the Justice Department to direct funding to help move the criminal justice field toward a fuller embrace of science and data.  This is something that we – and especially our Office of Justice Programs and Bureau of Justice Assistance – have taken very seriously throughout the Obama Administration.  And nowhere are these ideals more fully embodied – or more promisingly realized – than in our Justice Reinvestment Act and Second Chance Act programs. 

As we speak, the states that participate in Justice Reinvestment are making fundamental policy reforms that aim to reduce unnecessary confinement, save taxpayer dollars, and reinvest funding in strategies proven to enhance community safety.  A report issued in January highlighted 17 states that are projected to save $4.6 billion over 10 years.  Another study, in June, highlighted seven states that have achieved substantial reductions in three-year recidivism rates.  And these successes are notable not only for their magnitude, but for the political consensus that drove them. 

Thanks to bipartisan support from Congress, funding for the Justice Reinvestment Initiative has more than quadrupled this year.  That, on its own, is an extraordinary indication of the power and importance of this work.  And this additional funding is allowing us to launch a new challenge grant program – designed to incentivize states to take the next major step in their reform efforts. 

Today, I am pleased to announce that five states – Delaware, Georgia, Louisiana, Ohio, and Oregon – will be receiving these grants, which can be used to expand pre-trial reforms, to scale up swift and certain sanctions, to institute evidence-based parole practices, or a number of other options.  I am also pleased to announce that five states have been selected to receive new funding under the Second Chance Act to help reduce recidivism.  Georgia, Illinois, Iowa, Minnesota, and Vermont will each be awarded $1 million to meet their recidivism reduction goals.  And each will be eligible for an additional $2 million over the next two years if they do so. 

In addition to these and other Second Chance awards, our Office of Juvenile Justice and Delinquency Prevention is providing $7 million in Second Chance Act funding to support reentry demonstration programs and other important efforts at the juvenile level.  A further $1.8 million will support a new Juvenile Reentry Legal Assistance Program through our partners at the Department of Housing and Urban Development.  And we’ll soon be launching a broader partnership with HUD – a partnership rooted in the Pay for Success model championed by the Brennan Center – to focus on finding permanent supportive housing for those returning from incarceration. 

The Justice Department has transferred $5 million to HUD for this program, which will announce the competition in the coming months.  Together, these exciting efforts reaffirm our commitment to strengthening America’s justice system at every level.  They underscore our determination to help people get back on the right path.  But they’re only the beginning – because, beyond our Smart on Crime reforms and our emphasis on evidence-based practices, I believe the federal government has an even broader and more critical role to play in securing the fundamental promise of equal justice under law. 

As we saw all too clearly last month – as the eyes of the nation turned to events in Ferguson, Missouri – whenever discord, mistrust, and roiling tensions fester just under the surface, interactions between law enforcement and local residents can quickly escalate into confrontation, unrest, and even violence.  These tensions simmer every day in far too many communities across the country.  And it’s incumbent upon all of America’s law enforcement officers and leaders to work with the communities they serve to defuse these charged situations by forging close bonds, establishing deep trust, and fostering robust engagement. 

The situation in Ferguson has presented leaders across the nation, and criminal justice and civil rights leaders in particular, with a moment of decision – and a series of important questions that can no longer be avoided.  Will we allow this time – our time – to be defined by division and discord?  Or will we summon the resolve, the fortitude, and the vision to reassess – and even to remake – our system, through cooperation, consensus, and compassion? 

Will we again turn a blind eye to the hard truths that Ferguson exposed, burying these tough realities until another tragedy arises to set them off like a powder keg?  Or will we finally accept this mandate for open and honest dialogue, reach for new and innovative solutions, and rise to the historic challenge – and the critical opportunity – now right before us?

These questions are not rhetorical.  And as we seek to address them, we must take into account the preconceived notions that certain people may bring to interactions with police – preconceptions that may be informed by generations of experience; by the totality of what it has meant to be a person of color in the United States.  We must consider corresponding notions that police may bring to interactions with certain communities and individuals.  And we must never lose sight of the immense and unyielding difficulties inherent in the law enforcement profession – from the training they receive to the risks these brave men and women incur every time they put on their uniforms; from the dangers they face, and the split-second decisions they often must make, to the anguish of family members who awaken at night to the sound of a ringing telephone – hoping for the best, but fearing tragic news about a loved one out walking the beat.

As the brother of a retired law enforcement officer, I understand well how challenging – and how thankless – their vital work can be.  As our nation’s Attorney General, I will always be proud – and steadfast – in my support for law enforcement personnel and their families, who make tremendous and often unheralded sacrifices every single day to keep us safe.  And as an African-American man – who has been stopped and searched by police in situations where such action was not warranted – I also carry with me an understanding of the mistrust that some citizens harbor for those who wear the badge.

So today, it’s time to ask ourselves – as a nation – are we conducting policing, in the 21st century, in a manner that is as effective, as efficient, as equitable, and as just as is possible?  It’s time to build on the outstanding leadership that so many local police are providing – and the reform efforts that are underway in St. Louis County and elsewhere – by making this work a focused, national priority.

Just last week, the Justice Department launched a substantial effort to do just that – by establishing a National Initiative for Building Community Trust and Justice to promote credibility, to enhance procedural justice, to reduce implicit bias, and to support racial reconciliation.  Separately, President Obama has directed federal agencies to carefully review programs that may provide military equipment, or funding for military equipment, to local police – a process that remains ongoing.  Through a range of other programs like the President’s My Brother’s Keeper initiative – and the department’s regular interactions with exemplary law enforcement executives across the country – my colleagues and I are doing important work to resolve tensions and promote mutual understanding;  to bridge divides and spark constructive dialogue; and to ensure – above all else – that everyone who comes into contact with the police is treated fairly.

This is important, and in some cases life-changing, work.  But I believe we need to take these efforts even further.  That’s why, under the leadership of our COPS Office, the Justice Department is working with major police associations to conduct a broad review of policing tactics, techniques, and training – so we can help the field swiftly confront emerging threats, better address persistent challenges, and thoroughly examine the latest tools and technologies to enhance the safety, and the effectiveness, of law enforcement.  Going forward, I will support not only continuing this timely review, but expanding it – to consider the profession in a comprehensive way – and to provide strong, national direction on a scale not seen since President Lyndon Johnson’s Commission on Law Enforcement nearly half a century ago.

In this ongoing effort, and in so many others – as we seize this important moment, renew our determination to combat crime, and accept the historic opportunities now before us – my colleagues and I will continue to look to the Brennan Center, and each of the leaders in this audience, for guidance; for edification; and for frank and honest advice.  We will continue to rely on the experience, and the thoughtful consideration, that you have brought to today’s discussion – and to countless others over the past two decades.  And we will always be both proud and humbled to count you as partners, and as essential allies, in the considerable work ahead.

I want to thank you all – once again – for your leadership, your vision, and your unwavering commitment to the mission we share.  I look forward to building on this dialogue in the weeks and months to come.  And I am optimistic – despite the challenges we face, and the obstacles we must confront – about where your efforts will take us, and all that we will achieve – together – for the exceptional nation we all love.

Thank you.

The former information technology manager of Liberty Reserve, a company that operated one of the world’s most widely used digital currency services and allegedly laundered billions in suspected criminal proceeds, pleaded guilty today in the Southern District of New York in connection with his role in maintaining the company’s technological infrastructure.

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

Maxim Chukharev, 28, of San José, Costa Rica, pleaded guilty today before U.S. District Judge Denise L. Cote to conspiring to operate an illegal unlicensed money transmitting business.  Sentencing is scheduled for January 30, 2015.

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

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

Chukharev was an associate of Liberty Reserve founder Arthur Budovsky and served as Liberty Reserve’s information technology manager in Costa Rica.  In that role, Chukharev was principally responsible, along with co-defendant Mark Marmilev, formerly Liberty Reserve’s chief technology officer, for maintaining Liberty Reserve’s technological infrastructure.

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

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

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

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

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

The Justice Department announced today that it reached an agreement with United Continental Holdings Inc. resolving a claim that divisions of the company previously operating as Continental Airlines discriminated against individuals because of citizenship status in violation of the Immigration and Nationality Act (INA).   

The department’s investigation was initiated based on a telephone call to the Office of Special Counsel for Immigration-Related Unfair Employment Practices’s (OSC) hotline.  The department found that the company requested lawful permanent resident employees, but not U.S. citizen employees, to complete additional Forms I-9 and provide additional proof of employment eligibility after hire even though the law prohibits this practice.  The INA’s anti-discrimination provision prohibits employers from placing additional documentary burdens on work-authorized employees during the employment eligibility verification process based on their citizenship status. 

“The INA’s anti-discrimination provision protects individuals from being singled out for unnecessary and unauthorized employment reverification based on their citizenship or immigration status,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division.  “We commend Continental’s willingness to resolve the issues uncovered during the department’s investigation.”

Under the settlement agreement, Continental will pay $215,000 to the United States, create a $55,000 back pay fund to compensate individuals who may have lost wages due to the company’s practices, and undergo training on the anti-discrimination provision of the INA.  The company will also be subject to departmental monitoring of its employment eligibility reverification practices for a period of two years.    

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

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

Applicants or employees who believe they were subjected to: different documentary requirements based on their citizenship status, immigration status, or national origin; or discrimination based on their citizenship status, immigration status or national origin in hiring, firing, or recruitment or referral for a fee, should contact OSC’s worker hotline for assistance.

The Justice Department announced today that it has asked a federal court in Chicago, Illinois, to permanently bar Anna Platos and Theodore (Ted) Platos, who do business as Midway Accounting Services, from preparing federal tax returns.  According to the complaint, Ted Platos began doing business as API Tax Solutions in 2013.  The civil injunction suit alleges that Anna Platos and Ted Platos claim bogus deductions and credits on customers’ federal tax returns.

Anna Platos and Ted Platos allegedly claim head-of-household filing status on customers’ tax returns in order to increase customers’ standard deductions, even though Anna Platos and Ted Platos are aware that the customers do not qualify to claim that filing status.  Anna Platos and Ted Platos also allegedly fabricate claims for education credits, unreimbursed employee business expenses, charitable contributions, medical expenses, and state and local taxes paid on tax returns that they prepare.  The complaint further alleges that Anna Platos fabricated a receipt purportedly supporting an energy credit that she claimed on a customer’s tax return, presented that fabricated receipt to the Internal Revenue Service (IRS) and instructed the customer to lie to the IRS.

The complaint also requests that the federal court require Anna Platos and Ted Platos to provide the government with a list of customers for whom they have prepared tax returns beginning with the 2009 tax year, to contact those customers to inform them of the injunction order, and to post a copy of the injunction order at their place of business.

Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014.  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

United States v. Anna Platos, etc., et al.
Complaint for Permanent Injunction and Other Relief

A federal court in Pittsburgh, Pennsylvania, permanently barred Larry E. Snow from preparing federal tax returns for others, the Justice Department announced today.  Snow allegedly claimed false tax deductions on customers’ tax returns.

Senior U.S. District Judge Maurice B. Cohill for the Western District of Pennsylvania entered the injunction against Snow on Sept. 23 after Snow failed to contest the government’s claims.  In 2012, Snow pleaded guilty to one count of aiding and assisting in the preparation and presentation of false and fraudulent income tax returns and was later sentenced to six months of home detention and three years probation.  According to the complaint, Snow repeatedly prepared returns with false deductions for medical expenses, personal property taxes, charitable contributions and unreimbursed employee expenses.  He allegedly maintained a list he referred to as “IRS Gimmies,” which were items he instructed his employees to report on each return prepared in his accounting practice, regardless of whether the customer was entitled to them.

The IRS estimated that Snow’s fraudulent return preparation for one year alone cost the U.S. Treasury more than $1.3 million in lost tax revenue.  The court also ordered Snow to notify his former customers of the injunction entered against him.

Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014.  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

United States v. Larry E. Snow
Default Judgment Against Defendant Larry E. Snow

WASHINGTON – El Departamento de Justicia anunció hoy que llegó a un acuerdo con United Continental Holdings, Inc., por medio del cual se resuelve una acusaciόn de que algunas divisiones de la compañía previamente operando como Continental Airlines discriminaron contra individuos por su estatus de ciudadanía en violación de la Ley de Inmigración y Nacionalidad (INA por sus siglas en inglés).

La investigación del departamento se inició por medio de una llamada telefónica que recibió la Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a la Inmigración (OSC) através de su línea directa.  Durante la investigación, el departamento descubrió que la compañía solía requerir a sus empleados residentes permanentes legales, y no a los empleados estadounidenses, que llenaran Formularios I-9 adicionales y proporcionaran comprobantes adicionales de sus autorizaciones de empleo después de la contratación aunque esta práctica está prohibida por ley.  La provisiόn antidiscriminatoria de la INA prohíbe que los empleadores impongan cargas documentales adicionales a los trabajadores con autorizaciόn de trabajo durante el proceso de verificación de elegibilidad de empleo basado en el estatus de ciudadanía del individuo. 

            “La provisiόn antidiscriminatoria de la INA protege a los individuos de reverificaciόn de empleo innecesaria y no autorizada por motivos de su ciudadanía o estatus migratorio,” dijo Molly Moran, Sub-Procuradora General Interina para la Divisiόn de Derechos Civiles.  “Reconocemos la disponibilidad de Continental para resolver los problemas descubiertos durante la investigación del departamento.”

            Según el acuerdo, Continental le pagará $215,000 a los Estados Unidos, establecerá un fondo de $55,000 para compensar a los individuos que pudieron haber sufrido una perdida de salario debido a las práticas injustas de la compañía y participará en un programa de capacitación sobre la provisión antidiscriminatoria de la INA.  La compañía también estará sujeta a un período de monitoreo de sus prácticas de reverificación por el departamento por un período de dos años.

La Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a la Inmigración es la oficina responsable por hacer cumplir con la provisión antidiscriminatoria de la INA.  Entre otras cosas, la ley prohíbe discriminación por estatus de ciudadanía o del origen nacional durante la contrataciόn, el despido, el reclutamiento o la referencia por comisiόn, las prácticas injustas de documentación, represalias, e intimidación.

            Para más información sobre las protecciones contra discriminación en el empleo según las leyes migratorias, llame a la línea directa de OSC para trabajadores al 1-800-255-7688 (1-800-237-2515, TTY para personas con discapacidad auditiva), llame a la línea directa de OSC para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidad auditiva), o para registrarse para un seminario gratis ofrecido a través del internet visite www.justice.gov/crt/about/osc/webinars.php, envíe un correo electrónico al osccrt@usdoj.gov, o visite el sitio de Internet www.justice.gov/crt/about/osc.

Los solicitantes o empleados que consideren que fueron sujetos a (1) diferentes requisitos de verificación por su estatus de ciudadanía, estatus migratorio u origen nacional, o (2) discriminación por estatus de ciudadanía, estatus migratorio, u origen nacional con relación a la contratación, el despido y el reclutamiento o la referencia por comisión, deberán comunicarse a la línea dedicada a los trabajadores anteriormente citada para poderlos ayudar.

The Department of Justice today announced that it will not challenge a proposal by Flexi-Van Leasing Inc. and Direct ChassisLink Inc. to enter into a Chassis Use Agreement at the ports of Los Angeles and Long Beach, California.  Flexi-Van and Direct ChassisLink are chassis leasing companies that also manage chassis pools operating at the ports of Los Angeles and Long Beach. 

Based upon representations made by the applicants, as well as the department’s investigation, the department has no present intention to challenge the proposed agreement.

The department’s position was stated in a business review letter to counsel for Flexi-Van and Direct ChassisLink from Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. 

According to representations made by Flexi-Van and Direct ChassisLink, the proposed agreement will result in the establishment of a “gray” chassis pool, which will extend benefits associated with individual pools by allowing the interchange of chassis across multiple pools throughout the port complex.  The increased flexibility created by the interchangeability will enhance customer service, improve chassis productivity, and respond to the desire of the Long Beach and Los Angeles ports authorities to achieve better overall utilization of the region’s chassis fleets.  The pools managed by Flexi-Van and Direct ChassisLink will continue to compete for business, and leasing terms and rates will continue to be set independently by each chassis provider.  No information will be exchanged between Flexi-Van and Direct ChassisLink regarding customer pricing or other competitively sensitive terms.  A third party provider will be used to facilitate operation of the gray chassis pool, audit chassis usage, and prevent the exchange of competitively sensitive information among the pools and chassis providers.  After initial implementation, Flexi-Van and Direct ChassisLink intend that the agreement will become open to other pools at the ports of Los Angeles and Long Beach.  Based on these representations, as well as the department’s investigation into the particular facts and circumstances relating to the competitive conditions of chassis supply at the port complex, the department has no present intention to challenge the proposed agreement. 

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

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

An Army sergeant pleaded guilty today to bribery and conspiracy to defraud the government for his role in a scheme to steal more than one million gallons of fuel from the U.S. military for resale on the black market in Afghanistan.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina, Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service (DCIS) Southeast Field Office, Special Agent in Charge John A. Strong of the FBI’s Charlotte Division, Director Frank Robey of the U.S. Army Criminal Investigation Command (CID) Major Procurement Fraud Unit (MPFU) and Special Inspector General for Afghanistan Reconstruction John F. Sopko made the announcement.

Christopher Ciampa, 32, of Lillington, North Carolina, entered his guilty plea before U.S. District Court Judge Terrence W. Boyle of the Eastern District of North Carolina.  The sentencing hearing was scheduled for the week of December 15, 2014.      

 “Sergeant Ciampa took bribes to help steal millions of dollars’ worth of fuel meant to support U.S. military operations in Afghanistan,” said Assistant Attorney General Caldwell.  “His greed put his fellow soldiers at greater risk, and his actions stand in stark contrast to the integrity and sacrifice demonstrated every day by the men and women of our Armed Forces.”   

“The DCIS, with our investigative partners, continues to aggressively pursue those who deprive the Department of Defense of much needed resources, such as fuel, critical to accomplishing its global missions,” said DCIS Special Agent in Charge Khin.  “Corruption and theft in a combat environment, especially on such a large scale, degrade the effectiveness of the U.S. armed forces, and increases the danger to our warfighters by diverting those resources to our enemies

“Sergeant Christopher Ciampa betrayed his unit and nation for personal profit by entering into illegal relationships in order to personally profit from the sale and transport of fuel valued at millions of dollars,” said FBI Special Agent in Charge Strong.  “These actions, especially in a wartime environment, damage the reputation of all soldiers and impede the success of coalition war efforts.  Those who put the reputation and lives of their fellow servicemen and women at risk will be aggressively pursued by the FBI and our military partners dedicated to upholding justice.”

“Our highly-trained special agents are experts in fraud investigations and untangling webs of lies and deceit,” said CID MPFU Director Robey.  “Whether an individual is in or out of uniform, it makes no difference, we will do everything in our investigative power to see those who defraud the Army brought to justice.”

“The crimes alleged in this case are serious and describe actions that undermine our mission in Afghanistan,” said Special Inspector General Sopko.  “SIGAR will continue to work tirelessly to protect the American taxpayers’ hard earned money and bring the full weight of the justice system to bear on anyone who seeks to rob the U.S. government.”

According to his plea agreement, Ciampa was deployed to Afghanistan with the 3rd Special Forces Group Service Detachment and was assigned to Camp Brown at Kandahar Air Field between February 2011 and January 2012.  During the deployment, one of Ciampa’s chief responsibilities was management of the Transportation Movement Requests (TMRs) for fuel and other items in support of military units in Afghanistan paid for by the U.S. government. 

Over the course of the conspiracy, Ciampa and others created and submitted false TMRs for the purchase of thousands of gallons of fuel that were neither necessary nor used by military units.  Instead, Ciampa and his co-conspirators stole the fuel and resold it on the black market in neighboring towns.  Between February 2011 and December 2011, they created false TMRs for 114 large fuel tanker trucks, which could each carry approximately 10,000 gallons of fuel.  All of the TMRs were awarded to a single Afghan trucking company, despite significantly higher rates charged by this company.

As a result of the criminal conduct, the United States suffered a total loss of $10,812,000.  The loss resulted from stolen fuel and payments on the fraudulent TMRs in the following amounts: $9,120,000 in lost fuel and $1,692,000 in fraudulent TMRs for the 114 large tanker trucks.

Ciampa admitted that he and his co-conspirators sent some of the illicit proceeds back to the United States via wire transfer and carried some of the cash in their luggage, and Ciampa hid $180,000 of stolen funds inside stereo equipment that he shipped back to North Carolina with his unit’s gear.  He used his share of the proceeds from the scheme to purchase a truck and other personal items.

The case was investigated by DCIS, FBI, CID MPFU and the Special Inspector General for Afghanistan Reconstruction (SIGAR).  The case is being prosecuted by Trial Attorney Wade Weems on detail to the Criminal Division’s Fraud Section from SIGAR and Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina.

Sulaiman Abu Ghayth Appeared with Usama Bin Laden and Ayman Al-Zawahiri Immediatelv After September 11, 2001, Threatening Additional Attacks Against the United States

United States Attorney General Eric Holder, United States Attorney for the Southern District of New York Preet Bharara, Assistant Attorney General for National Security John P. Carlin, Assistant Director-in-Charge George Venizelos of the New York Field Office of the Federal Bureau of Investigation (FBI), and New York City Police Commissioner William J. Bratton announced that Sulaiman Abu Ghayth, aka “Salman Abu Ghayth,” Usama Bin Laden’s son-in-law and the former spokesman for al Qaeda at the time of the September 11th terrorist attacks, was sentenced today in Manhattan federal court to serve life in prison by U.S. District Judge Lewis A. Kaplan.  Abu Ghayth, who was arrested overseas on Feb. 28, 2013, and first appeared in this district on March 1, 2013, was found guilty on March 26, 2014, following a three-week jury trial, of conspiring to kill U.S. nationals, conspiring to provide material support to terrorists and providing material support to terrorists. 

 “Justice has been served,” said Attorney General Holder.  “This outcome ensures that Sulaiman Abu Ghayth, a senior member of al Qaeda and an associate of Usama bin Laden, will never again set foot outside a prison cell.  From beginning to end, this trial, conviction and sentencing have underscored the power of America’s Article III court system to deliver swift and certain justice in cases involving terrorism defendants.  We will continue to rely on this robust and proven system to hold accountable anyone who would harm our nation and its people.  And we will never waver, and never relent, in our pursuit of violent extremists.”

“As the face and voice of al Qaeda in the days and weeks after the 9/11 attacks, Abu Ghayth conspired with Usama Bin Laden and others and announced to the world al Qaeda’s deadly intentions to continue to attack America,” said Assistant Attorney General Carlin.  “For his role in al Qaeda's plot to kill Americans, Abu Ghayth will now spend the rest of his life in prison.  This case highlights our resolve to find and bring to justice - no matter how long it takes - those who plot to attack our citizens and our interests around the world.  I want to thank all of the agents, analysts, and prosecutors who are responsible for this result.”

“Sulaiman Abu Ghayth was the mouthpiece of murder and menace for al Qaeda,” said U.S. Attorney Bharara.  “Hours after the 9/11 attacks, Abu Ghayth, Usama bin Laden’s propaganda minister, was exhorting others to pledge themselves to al Qaeda in the cause of murdering more Americans.  It has been 13 years since that terrible day, but from the day Abu Ghayth was brought to the United States 19 months ago, justice for him has been swift and fair.  Today, having been afforded a fair and impartial trial in an American civilian court at which a jury unanimously convicted him of material support to al Qaeda and conspiring to kill Americans, Abu Ghayth has been sentenced to life in prison.   No sentence can restore what was taken from the families of al Qaeda’s victims.  But today’s sentence ensures that Sulaiman Abu Ghayth will never be free to incite or support mass murder again.” 

“As the spokesman for al Qaeda, Abu Ghayth espoused messages of terror, hate and fear to motivate others to harm our country, underestimating the resiliency of the United States to stand strong in the face of violence and adversity,” said FBI Assistant Director-in-Charge Venizelos.  “Today's sentence is the culmination of years of hard work and cooperative efforts among law enforcement professionals to seek justice for those who lost their lives in the 9/11 attacks.  Along with its law enforcement partners, the FBI's Joint Terrorism Task Force will vigorously pursue those who support this radical terrorist agenda.”

“Sulaiman Abu Ghayth was a key spokesman for al-Qaida and had access to the terrorist group's senior leadership as he took to the airwaves and threatened further attacks as our city was recovering from the horror of 9-11,” said NYPD Commissioner Bratton.  “His capture, trial and conviction is a reminder that the NYPD detectives and FBI agents of the Joint Terrorist Task Force will follow leads anywhere in the world to bring terrorists to justice.”

According to the evidence presented at trial, statements made during other public proceedings including today’s sentencing, and other court documents:

Since around 1989, al Qaeda has been an international terrorist organization, dedicated to opposing non-Islamic governments with force and violence.  Usama Bin Laden served as the leader, or “emir,” of al Qaeda until his death on or about May 2, 2011.  Members of al Qaeda typically have pledged an oath of allegiance, called bayat, to Bin Laden and to al Qaeda. 

The core purpose of al Qaeda, as stated by Bin Laden and other leaders, is to support violent attacks against property and nationals, both military and civilian, of the United States and other countries.  Between 1989 and 2001, al Qaeda established training camps, guest houses, and business operations in Afghanistan, Pakistan and other countries for the purpose of training and supporting its agenda of violence and murder.  Members and associates of al Qaeda have executed a number of terrorist attacks, all in furtherance of the organization’s stated conspiracy to kill Americans, including the attacks on the United States on Sept. 11, 2001, in New York, Virginia and Pennsylvania, which killed approximately 2,976 people.

From at least May 2001 up to around 2002, Abu Ghayth served alongside Bin Laden, appearing with Bin Laden and his then-deputy and now the declared leader of al Qaeda, Ayman al-Zawahiri, speaking on behalf of al Qaeda and in support of Bin Laden’s terrorist objectives, recruiting young men to join al Qaeda and its murderous mission against the United States, and warning that attacks similar to those of Sept. 11, 2001, would continue. 

In particular, around May 2001, Abu Ghayth urged young al Qaeda recruits at a guest house in Kandahar, Afghanistan, to swear bayat to Bin Laden, shortly before these men were brought to an al Qaeda training camp.  On the evening of Sept. 11, 2001, immediately after the terrorist attacks on the United States, Bin Laden summoned Abu Ghayth and asked for his assistance, which Abu Ghayth agreed to provide.  On the morning of Sept. 12, 2001, Abu Ghayth appeared with Bin Laden, Zawahiri, and another al Qaeda leader, and spoke on behalf of al Qaeda in a speech that would be disseminated around the world, warning the United States and its allies that “[a] great army is gathering against you” and called upon “the nation of Islam” to do battle against “the Jews, the Christians and the Americans.”  Also, after the Sept. 11, 2001, terrorist attacks, Abu Ghayth delivered speeches in which he addressed the then-U.S. Secretary of State and warned that “the storms shall not stop, especially the Airplanes Storm,” and advised Muslims, children, and opponents of the United States “not to board any aircraft and not to live in high rises.”  At this time, in Afghanistan, Bin Laden and others within al Qaeda were plotting to detonate shoe bombs aboard flights within or en route to the United States.

Abu Ghayth continued to speak on behalf of al Qaeda as the terrorist organization’s spokesperson through 2002, repeatedly working to drive more young men to al Qaeda.  Also in 2002, Abu Ghayth arranged to be, and was, successfully smuggled from Afghanistan into Iran, where he was later arrested with other al Qaeda leaders.

*                      *                      *    

In addition to a prison term of life, Abu Ghayth was ordered to forfeit all foreign and domestic assets derived from, involved in, and used and intended to be used to commit terrorism against the United States, its citizens and residents, and their property, and was ordered to pay a $300 special assessment fee.

Abu Ghayth’s conviction is the result of the close cooperative efforts of the U.S. Attorney’s Office for the Southern District of New York, the FBI’s Joint Terrorism Task Force – which consists of law enforcement officers of the FBI, NYPD, United States Marshals Service, and other agencies – and the National Security Division of the U.S. Department of Justice.  The Justice Department’s Office of International Affairs and the U.S. Department of State also provided assistance.

The prosecution is being handled by Assistant United States Attorneys John P. Cronan, Nicholas J. Lewin and Michael Ferrara of the Terrorism and International Narcotics Unit of the U.S. Attorney’s Office for the Southern District of New York, with assistance from Trial Attorney Jolie Zimmerman of the National Security Division’s Counterterrorism Section, Tara M. LaMorte of the Civil Division of the U.S. Attorney’s Office for the Southern District of New York, and Diane Gujarati, Deputy Chief of the Criminal Division of the U.S. Attorney’s Office for the Southern District of New York.

The Justice Department announced today that it won a lawsuit against Life Generations Healthcare LLC, doing business as Generations Healthcare (GHC), regarding allegations that the company engaged in a pattern or practice of discrimination against foreign-born workers.  The case was decided by the Office of the Chief Administrative Hearing Officer, the administrative court authorized to hear discrimination cases under the Immigration and Nationality Act (INA). 

The court found that GHC, an assisted-living facility with 18 locations in California, violated the INA when it required foreign-born job applicants and employees to produce more, different, and specific documents to prove their employment eligibility verification, while native-born U.S. citizens were allowed to produce the documentation of their choice.  The court also found that, in some cases, foreign-born individuals were prevented from working for the company even though they had sufficient proof of their work authorization.  The case now moves to the remedial phase for the court to determine what relief GHC must provide for violating the law.

“Companies cannot create discriminatory barriers for workers and applicants based purely on where those individuals are born,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division.  “This ruling sends a powerful message that this type of discrimination will not be tolerated.”  

The case was tried by the Justice Department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), which is responsible for enforcing the anti-discrimination provision of the Immigration and Nationality Act.  The statute prohibits employers from placing additional documentary burdens on work-authorized applicants or employees during the employment eligibility verification process because of their citizenship status or national origin.  The statute also prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee, as well as retaliation and intimidation. 

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

Applicants or employees who believe they were subjected to: different documentary requirements based on their citizenship status, immigration status, or national origin; or discrimination based on their citizenship status, immigration status, or national origin in hiring, firing, or recruitment or referral for a fee, should contact OSC’s worker hotline for assistance.

The Justice Department announced today that it has asked a federal court in Grand Rapids, Michigan, to permanently bar Jim Sanzone, who does business as Lakeshore Professionals LLC from preparing federal tax returns for others.

The complaint alleges that Sanzone inappropriately claims deductions and credits for customers on their tax returns, causing them to receive tax refunds or increased refund amounts to which they are not entitled.

According to the complaint, Sanzone claims false deductions and credits on customers’ federal tax returns by including fabricated or inflated claims for charitable contributions, medical expenses, mortgage interest and state and local taxes paid on tax returns that he and his business prepared since 2010.  Sanzone also allegedly reports fake business expenses in order to fraudulently reduce customers’ taxable income.  The complaint also alleges that Sanzone prepares tax returns for customers that falsely claim education credits, even though the customers did not attend school or have qualifying education-related expenses, and so were ineligible for the credit.                

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2014.  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

USA v. Jim Sanzone, etc
Complaint for Permanent Injunction

The Department of Justice today announced the awarding of 169 grants to American Indian tribes, Alaska Native villages, tribal consortia and tribal designees.  The grants will provide more than $87 million to enhance law enforcement practices and sustain crime prevention and intervention efforts in nine purpose areas including public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; violence against women; juvenile justice; and tribal youth programs.

Assistant Attorney General Karol V. Mason for the Office of Justice Programs, Principal Deputy Director Bea Hanson for the Office on Violence Against Women (OVW) and Director Ron Davis for the Office of Community Oriented Policing (COPS) made the announcement while attending the Affiliated Tribes of Northwest Indians (ATNI) Annual Convention hosted by the Confederated Tribes of the Umatilla Indian Reservation.  ATNI represents 57 northwest tribal governments from Oregon, Washington, Idaho, Northern California, Southeast Alaska, and Western Montana.  This year’s announcement includes awards to 22 of the represented tribes at the convention.  The awards are made through the department’s Coordinated Tribal Assistance Solicitation (CTAS), a single application for tribal-specific grant programs. 

“This work covers every area of public safety in Indian country, from supporting children and youth to protecting and serving native women to the hiring of tribal police officers to strengthening tribal criminal and juvenile justice systems,” said Assistant Attorney General Mason.  “The CTAS programs are not only critical to reversing crime in Indian country but are integral strengthening and sustaining healthy communities.”

The safety of American Indian and Alaska Native women is a top priority of OVW, and a clear priority of the entire Department of Justice.  With funding from OVW’s Tribal Governments Program, tribes are able to develop and strengthen the tribal justice system’s response to violence against American Indian and Alaska Native women that meets the specific needs of their tribe.  This funding has played a significant role in increasing programs and services available to tribes, and has both improved and increased the effectiveness of services provided by tribal court systems.  This coordinated approach allows OVW and its sister grant-making components to consider the totality of a tribal community’s overall public safety needs in making award decisions.

“We know from our work across Indian country and elsewhere, that early intervention that interrupts or deters a pattern of escalating violence is the key to avoiding more serious and deadly violence in the future,” said Principal Deputy Director Hanson.  “And it is the key to saving more women’s lives and protecting more children from growing up in a home where violence is the norm.”

COPS funding through CTAS improves public safety and enhances community policing in federally recognized tribal jurisdictions. These funds will allow tribal jurisdictions to expand the implementation of community policing and meet the most serious needs of law enforcement. With this funding, 21 tribal agencies will be able to hire or re-hire career law enforcement officers and village public safety officers.   Funds awarded today may also be used to procure basic equipment and training to assist in the initiation or enhancement of tribal community policing efforts.

“I am pleased that COPS can help tribal jurisdictions hire more officers to help control crime through community policing,” said Director Davis.  “These funds also support tribal jurisdictions by covering the costs of basic equipment and training.  It’s a comprehensive package of support that delivers much needed help to tribal communities.”

The department developed CTAS through its Office of Community Oriented Policing, Office of Justice Programs and Office on Violence against Women, and administered the first round of consolidated grants in September 2010.  Over the past five years, it has awarded over 1,100 grants totaling more than $530 million.

Information about the consolidated solicitation is available at www.justice.gov/tribal.  
FY 2014 CTAS Award List
FY 2014 CTAS Fact Sheet

Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities.

The former owner of a Long Beach, California, medical supply company was sentenced today to serve 30 months in prison and ordered to pay $1,490,532 in restitution for his role in a scheme to provide unnecessary power wheelchairs to Medicare patients, resulting in $2.6 million in fraudulent claims to Medicare.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.  U.S. District Judge Philip S. Gutierrez of the Central District of California imposed the sentence.

According to court documents, Akinola Afolabi, 55, of Long Beach, California, was the owner and president of Emmanuel Medical Supply, a durable medical equipment supply company in Long Beach.  From June 2006 through September 2009, Afolabi provided medically unnecessary power wheelchairs and other medical equipment to Medicare beneficiaries, and submitted fraudulent claims to Medicare for this equipment.  Afolabi admitted that he paid “marketers” to obtain Medicare beneficiary information that he used on the false claims.  Afolabi admitted that prescriptions for the equipment and related medical documents were fraudulent, and that some of the beneficiaries did not even receive the wheelchairs or other medical supplies that were billed.

From June 2006 through September 2009, Afolabi submitted approximately $2,668,384 in fraudulent claims to Medicare for power wheelchairs and related services, and Medicare paid approximately $1,490,532 on those claims.

The case was investigated by the FBI and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  This case is being prosecuted by Trial Attorney Fred Medick 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 U.S. Department of Health and Human Services’ (HHS) Centers for Medicare and Medicaid Services, working in conjunction with HHS’ Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.  

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

# # #

Attorney General Eric Holder announced Monday that the Justice Department has selected four sites to receive a total of $2.6 million in grants to implement promising models aimed at reducing domestic violence homicides.  Over the next two years, these sites—Pitt County, North Carolina; Cuyahoga County, Ohio; Contra Costa County, California; and the Borough of Brooklyn, New York—will institute screening models and evidence-based strategies that will allow them to anticipate potentially lethal behavior, take steps to stop the escalation of violence, and – ultimately – save lives.  The National Institute of Justice will conduct an evaluation of the models in each of the selected sites to identify the key components needed to successfully adapt the domestic violence homicide prevention models nationwide.

“Domestic violence is more than a crime against just the victim,” said Attorney General Holder in a video message posted on the Justice Department’s website.  “It is a crime against all of us as a society.  And our collective response must treat it as such.”

The complete text of the Attorney General’s video message is below:

“Domestic violence is a devastating crime that claims far too many lives.  Studies have shown that, on average, three women die every day in America at the hands of their partner or ex-partner.  And from 2009 to 2012, 40 percent of mass shootings started with the killer targeting a girlfriend, wife, or ex-wife.  These are tragic and shocking statistics, and the Justice Department is working hard to bring an end to this horrific status quo. 

“Under the Violence Against Women Act, which was reauthorized last year, the Department of Justice is taking vital action to protect and empower women and partners who are being exploited and abused.  Through our Office on Violence Against Women, we are working to support victims and hold perpetrators accountable by promoting a coordinated community response.  And in the reauthorized Act, this Administration helped to secure important new protections for women in Indian Country, LGBT individuals, and others.

“These are important achievements – but we must do more.  That’s why, in 2013, I was proud to stand with Vice President Biden to unveil a new grant-funded initiative to help reduce domestic violence homicides.  This funding provided twelve communities– in states across the country – with the opportunity to reduce domestic violence homicides by effectively identifying potential victims and monitoring high-risk offenders. 

“And today, I am pleased to announce that four sites have been selected to receive a total of $2.6 million to implement promising models aimed at reducing domestic violence homicides.  In Pitt County, North Carolina; in Cuyahoga County, Ohio; in Contra Costa County, California; and in the Borough of Brooklyn, New York – these two-year awards will make a tremendous difference, helping local officials to put their anti-violence initiatives into practice.

“In that time, they will institute screening models and evidence-based strategies that will allow them to anticipate potentially lethal behavior, take steps to stop the escalation of violence, and – ultimately – save lives.  These innovative programs can then be studied and replicated in order to protect those who are at risk – and stop would-be abusers – across the United States.

“We have come a long way since the time when these incidents of abuse were considered private, household matters.   But we have a ways to go still.  Domestic violence is more than a crime against just the victim.  It is a crime against all of us as a society.  And our collective response must treat it as such.

“Going forward, the Justice Department will continue to build our important efforts to end violence against women and girls – no matter who they are or where they live – because all Americans deserve to feel safe and secure in their homes, on their college campuses, and on the streets of our communities.

“As we strive to end the epidemic of domestic and intimate partner violence, all of us have a great deal of work to do.  But this Administration, this Department of Justice – and I personally – will not waver in that effort: to shine a light on violence and abuse; to protect and empower women; and to make domestic violence homicide a thing of the past.”

The full video of the Attorney General’s message is available at http://www.justice.gov/agwa.php.

The U.S. Department of Justice unveiled a new mobile app, called DOJ Law Jobs, which will provide attorneys and law students with a quick and easy way to find an attorney position or law student internship with the department.  DOJ Law Jobs is available for free now on iTunes for Apple iPhone, and additional versions for iPad and Android devices will be available in the next few weeks.  The mobile app was developed by the Office of Attorney Recruitment and Management and Office of the Chief Information Officer.  Users of the app will be able to create personalized job searches based on practice area, geographic preference, and hiring organization.

DOJ Law Jobs includes the following key features: provides instructions on how to apply to attorney jobs and legal internships; saves search criteria for quick access to future opportunities; allows users to save, share, and email their favorite jobs; and provides access to hundreds of attorney jobs and legal internships at the U.S. Department of Justice.  The DOJ Law Jobs logo was developed in-house, following a DOJ-wide request for ideas.

“The new app directly aligns with President Obama’s digital government strategy aimed at delivering better digital services to the American people,” said Director Jamila Frone of the Office of Attorney Recruitment and Management.  “We are very excited about this app as it allows an increasingly mobile workforce to quickly and affordably access legal employment opportunities with the department and conduct personalized searches at the touch of a button.”

“Mobility is the future,” said DOJ Chief Information Officer Joseph Klimavicz. “The Department of Justice is committed to changing the way citizens interact with government information.  We are tailoring our mobile strategy to align with the needs of American citizens.”

The Department of Justice is the world’s largest law office, employing more than 10,000 attorneys nationwide.  The Office of Attorney Recruitment and Management oversees the department’s outreach and recruitment efforts for law students and attorneys with the goal of attracting a highly-qualified and diverse talent pool.  For more information, please visit www.justice.gov/legal-careers.

A Philadelphia man was sentenced today to life in prison for his role in the Oct. 9, 2004, 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.  U.S. District Judge R. Barclay Surrick imposed the sentence.

Robert Merritt, 34, was convicted following a jury trial on May 13, 2013, of conspiracy to participate in a racketeering enterprise and the murders of the family members of a federal witness, Eugene Coleman.

At the direction of convicted drug kingpin Kaboni Savage, Merritt and his cousin, Lamont Lewis, participated in the firebombing of the Coleman family home in retaliation for Coleman’s testimony against Savage.  Evidence introduced at trial showed that Merritt threw a gas can with a lit cloth fuse, and then a second gas can, into the occupied Philadelphia row house in the predawn hours of Oct. 9, 2004.  Six people, including four children ranging in age from 15 months to 15 years, were killed in the ensuing fire. 

Co-defendants Kaboni Savage and Kadida Savage were also convicted at the May 2013 trial of the firebombing.  Kaboni Savage was sentenced to death for 12 counts of murder in aid of racketeering.  Kidada Savage was sentenced to life in prison.  Lamont Lewis, who pleaded guilty before trial, is awaiting sentencing.

The case was investigated by the FBI, the Internal Revenue Service – Criminal Investigations, 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.    

# # #

A Pennsylvania accountant was sentenced today to serve 40 months in prison for conspiring to defraud FirstPlus Financial Group Inc. (FirstPlus), a Texas-based financial services company, which had been targeted for extortionate takeover and looting by a group led by Lucchese organized crime family member Nicodemo S. Scarfo.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District of New Jersey made the announcement.

Howard Drossner, 53, of Ambler, Pennsylvania, previously pleaded guilty before U.S. District Judge Robert B. Kugler to a superseding information charging him with conspiracy to commit wire fraud.  Judge Kugler imposed the sentence today in the District of New Jersey.

According to court documents and evidence introduced at the trial of his coconspirators, Scarfo is a made member of the Lucchese organized crime family.  In April 2007, Scarfo, Salvatore Pelullo and others devised a scheme to take over FirstPlus.  Scarfo and Pelullo used threats of economic harm to intimidate and remove the prior management and board of directors and replaced those officers with individuals beholden to Scarfo and Pelullo.   

Drossner, a certified public accountant (CPA), joined the conspiracy in February 2008 when he helped Scarfo and Scarfo’s then-fiancée secure a $500,000 mortgage to purchase a house for $715,000 in Egg Harbor Township, New Jersey.  At the direction of Pelullo, Drossner created false tax returns to help Scarfo’s fiancée qualify for a mortgage.  Scarfo used money looted from FirstPlus for the $215,000 down payment on the house.  The false tax returns, which exaggerated Scarfo’s fiancée’s income so she could qualify for the mortgage without naming Scarfo, were used to secure the mortgage. 

After the First Plus scheme was shut down by federal law enforcement in May 2008, Scarfo was unable to pay the mortgage and the house ultimately went into foreclosure.  It was sold by the bank in 2010.   

In addition to the prison term, Judge Kugler sentenced Drossner to three years of supervised release and fined him $125,000.  Under the terms of his plea agreement, Drossner was required to notify the Pennsylvania State Board of Accountancy of his guilty plea and consent to the voluntary suspension of his CPA license.

Four other members of the conspiracy – Scarfo, a member of the Lucchese La Cosa Nostra (LCN) family; Pelullo, an associate of the Lucchese and Philadelphia LCN families; William Maxwell, a Texas lawyer; and John Maxwell, who acted as the nominal CEO of FirstPlus after the takeover – were convicted of several offenses, including racketeering conspiracy, in July 2014 after a six-month trial.  They are all awaiting sentencing.  The indictment also named Nicodemo S. Scarfo’s father, Nicodemo D. Scarfo – the former boss of the Philadelphia LCN family – and Vittorio Amuso – the boss of the Lucchese family – as unindicted co-conspirators.  Both are serving lengthy prison sentences.

Three other defendants charged in the indictment – John Parisi, manager of Scarfo’s shell company; Lisa Murray-Scarfo, Scarfo’s then-fiancée and a participant in the mortgage fraud conspiracy; and Cory Leshner, a participant in the looting of FirstPlus – have pleaded guilty and are awaiting sentencing.  Todd Stark, also charged in the indictment, previously pleaded guilty and was sentenced for providing ammunition to Scarfo and Pelullo despite knowing that they were convicted felons.

 This case was investigated by the FBI’s Newark and Philadelphia Field Offices, the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations for the New York Region and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

This case is being prosecuted by Trial Attorney Adam L. Small of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the District of New Jersey.

# # #

A federal jury returned guilty verdicts against two former officials of and one broker for the Peanut Corporation of America (PCA), the Department of Justice announced today. 

Stewart Parnell, of Lynchburg, Virginia, and Michael Parnell, of Midlothian, Virginia, were convicted of conspiracy, mail and wire fraud, and the introduction of misbranded food into interstate commerce.  Steward Parnell was also convicted of the introduction of adulterated food.  Stewart Parnell and Mary Wilkerson, of Edison, Georgia, were also convicted of obstruction of justice.  The convictions all arise from the unlawful sale of salmonella-tainted peanuts and peanut products.

Expert evidence at trial showed that tainted food led to an outbreak in 2009 with more than 700 reported cases of salmonella poisoning.  According to the Centers for Disease Control and Prevention (CDC), based on epidemiological projections, that number translates to more than 22,000 total cases.

The verdicts followed a seven-week trial in the Middle District of Georgia during which prosecutors presented the testimony of 45 witnesses and introduced 1,001 documents into evidence.  Among those who testified were Samuel Lightsey and Daniel Kilgore, both of Blakely, Georgia, both former operations managers for PCA and both of whom earlier pleaded guilty to several crimes for their roles in the sale of the salmonella-tainted food by PCA.

“As this verdict confirms, the salmonella outbreak that caused nationwide panic five years ago was a direct result of the actions of these individuals,” said Attorney General Eric Holder.  “This verdict demonstrates that the Department of Justice will never waver in our pursuit of those who break our laws and compromise the safety of America’s food supply for financial gain.  All Americans must be able to rely on the safety of the food they purchase.  And any individual or company who puts the health of consumers at risk by criminally selling tainted food will be caught, prosecuted, and held accountable to the fullest extent of the law.”

The government presented evidence at trial to establish that Stewart Parnell and Michael Parnell – with Lightsey and Kilgore – participated in several schemes by which they defrauded PCA customers and jeopardized the quality and purity of their peanut products.  Specifically, the government presented evidence that defendants misled customers about the presence of salmonella in their products.  For example, as the evidence demonstrated, the Parnells, Lightsey and Kilgore fabricated certificates of analysis (COAs) accompanying various shipments of peanut products.  COAs are documents that summarize laboratory results, including test results concerning the presence or absence of pathogens in food.  According to the evidence, on several occasions, the Parnells, Lightsey and Kilgore participated in a scheme to fabricate COAs that stated that the food at issue was free of pathogens when in fact there had been no testing of the food or tests had revealed the presence of pathogens.

The government also presented evidence that when FDA officials visited the plant to investigate the outbreak, Stewart Parnell, Lightsey and Wilkerson gave untrue or misleading answers to questions posed by those officials.

“We are gratified by the jury’s verdict,” said Joyce R. Branda, Acting Assistant Attorney General for the Civil Division.  “The jury delivered a powerful message that there will be serious consequences for criminals who put profit above the welfare of their customers and knowingly sell contaminated food.  The Department of Justice will not hesitate to pursue any person whose criminal conduct risks the health of Americans and the safety of the nation’s food supply.” 

“In this great country, we take for granted the safety of the food we feed our families,” said U.S. Attorney Michael J. Moore of the Middle District of Georgia.  “We expect, and rightfully so, for food suppliers to follow the rules and regulations, and to never sacrifice public safety for profits.  In this case, these defendants were willing to put tainted food onto the shelves of stores across the country.  After this trial, it should be clear that individual accountability, not just corporate responsibility, for criminal conduct that puts public safety in jeopardy is now the norm in the eyes of the Department of Justice.  And while the evidence over the last few weeks has focused on the criminal acts  of these defendants, let’s not forget that there were real victims in this case who became ill and suffered greatly because making money, at least to the defendants, was more important than making sure that the peanut products they put into the marketplace were safe.”

Attorney General Holder, Acting Assistant Attorney General Branda and U.S. Attorney Moore thanked the jury for its service, and, especially, for its careful consideration of the evidence.

In all, the jury convicted Stewart Parnell of multiple counts of conspiracy, mail fraud, wire fraud, the sale of misbranded food, the sale of adulterated food, and obstruction; Michael Parnell of multiple counts of conspiracy, mail fraud, wire fraud, and the sale of misbranded food; and Mary Wilkerson of one count of obstruction.  The judge has not yet set a date for sentencing.

The case was prosecuted by Trial Attorneys Patrick Hearn and Mary M. Englehart of the Consumer Protection Branch of the Civil Division and Assistant U.S. Attorney Alan Dasher of the Middle District of Georgia.

Today, Deputy Assistant Attorney General Ronald A. Cimino for the Justice Department’s Tax Division, U.S. Attorney S. Amanda Marshall for the District of Oregon and Special Agent in Charge Teri L. Alexander of Internal Revenue Service (IRS)-Criminal Investigation announced the unsealing of two indictments against nine individuals involved in two tax fraud schemes, each of which claimed more than $1 million in fraudulent tax refunds.

Four Portland Residents Indicted in a $1 Million Tax Refund Fraud Conspiracy

Jheraun Dunlap, Ernest Bagsby, Jermaine Moore and Brandi McCall were indicted by a federal grand jury sitting in Portland for a federal tax refund fraud scheme.

According to the 45-count indictment, Dunlap allegedly filed at least 208 false individual income tax returns with the IRS, claiming more than $1 million in fraudulent refunds.  The indictment alleges that Dunlap filed false tax returns using the names and social security numbers of other individuals, which he obtained directly and  received from the other defendants.  According to the indictment, Dunlap used numerous addresses obtained by Bagsby, Moore and McCall to receive stored-value debit cards loaded with fraudulent income tax refunds.

Dunlap, Bagsby, Moore and McCall were all indicted for conspiracy to defraud the government.  In addition, Dunlap was indicted on 23 counts of filing false claims for tax refunds, five counts of wire fraud and five counts of aggravated identity theft; Bagsby was indicted on one count of theft of government funds and one count of aggravated identity theft; Moore was indicted on two counts of theft of government funds and two counts of aggravated identity theft; and McCall was indicted on three counts of theft of government funds and two counts of aggravated identity theft.

If convicted, Dunlap faces a statutory maximum sentence of 10 years in prison for the conspiracy to defraud the government, five years in prison for each false claims count, 20 years in prison for each wire fraud count and a statutory mandatory two year sentence in prison for the aggravated identity theft counts.  If convicted, he could also be subject to fines, mandatory restitution and a money judgment.  If convicted, Bagsby, Moore and McCall each face a statutory maximum sentence of 10 years in prison for conspiracy to defraud the government, 10 years in prison for each theft of government funds count and a statutory mandatory two year sentence in prison for the aggravated identity theft counts.

This case was investigated by the IRS-Criminal Investigation’s Stolen Identity Refund Fraud Task Force.  Trial Attorneys Leslie A. Goemaat and Lori A. Hendrickson of the Tax Division are prosecuting the case.                                                           

Five Individuals Indicted in a $1 Million Tax Refund Fraud Conspiracy

Lori Nicholson, Jasmine Mason, Tataneisha White, Shawntina Ware and Brandon Leath were indicted by a federal grand jury sitting in Portland for a federal tax refund fraud scheme.

According to the 110-count indictment, Nicholson, Mason, White, Ware and Leath filed at least 227 false federal income tax returns with the IRS, claiming more than$1 million in fraudulent tax refunds.  The five defendants are alleged to have filed false tax returns using the names and social security numbers of other individuals obtained directly and through other defendants.  According to the indictment, the defendants used addresses that they could access or control to receive stored-value debit cards loaded with fraudulent income tax refunds.

Nicholson, Mason, White, Ware and Leath were all indicted for conspiracy to defraud the government.  In addition, Nicholson was indicted on 16 counts of filing false claims for tax refunds, three counts of wire fraud and 13 counts of theft of government funds; Mason was indicted on 18 counts of filing false claims for tax refunds, three counts of wire fraud and eight counts of theft of government funds; White was indicted on 12 counts of filing false claims for tax refunds, three counts of wire fraud and four counts of theft of government funds; Ware was indicted on eight counts of filing false claims for tax refunds, three counts of wire fraud and five counts of theft of government funds; Leath was indicted on six counts of filing false claims for tax refunds, three counts of wire fraud and four counts of theft of government funds.

If convicted, the defendants face a statutory maximum sentence of 20 years in prison for each wire fraud count, 10 years in prison for each conspiracy to defraud the government count, 10 years in prison for each theft of government funds count and five years in prison for each false claims count.  If convicted, the defendants could also be subject to fines, mandatory restitution, and a money judgment.

This case was investigated by the IRS-Criminal Investigation’s Stolen Identity Refund Fraud Task Force.  Trial Attorneys Lori A. Hendrickson and Ryan R. Raybould of the Tax Division are prosecuting the case.

# # #

For both cases, an indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

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

WASHINGTON – Assistant Attorney General for National Security John Carlin and United States Attorney for the Southern District of New York Preet Bharara announced that Adel Abdel Bary, aka “Adel Mohammed Abdul Almagid Abdel Bary,” aka “Abbas,” aka “Abu Dia,” aka “Adel” (“Bary”), pleaded guilty in Manhattan federal court to international terrorism charges in connection with Bary’s work on behalf of al Qaeda and the Egyptian Islamic Jihad.  Bary was extradited to the United States from the United Kingdom on Oct. 6, 2012.  Bary pleaded guilty to a three-count superseding information charging him with conspiring to kill U.S. nationals, conspiring to make a threat to kill, injure, intimidate, and damage and destroy property by means of an explosive, and making such a threat.  Following the defendant’s plea of guilty, Judge Lewis A. Kaplan asked for further information regarding the basis of the plea agreement which the parties will provide within a week.

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

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

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

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

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

***

In connection with his role in transmitting al Qaeda’s claims of responsibility for the bombings of the U.S. Embassies in Nairobi, Kenya and Dar es Salaam, Tanzania, Bary pleaded guilty to one count of conspiring to make a threat to kill, injure, intimidate, and damage and destroy property by means of an explosive, which carries a maximum term of 10 years in prison, and one count of making such a threat, which carries a maximum term of 10 years in prison.  In connection with his role in the conspiracy—led by Bin Laden and Zawahiri—to attack American targets around the world, Bary pleaded guilty to one count of conspiring to kill U.S. nationals, which carries a maximum term of five years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Two co-defendants, Khalid al Fawwaz, aka “Khaled Abdul Rahman Hamad al Fawwaz,” aka “Abu Omar,” aka “Hamad,” and Anas al Liby, aka “Nazih al Raghie,” aka “Anas al Sebai,” are scheduled to commence trial on Nov. 3, 2014, before Judge Kaplan.  The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

U.S. Attorney Bharara praised the outstanding efforts of the Federal Bureau of Investigation, the New York City Police Department, the United States Marshals Service, and the Metropolitan Police Department of London, England (New Scotland Yard).  U.S. Attorney Bharara also thanked the U.S. Department of Justice’s Office of International Affairs and National Security Division for their ongoing assistance.                                        

This case is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Sean S. Buckley, Adam Fee, Nicholas J. Lewin, and Stephen J. Ritchin are in charge of the prosecution.

# # #

14-1001

Assistant Attorney General for National Security John Carlin and United States Attorney for the Southern District of New York Preet Bharara announced that Adel Abdel Bary, aka “Adel Mohammed Abdul Almagid Abdel Bary,” aka “Abbas,” aka “Abu Dia,” aka “Adel” (“Bary”), pleaded guilty in Manhattan federal court to international terrorism charges in connection with Bary’s work on behalf of al Qaeda and the Egyptian Islamic Jihad.  Bary was extradited to the United States from the United Kingdom on Oct. 6, 2012.  Bary pleaded guilty to a three-count superseding information charging him with conspiring to kill U.S. nationals, conspiring to make a threat to kill, injure, intimidate, and damage and destroy property by means of an explosive, and making such a threat.  Following the defendant’s plea of guilty, Judge Lewis A. Kaplan asked for further information regarding the basis of the plea agreement which the parties will provide within a week.

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

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

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

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

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

*                *                *

In connection with his role in transmitting al Qaeda’s claims of responsibility for the bombings of the U.S. Embassies in Nairobi, Kenya and Dar es Salaam, Tanzania, Bary pleaded guilty to one count of conspiring to make a threat to kill, injure, intimidate, and damage and destroy property by means of an explosive, which carries a maximum term of 10 years in prison, and one count of making such a threat, which carries a maximum term of 10 years in prison.  In connection with his role in the conspiracy—led by Bin Laden and Zawahiri—to attack American targets around the world, Bary pleaded guilty to one count of conspiring to kill U.S. nationals, which carries a maximum term of five years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Two co-defendants, Khalid al Fawwaz, aka “Khaled Abdul Rahman Hamad al Fawwaz,” aka “Abu Omar,” aka “Hamad,” and Anas al Liby, aka “Nazih al Raghie,” aka “Anas al Sebai,” are scheduled to commence trial on Nov. 3, 2014, before Judge Kaplan.  The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

U.S. Attorney Bharara praised the outstanding efforts of the Federal Bureau of Investigation, the New York City Police Department, the United States Marshals Service, and the Metropolitan Police Department of London, England (New Scotland Yard).  U.S. Attorney Bharara also thanked the U.S. Department of Justice’s Office of International Affairs and National Security Division for their ongoing assistance.                                                     

This case is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Sean S. Buckley, Adam Fee, Nicholas J. Lewin, and Stephen J. Ritchin are in charge of the prosecution.

A federal court in Los Angeles has permanently barred a Rancho Cucamonga, California, man from preparing federal tax returns for others, the Justice Department announced today.

The permanent injunction order, to which Robert L. Cardoza consented, was entered by U.S. District Judge Ronald S.W. Lew for the Central District of California.

The complaint alleged that Cardoza prepared returns that fraudulently claimed tax deductions for his customers, including bogus deductions for medical and dental expenses, charitable contributions, unreimbursed employee business expenses, and car and truck expenses.  According to the complaint, Cardoza also falsely represented to his customers that he was a certified public accountant and that he had obtained a master’s degree in business administration and a doctoral degree.  According to the complaint, since 2008, Cardoza prepared over 5,000 federal tax returns and his fraudulent return preparation resulted in the loss of millions of dollars to the U.S. Treasury.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2014.  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department website.

Related Materials:

United States v. Robert L. Cardoza
Final Judgment of Permanent Injunction Against Robert L. Cardoza

A campaign manager was arrested late yesterday and accused of paying voters to vote in the November 2012 school board election in Donna, Texas.

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 made the announcement. 

The four-count indictment charges Francisco “Frankie” Garcia, 47, of Donna, with conspiring to buy votes, paying for votes, and aiding and abetting others to buy votes stemming from the vote-buying scheme.   Garcia was arrested the evening of Sept. 18, 2014, in Alton, Illinois, and will make his initial appearance in the Southern District of Illinois this afternoon.  The indictment was returned under sea Sept. 16, 2014, and unsealed today following his arrest.

According to the indictment, during the November 2012 general election, Garcia worked as a campaign manager for four candidates to the Donna School Board.  During that time, he allegedly bought votes and worked with other campaign workers to pay voters and to offer to pay voters in this election to vote for particular candidates.  The indictment alleges that Garcia paid voters by giving the voters either cocaine or cash in exchange for their votes.

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

Three campaign workers – Rebecca Gonzalez, 44, and Diana Balderas Castaneda, 48, both of Donna, Texas, and Guadalupe Escamilla, 72, of Weslaco, Texas – previously pleaded guilty to vote-buying charges stemming from this election. 

This case is being investigated by the FBI, and is being prosecuted by Trial Attorneys Monique Abrishami and Jennifer Blackwell of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Leo J. Leo of the Southern District of Texas.

Three patient recruiters were sentenced to prison today for their participation in a $20 million health care fraud scheme involving defunct home health care company Trust Care Health Services Inc. (Trust Care).

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 Acting 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 Darrin P. Gayles of the Southern District of Florida imposed the sentences.

Estrella Perez, 57, of Coral Gables, Florida, was sentenced to serve 37 months in prison, followed by three years of supervised release, and ordered to pay $1,172,162 in restitution.  Solchys Perez, 34, of Miami, was sentenced to serve 30 months in prison, followed by three years of supervised release, and ordered to pay $746,600 in restitution.  Abigail Aguila, 40, of Miami, was sentenced to serve 30 months in prison, followed by three years of supervised release, and ordered to pay $491,438 in restitution.  On July 10, 2014, Estrella Perez and Solchys Perez pleaded guilty to conspiracy to commit health care fraud, and Aguila pleaded guilty to conspiracy to defraud the United States and receive health care kickbacks.

According to court documents, Estrella Perez, Solchys Perez, and Aguila recruited patients for Trust Care, a Miami home health care agency, in exchange for kickbacks paid in cash or by check to the defendants or their shell companies.  In turn, Trust Care billed the Medicare program for home health care and therapy services that were not medically necessary or were not provided.

Estrella Perez and Solchys Perez also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, plans of care and medical certifications for their recruited patients.  Co-conspirators at Trust Care then used these documents to fraudulently bill the Medicare program for services.

From March 2007 through January 2010, Trust Care submitted approximately $20 million in false claims for home health services.  Medicare paid Trust Care approximately $15 million for these fraudulent claims. 

On Sept. 16, 2014, another patient recruiter, Monica Macias, was sentenced to serve 24 months in prison for her participation in the same scheme. 

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  This case is being prosecuted by Trial Attorneys A. Brendan Stewart and 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 and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

# # #

A federal grand jury in Detroit returned two separate indictments against seven executives from two Japanese manufacturers of automotive parts for their participation in a conspiracy to fix prices of certain automotive parts, the Department of Justice announced today.

A three-count indictment was filed today in the U.S. District Court for the Eastern District of Michigan.  Count one charges Atsushi Ueda, Minoru Kurisaki, and Hideyuki Saito of Mitsubishi Electric Corp. (MELCO) with conspiring to fix the prices of certain automotive products, including starter motors, alternators and ignition coils, sold to Ford Motor Company, General Motors LLC, Chrysler Group LLC, Fuji Heavy Industries Ltd., Nissan Motor Company Ltd., and Honda Motor Company Ltd. in the United States and elsewhere. 

Count two charges Kurisaki and Saito with knowingly conspiring to obstruct justice by destroying documents and corruptly persuading, and attempting to persuade others, to destroy documents. 

Count three charges Saito with knowingly and corruptly persuading, and attempting to persuade, executives to destroy documents and delete electronic data that may contain evidence of antitrust crimes in the United States and elsewhere.

Ueda and Kurisaki served as President and General Manager, respectively, in the Automotive Equipment Group.  They are no longer employed by MELCO.  Saito currently serves as a high-level manager within the Automotive Equipment Group at MELCO. 

A one-count indictment, also filed today in the U.S. District Court for the Eastern District of Michigan, charges Takashi Toyokuni, Ken Funasaki, Kazunobu Tsunekawa and Tomiya Itakura of Hitachi Automotive Systems Ltd. with conspiring to fix the prices of various automotive parts, including starter motors, alternators, air flow meters, valve timing control devices, fuel injection systems, electronic throttle bodies, ignition coils and inverters and/or motor generators sold to various automobile manufacturers such as, Ford Motor Co., General Motors LLC, Nissan Motor Co. Ltd., Toyota Motor Corp., and Honda Motor Co. Ltd., in the United States and elsewhere.

Toyokuni, Funasaki, Tsunekawa, and Itakura all served as high-level managers  in the Business Planning Department at Hitachi Automotive during the charged conspiracy and currently serve in various senior management positions at the company.

“Protecting American consumers from anticompetitive practices is our top priority,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The Antitrust Division will continue to pursue the auto parts makers and executives who engaged in this blatant and harmful criminal scheme.”

Both indictments allege that the executives indicted today participated directly in the conspiratorial conduct, and directed, authorized, and consented to their subordinates’ participation.  The executives are charged with participating in a conspiracy that existed from at least as early as January 2000 and continued until about February 2010.  Among other things, the executives and their subordinates, according to the indictment, participated in meetings with co-conspirators and reached collusive agreements to rig bids, allocate the supply and fix the prices of certain automotive parts sold to automobile manufacturers. 

MELCO is a corporation headquartered in Tokyo, Japan.  MELCO pleaded guilty on Nov. 6, 2013, for its involvement in this conspiracy, and was sentenced to pay a criminal fine of $190 million. 

Hitachi Automotive is a corporation headquartered in Tokyo, Japan.  Hitachi Automotive pleaded guilty on Nov. 6, 2013, for its involvement in this conspiracy, and was sentenced to pay a criminal fine of $195 million.

Including Toyokuni, Funasaki, Tsunekawa, Itakura, Ueda, Kurisaki and Saito, 43 individuals have been charged in the government’s ongoing investigation into 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, 28 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.4 billion in fines.

The seven defendants are charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.  The maximum penalty for obstruction of justice is 20 years in prison and a $250,000 criminal fine for individuals.

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

Attorney General Eric Holder announced today the launch of the Justice Department’s National Initiative for Building Community Trust and Justice.  Funded through a $4.75 million grant, the initiative will create a  substantial investment in training, evidence-based strategies, policy development and research to combat distrust and hostility between law enforcement and the communities they serve.  Recent protests in Ferguson, Missouri, following an officer-involved shooting have brought national attention to the importance of strong police-community relationships, which has been a priority for the Justice Department under Attorney General Holder.

“The events in Ferguson reminded us that we cannot allow tensions, which are present in so many neighborhoods across America, to go unresolved,” said Attorney General Holder.  “As law enforcement leaders, each of us has an essential obligation – and a unique opportunity – to ensure fairness, eliminate bias, and build community engagement.  The National Initiative for Building Community Trust and Justice represents a major step forward in resolving long standing tensions in many of America’s communities and it will allow us to build on the pioneering work that the Justice Department and our law enforcement partners across the country are already doing to strengthen some of our nation’s most challenged areas.”

The initiative, which will be an ongoing partnership with the Justice Department, will provide training to law enforcement and communities on bias reduction and procedural fairness and will apply evidence-based strategies in five pilot sites around the country.  It will also establish a clearinghouse where information, research, and technical assistance are readily accessible for law enforcement, criminal justice practitioners and community leaders.

The three year grant has been awarded to a consortium of national law enforcement experts led by John Jay College of Criminal Justice.  Yale Law School, the Center for Policing Equity at UCLA and the Urban institute make up the rest of the consortium.  The initiative will be guided by a board of advisors which will include national leaders from law enforcement, academia and faith-based groups, as well as community stakeholders and civil rights advocates.

In a holistic approach, the initiative will simultaneously address the tenets of procedural justice, reducing implicit bias and facilitating racial reconciliation.  The initiative will compliment and be advised by other Justice Department components such as the Office of Justice Programs, the Office of Community Oriented Policing Services, the Civil Rights Division and the Community Relations Service.

This Initiative addresses a recommendation in the My Brother’s Keeper Task Force report released in May.  The Task Force recommended the Department of Justice establish a vehicle to build capacity in communities and build the evidence base around enhancing procedural justice, reducing bias and supporting reconciliation in communities where trust has been harmed.

Calumite Company LLC (Calumite), a manufacturer of an additive used in the production of glass, entered a plea of guilty today in U.S. District Court in Hammond, Indiana, to two Clean Air Act false statement violations.  The company has agreed to pay a $325,000 fine, serve a two-year term of probation, and implement an environmental compliance plan that includes an annual environmental compliance training program.  Sentencing will be scheduled for a later date. 

Calumite, located near the shores of Lake Michigan in Portage, Indiana, manufactures and sells a powdery substance of the same name to various glass manufacturers.  The company collects slag, a waste product of the steel industry, dries it in a hot gas oven, crushes it into a fine powder, and then ships it off-site to glass manufacturers, who use it as an additive to lower the temperature at which glass can be produced. 

Calumite's Portage facility was subject to a Title V Clean Air Act Operating Permit issued by the Indiana Department of Environmental Management (IDEM).  Among other things, the permit required that Calumite operate, maintain, and monitor several “baghouses” on-site that are used to control and minimize emissions of a fine particulate.  One of the baghouses, known as the loadout baghouse, was used to collect emissions of particulate that occurred during the loading of product onto tractor trailers and rail cars for shipment to customers.

A differential pressure gauge (DP gauge) attached to each baghouse continuously monitored and measured the efficiency and effectiveness of the baghouses and helped to determine whether they were operating properly.  Calumite’s permit required that DP gauges on the baghouses be read daily, while the baghouses were operating, and that the results be recorded on daily maintenance log sheets.  The company also was required to submit quarterly reports to IDEM that stated whether the company was in compliance with permit requirements. 

From Dec. 5, 2008, through late July 2009, the company did not maintain the loadout baghouse in operating condition and the DP gauge was broken.  Nevertheless, during this same time period, employees continued to load tractor trailers and rail cars with product for shipment off-site.  Calumite employees knowingly continued to routinely fill out daily logs that falsely reflected DP gauge monitoring readings that were within the range allowed by the permit, and caused false information to be submitted to IDEM in the company’s quarterly reports. 

The Clean Air Act makes it a crime to knowing make a material false statement or omit material information from a document that is required to be filed or maintained under the statute.  Both the daily maintenance logs and the quarterly reports were required by Calumite’s permit and the Clean Air Act.   

The case was investigated by the Northern District of Indiana Environmental Crimes Task Force, including agents from the U.S. Environmental Protection Agency’s Criminal Investigation Division.  The case was prosecuted by the U.S. Attorney’s Office for the Northern District of Indiana and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.  

A Plymouth, Michigan, man pleaded guilty today to wire fraud and tax evasion in the U.S. District Court for the Eastern District of Michigan, the Justice Department and the Internal Revenue Service (IRS) announced. 

­According to court documents, Michael Stover was the president of Omni Facility Services, a janitorial company located in Southfield, Michigan, and as part of his responsibilities Stover approved and paid subcontractors.  Stover created a fictitious subcontractor called Envirovac Inc., and from 2004 through 2010, he created fictitious invoices from Envirovac that billed Omni for work that was never performed.  Stover then approved payment of those invoices on Omni’s behalf, and over the course of this scheme, Stover embezzled approximately $2,178,423 from Omni.  On his tax return for 2007, Stover evaded taxes by not reporting the income he embezzled from Omni. 

Stover faces a statutory maximum sentence of 20 years in prison on the wire fraud count and five years in prison on the tax evasion count.  He also faces three years of supervised release and a maximum fine of $250,000 for each count.  U.S. District Judge Stephen J. Murphy set sentencing for Jan. 23, 2015. 

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

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

U.S. Attorney Peter Smith for the Middle District of Pennsylvania, Special Agent in Charge John Kelleghan for Philadelphia, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Special Agent in Charge Sidney M. Simon of the New York Field Office, Office of Export Enforcement, U.S. Department of Commerce announced that yesterday Harold Rinko, 72, of Hallstead, Pennsylvania, appeared before Senior District Court Judge Edwin M. Kosik in Scranton and pleaded guilty to conspiracy to illegally export laboratory equipment, including items used to detect chemical warfare agents, from the United States to Syria, in violation of federal law.

During the guilty plea hearing, Rinko admitted that he conspired to export items from the United States through third party countries to customers in Syria, without the required U.S. Commerce Department licenses. 

According to a factual stipulation signed by Rinko and made part of the record, the conspirators prepared false invoices that undervalued and mislabeled the goods being purchased and also listed false information as to the identity and geographic location of the purchasers of the goods.  The stipulation indicates that the items would be shipped from the United States to Jordan, the United Arab Emirates, and the United Kingdom, and thereafter transshipped to Syria. 

“HSI will use all resources at its disposal to prevent sensitive and restricted technology from being exported to Syria though the black market,” said Special Agent in Charge Kelleghan.  “No good comes of illegal exports to Syria during this time of gross misgovernment and civil strife, and HSI will do all in its power as the principal enforcer of export controls to ensure that sensitive technology doesn’t fall into the wrong hands in Syria.  I applaud our colleagues at the Department of Commerce, along with our law enforcement counterparts in the United Kingdom, who helped us make this complex investigation a success.”

“Today's plea represents the effort of law enforcement agencies working together to make our country safer,” said Simon. “Office of Export Enforcement Special Agents with the U.S. Department of Commerce work tirelessly every day to pursue those who flout our export control laws and attempt to supply anyone with technology that threatens our national security. We will seek and arrest violators wherever located, worldwide, and we will continue to leverage our unique authorities as the only federal law enforcement agency exclusively dedicated to enforcing dual-use export violations.”

A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.  Rinko is facing a potential maximum sentence of five years’ imprisonment, a fine of $250,000, and a three-year term of supervised release.

Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs.  For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

The case was investigated by the U.S. Immigration and Customs, Homeland Security Investigations (HSI) in partnership with the U.S. Department of Commerce, Office of Export Enforcement and assigned to Assistant U.S. Attorney Todd K. Hinkley and Trial Attorney Mariclaire Rourke with the Department of Justice, National Security Division, Counterespionage Section. 

WASHINGTON – Assistant Attorney General  for National Security John P. Carlin and U.S. Attorney Florence T. Nakakuni for the District of Hawaii announced today that Benjamin Pierce Bishop, 60, a former Honolulu, Hawaii, civilian defense contractor and retired lieutenant colonel in the U.S. Army, was sentenced today by U.S. District Judge Leslie E. Kobayashi to serve 87 months imprisonment and three years’ supervised release for willfully communicating classified national defense information to a person not authorized to receive it and unlawfully retaining classified national defense information at his home. 

Bishop pleaded guilty to the two charges on March 13, 2014.  In a plea agreement filed with the court and during court proceedings, Bishop admitted that, on March 12, 2012, he e-mailed classified information to a 27-year-old Chinese woman with whom he had a romantic relationship and who was present in the United States as a graduate student on a J1 Visa. 

The classified information related to joint training and planning sessions between the United States and the Republic of Korea and was classified at the SECRET level.  Bishop also admitted to unlawfully retaining at his residence multiple classified documents that related to the national defense, including the U.S. Armed Forces Defense Planning Guide for years 2014 through 2018, a document entitled Optimizing U.S. Force Posture in the Asia‑Pacific, the U.S. Department of Defense China Strategy, the 2010 Guidance for Employment of Force (GEF) and a classified photograph of a Chinese naval asset that Bishop retrieved from classified sources based on a request from the Chinese woman.  The documents had been removed from Bishop’s workplace at U.S. Pacific Command. 

  “Willfully communicating national defense information to a person not entitled to receive it is a serious threat to our national security,” said Assistant Attorney General Carlin.  “In committing this crime, Bishop violated his oath to protect the classified information with which he was entrusted.  This conduct is unacceptable and we will continue to investigate and seek to hold accountable those who engage in it.”

“We remain steadfast and resolute in our pursuit of those who violate their sworn security agreements and divulge our nation’s secrets to foreign nationals and others,” said U.S. Attorney Nakakuni.  “This is the second major espionage case prosecuted in the District of Hawaii, and is particularly troublesome because it involves the communication of classified information to a citizen of the People’s Republic of China.”

This case was investigated by the FBI and the Naval Criminal Investigative Service.  The case was prosecuted by Assistant U.S. Attorney Ken Sorenson of the U.S. Attorney’s Office for the District of Hawaii and Senior Trial Attorney Robert E. Wallace Jr. of the Counterespionage Section of the Justice Department’s National Security Division.  

# # #

A Plus Home Health Care Inc. and its owners, Tracy Nemerofsky and her father, Stephen Nemerofsky, have agreed to pay $1.65 million to the United States to settle allegations that A Plus paid spouses of referring physicians for sham marketing positions in order to induce patient referrals, the Justice Department announced today.  A Plus is a home health care company located in Fort Lauderdale, Florida. 

 

“Kickback schemes drive up the cost of health care and cause physicians to make decisions based on their own bottom line instead of what is in the best interest of their patients,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “We will hold any health care company, and the individuals that own those companies, responsible for using kickbacks to line their pockets at the expense of taxpayers and federal health care beneficiaries.” 

 

The United States filed a complaint against A Plus and Tracy Nemerofsky alleging that, beginning in 2006, A Plus engaged in a scheme to increase Medicare referrals in the heavily saturated home health care market in southern Florida.  The company allegedly hired at least seven physicians’ spouses and one physician’s boyfriend to perform marketing duties, but required the spouses and boyfriend to perform few, if any, actual job duties.  Instead, the spouses’ and boyfriend’s salaries allegedly served as an inducement and reward for the physicians’ referrals of Medicare patients to A Plus.  According to the complaint, Tracy Nemerofsky fired at least two spouses when their husbands failed to refer a certain number of patients to A Plus.  Tracy Nemerofsky allegedly reaped large rewards for the scheme, receiving a salary of $685,000 from A Plus in 2010, when A Plus’ business increased as a result of Medicare referrals generated from the sham marketer scheme. 

 

“Kickback schemes undermine the integrity of our public health care programs,” said U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida.  “The settlement announced today holds A Plus accountable for its submission of false claims, including restoring funds paid as a result of the false claims to Medicare.  We will not relent in our efforts to combat these kinds of fraudulent schemes.”

 

“Home health care company owners who engage in such blatant, aggressive kickback schemes to get physicians to refer Medicare patients for the company’s services will instead pay for their improper conduct at the settlement table,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  “We will continue to crack down on such illegal, wasteful business kickback arrangements, which undermine impartial medical judgment, corrode the public’s trust in the health care system and divert scarce Medicare funding.”

 

The settlement resolves allegations that were originally brought by William Guthrie, a former director of development at A Plus, under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for the submission of false claims and to receive a share of any recovery.  The False Claims Act authorizes the United States to intervene in such lawsuits and take over primary responsibility for litigating them, as the United States did here.  Guthrie’s share of this settlement has not yet been determined. 

 

The United States previously settled with five couples that allegedly accepted payments from A Plus:  Steven and Fortuna Hornreich, Mark and Meredith Rogovin, Sam and Christy Sareh, Gary and Stacy Wolfson, and Keifer Wyble and Nuria Rodriguez. 

 

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 $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.

 

The investigation of this matter reflects a coordinated effort among the Commercial Litigation Branch of the Civil Division, the U.S. Attorney’s Office for the Southern District of Florida, HHS-OIG and the FBI. 

 

The lawsuit is captioned U.S. ex rel. Guthrie v. A Plus Home Health Care, Inc., 12 CV 60629 (S.D. Fla.).  The claims settled by the lawsuit are allegations only, and there has been no determination of liability.

A federal district judge in the U.S. District Court for the Middle District of Florida has permanently barred Jeanne Covington, of Tampa, Florida, and her company, Jeanne’s Tax Preparation and Bookkeeping Inc., from preparing federal income tax returns for others, the Justice Department announced today.

The suit alleges that Covington has prepared returns that unlawfully understate income tax liabilities and overstate refunds through a variety of schemes, including fabricating or inflating business expenses that Covington’s customers never paid or incurred.  The complaint also alleges that Covington prepared returns that wrongfully claimed tax credits, including education credits and the residential energy credit.  Altogether, the government complaint alleges that Covington’s activities may have caused millions of dollars in loss to the U.S. Treasury.

Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014.  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

USA v. Jeanne Covington, et al.
Order

WASHINGTON – In a settlement with the United States, Consumers Energy, a subsidiary of CMS Energy Corporation, has agreed to install pollution control technology, continue operating existing pollution controls and comply with emission rates to reduce harmful air pollution from the company’s five coal-fired power plants located in West Olive, Essexville, Muskegon and Luna Pier, Michigan, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.  The settlement will resolve claims that the company violated the Clean Air Act by modifying their facilities in a way that caused the release of excess sulfur dioxide and nitrogen oxide.

EPA expects that the actions required by the settlement will reduce harmful emissions by 46,500 tons per year, which includes approximately 38,400 tons per year of sulfur dioxide (SO2) and 8,100 tons per year of nitrogen oxide (NOx).  The company estimates that it will spend approximately $1 billion to implement the required measures.  The pollution reductions will be achieved through the installation, upgrade, and operation of state-of-the-art pollution control devices designed to reduce emissions and protect public health.  Consumers Energy will also take several coal-fired units offline and may repower additional coal-fired units with natural gas.

The settlement also requires that the company pay a civil penalty of $2.75 million to resolve Clean Air Act violations and spend at least $7.7 million on environmental projects to help mitigate the harmful effects of air pollution on the environment and benefit local communities. 

“Today’s settlement will bring cleaner air to residents in Michigan by removing tens of thousands of tons of harmful air pollution from the atmosphere,” said Acting Assistant Attorney General Sam Hirsch of the Justice Department’s Environment and Natural Resources Division.  “This agreement will render benefits to communities far into the future with pollution-reduction projects that will improve public health and help restore natural resources downwind of the plants."  

“The required pollution controls and funding for mitigation projects will reduce harmful pollution in American communities,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “This case demonstrates that energy can be provided to local communities in a responsible way that significantly reduces sulfur dioxide and nitrogen oxide known to contribute to serious health concerns.”

“Michigan’s greatest assets are our natural resources,” said U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan.  “This settlement will protect the health of Michigan residents and ensure clean air for future generations.”   

The settlement requires that the company install pollution control technology and implement other measures to reduce sulfur dioxide, and particulate matter emissions from its five coal-fired power plants, comprising 12 operating units.  Among other requirements, the company must comply with declining system-wide limits for SO2 and NOx and meet emission rates.  In addition, the company must retire or refuel two units to natural gas and retire an additional five units.

SO2 and NOx, two predominant pollutants emitted from power plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze.  These pollutants are converted in the air to particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death.

The settlement also requires Consumers Energy to spend at least $7.7 million on projects that will benefit the environment and local communities, including paying $500,000 to the National Park Service for the restoration of land, watersheds, vegetation and forests or combating invasive species in the Cuyahoga Valley National Park and the Sleeping Bear Dunes National Lakeshore Park. 

The remaining $7.2 million will be spent on a series of mitigation projects.  Potential projects include efforts to reduce vehicle emissions, install renewable energy and energy efficiency projects, replace or retrofit wood burning appliances and protect and restore ecologically significant lands in Michigan.  Consumers Energy has five years to complete its selected projects.

This settlement is part of EPA’s national enforcement initiative to control harmful emissions from large sources of pollution, which includes coal-fired power plants, under the Clean Air Act’s Prevention of Significant Deterioration requirements.  The total combined SO2 and NOx emission reductions secured from all these settlements will exceed 2 million tons each year once all the required pollution controls have been installed and implemented.

Consumers Energy is Michigan’s second-largest electric and natural gas utility, providing electric service to more than 6 million people in the Lower Peninsula of Michigan.

The settlement was lodged with the U.S. District Court for the Eastern District of Michigan and is subject to a 30-day public comment period and final court approval.  It can be viewed at www.justice.gov/enrd/Consent_Decrees.html.

More on the settlement:  www2.epa.gov/enforcement/consumers-energy-clean-air-act-settlement

More information about EPA’s enforcement initiative: www.epa.gov/compliance/data/planning/initiatives/2011airpollution.html

ROCHESTER, N.Y.— Attorney General Eric Holder, Assistant Attorney General for National Security John Carlin and U.S. Attorney William J. Hochul Jr. for the Western District of New York announced today that a federal grand jury in Rochester has returned a seven-count indictment charging Mufid A. Elfgeeh, 30, of Rochester, with three counts of attempting to provide material support and resources to the Islamic State of Iraq and the Levant (ISIL), aka the Islamic State of Iraq and Syria (ISIS), a designated foreign terrorist organization.  In addition, Elfgeeh is also charged with one count of attempted murder of current and former members of the United States military, one count of possessing firearms equipped with silencers in furtherance of a crime of violence, and two counts of receipt and possession of unregistered firearm silencers.

“We will remain aggressive in identifying and disrupting those who seek to provide support to ISIL and other terrorist groups that are bent on inflicting harm upon Americans,” said Attorney General Holder.  “As this case shows, our agents and prosecutors are using all the investigative tools at our disposal to break up these plots before individuals can put their plans into action.  We are focused on breaking up these activities on the front end, before supporters of ISIL can make good on plans to travel to the region or recruit sympathizers to this cause.”

“Disrupting and holding accountable those who seek to provide material support to foreign terrorist organizations is and shall remain a critical national security priority,” said Assistant Attorney General Carlin.  “I want to thank the agents, analysts and prosecutors who are responsible for the arrest and charges in this case.”

“With today's indictment of Mufid Elfgeehr, the government demonstrates that it will use all available tools to disrupt and defeat ISIS,” said U.S. Attorney Hochul.  “The case also demonstrates that by working with the community, law enforcement is able to identify those who would harm our country or our returning soldiers.”

The material support charges each carry a maximum sentence of 15 years in prison, the attempted murder charge carries a maximum sentence of 20 years in prison, the firearms possession charge carries a mandatory minimum sentence of 30 years and a maximum of life in prison, and the firearm silencer charges each carry a maximum sentence of 10 years in prison.

According to court records, Elfgeeh attempted to provide material support to ISIS in the form of personnel, namely three individuals, two of whom were cooperating with the FBI.  Elfgeeh attempted to assist all three individuals in traveling to Syria to join and fight on behalf of ISIS.  Elfgeeh also plotted to shoot and kill members of the United States military who had returned from Iraq.  As part of the plan to kill soldiers, Elfgeeh purchased two handguns equipped with firearm silencers and ammunition from a confidential source.  The handguns were made inoperable by the FBI before the confidential source gave them to Elfgeeh.

According to court documents, in 2013 and into early 2014, Elfgeeh encouraged the two confidential sources (CS-1 and CS-2) to travel overseas to engage in violent jihad.  After CS-1 and CS-2 agreed to travel to Syria to join ISIS, Elfgeeh took several steps to prepare them for the trip.  Elfgeeh also sent $600 to an individual in Yemen for the purpose of assisting that individual in traveling from Yemen to Syria for the purpose of joining and fighting on behalf of ISIS.

Court documents also indicate that Elfgeeh first discussed the idea of shooting United States military members in December 2013 when he told CS-2 that he was thinking about getting a gun and ammunition, putting on a bulletproof vest, and “just go[ing] around and start shooting.”  In February 2014, Elfgeeh told CS-2 that he needed a handgun and silencer.  Elfgeeh later gave CS-2 $1,050 in cash to purchase two handguns equipped with silencers and ammunition.  On May 31, 2014, CS-2 delivered the two handguns equipped with silencers and ammunition to Elfgeeh.  After Elfgeeh took possession of the items, he was arrested by members of the Rochester Joint Terrorism Task Force.  Elfgeeh is currently being held in custody.  

The indictment is the result of an investigation on the part of the Rochester Joint Terrorism Task Force of the Federal Bureau of Investigation.

The defendant is being prosecuted by Assistant United States Attorneys Brett A. Harvey and Frank H. Sherman, with the assistance of Trial Attorney Steven P. Ward of the National Security Division’s Counterterrorism Section.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent unless and until proven guilty.

###

 

A Detroit-area hematologist-oncologist pleaded guilty today for his role in a health care fraud scheme, admitting that he administered unnecessary chemotherapy to fraudulently bill the Medicare program and private insurance companies.  According to court records, the scheme enabled the doctor to submit approximately $225 million in claims to Medicare over six years.

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, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.

Farid Fata, M.D., 49, of Oakland Township, Michigan, pleaded guilty today before U.S. District Judge Paul D. Borman of the Eastern District of Michigan to 13 counts of health care fraud, one count of conspiracy to pay or receive kickbacks and two counts of money laundering.  At his sentencing, scheduled for Feb. 23, 2014, Fata faces a statutory maximum of 175 years in prison.

“At a time when they are most vulnerable and fearful, cancer patients put their lives in the hands of doctors and endure risky treatments at their recommendation,” said Assistant Attorney General Caldwell.  “Dr. Fata today admitted he put greed before the health and safety of his patients, putting them through unnecessary chemotherapy and other treatments just so that he could collect additional millions from Medicare.  The mere thought of what he did is chilling.  Thanks to the quick action of our partners, he was arrested and has now admitted his guilt.”

“This defendant not only stole funds from taxpayer funded insurance programs, but he also deliberately administered unnecessary chemotherapy so that he could bill insurers for expensive chemotherapy treatments,” said U.S. Attorney McQuade.  “His exploitation of patients for his own profit caused victims to suffer physically and emotionally.”

“A little more than a year ago, the FBI and its law enforcement partners acted swiftly to arrest Dr. Farid Fata and shield his patients from further harm,” said FBI Special Agent in Charge Abbate.  “Today’s plea is the culmination of the diligent investigative work jointly conducted by the FBI, IRS, the Department of Health and Human Services, and prosecutors to protect the public and ensure that justice is served.  Our hope is that this outcome offers some measure of solace to the victims and reassures the community of our collective resolve to prevent similar violations of patients’ trust.”

“Dr. Fata’s utter disregard for his patients’ welfare was quite simply deplorable,” said HHS-OIG Special Agent in Charge Pugh.  “The OIG will ceaselessly work to bring such criminals to the justice they deserve.”

“It’s exceptionally distressing to see this kind of fraud committed by individuals in occupations that profess high ethical standards," said IRS-CI Chief Weber.  “When doctors commit fraud through their profession, it is not only a violation of the public trust but also a complete renunciation of their Hippocratic oath.  Those who commit Medicare fraud are pick-pocketing from every American taxpayer.”

Fata admitted that he is a licensed medical doctor who owned and operated a cancer treatment clinic, Michigan Hematology Oncology, P.C. (MHO), which had locations in Rochester Hills, Clarkston, Bloomfield Hills, Lapeer, Sterling Heights, Troy and Oak Park, Michigan.  He also owned a diagnostic testing facility, United Diagnostics PLLC, located in Rochester Hills, Michigan.

In his guilty plea today, Fata admitted to prescribing and administering aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to patients who did not need them in order to increase his billings to the Medicare program and other insurance companies.  Fata then submitted fraudulent claims to Medicare and other insurers for these unnecessary treatments.

Fata submitted approximately $225 million in claims to Medicare between August 2007 and July 2013, of which approximately $109 million was for chemotherapy and other cancer treatments.  Medicare paid over $91 million to Fata, of which over $48 million was for chemotherapy and other cancer treatments.

Fata also admitted to soliciting kickbacks from Guardian Angel Hospice and Guardian Angel Home Health Care in exchange for his referral of patients to those facilities.

Fata further admitted to using the proceeds of the health care fraud at his medical practice, MHO, to promote the carrying on of additional health care fraud at United Diagnostics, where he administered unnecessary and expensive PET (positron emission tomography) scans for which he billed a private insurer.

This case was investigated by the FBI, HHS-OIG and IRS-CI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  This case is being prosecuted by Deputy Chief Gejaa T. Gobena, Assistant Chief Catherine K. Dick and Trial Attorney Matthew C. Thuesen of the Fraud Section, and by Health Care Fraud Unit Chief Wayne F. Pratt, Deputy Chief Sarah Resnick Cohen and White Collar Crime Unit Chief John K. Neal of the U.S. Attorney’s Office for the Eastern District of Michigan.


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

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

For further information about this case, visit: http://www.justice.gov/usao/mie/news/2013/2013_9_18_2013_dr_fata.html.

# # #

Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division has signed an antitrust cooperation agreement with the Colombian antitrust agency on behalf of the Department of Justice.  The agreement also was signed by Federal Trade Commission Chairwoman Edith Ramirez, and went into effect today with the signature of Pablo Felipe Robledo, Colombia’s Superintendent of Industry and Commerce.  The agreement will enable the antitrust agencies in the two countries to further enhance their law enforcement relationship. 

The new agreement contains provisions for antitrust enforcement cooperation and coordination, conflict avoidance and consultations with respect to enforcement actions, and technical cooperation.  The agreement also contains confidentiality protections.

The U.S. antitrust agencies and Colombia’s Superintendence of Industry and Commerce, the agency that enforces Colombia’s competition law, have built a strong enforcement relationship over the years, both bilaterally and under the terms of the U.S.-Colombia Trade Promotion Agreement.

“The Colombians have a proven antitrust system, and this agreement will allow us to work more closely with our colleagues in Bogotá,” said Assistant Attorney General Baer.  “Enforcement cooperation based on sound policies is critical to maintaining competitive markets in the Americas, particularly for economies as linked as ours.”

“Colombia has a well-developed competition regime, and we have a strong working relationship with its competition agency,” said Chairwoman Ramirez.  “We look forward to working with the Superintendence to advance our shared goal of promoting convergence around sound competition policy throughout the hemisphere.”

Highlights of the new agreement include:

• Mutual acknowledgment of the importance of antitrust cooperation, including information sharing and possible coordination of enforcement actions with regard to related matters;

• Agreement to take one another’s important interests into account in order to minimize possible conflicts arising out of antitrust enforcement actions; and

• Agreement to maintain the confidentiality of any sensitive information provided by the other party.

The agreement entering into force today does not change existing law in either country.  Colombia has had a law dedicated to the preservation of competition since 1959.  This cooperation agreement is similar in substance to those previously signed by the U.S. antitrust agencies with other jurisdictions in the Americas, including Brazil, Canada, Chile and Mexico.

According to the Office for the United States Trade Representative, Colombia is currently the United States’ 21st-largest goods trading partner, with $40 billion in total (two way) goods trade during 2013.  Goods exports totaled $19 billion, while imports totaled $22 billion.

DOJ MEDIA CONTACT:     Emily Pierce, Office of Public Affairs

                                                202-514-2007

FTC MEDIA CONTACT:     Peter Kaplan, Office of Public Affairs

                                                202-236-2334

The general manager of a Southern California ambulance company pleaded guilty yesterday in Los Angeles to conspiracy to commit Medicare fraud, conspiracy to obstruct a Medicare audit, and making materially false statements to law enforcement officers.

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

Wesley Harlan Kingsbury, 34, of Bloomington, California, pleaded guilty to the charges before U.S. District Judge Dale S. Fischer.  Sentencing is scheduled for Feb. 9, 2015.

According to court documents, Kingsbury was the general manager of Alpha Ambulance Inc., which specialized in the provision of non-emergency ambulance transportation services to Medicare beneficiaries, primarily to and from dialysis treatments.  Between April 2010 and July 2012, Kingsbury conspired with Alex Kapri and Aleksey (Russ) Muratov, the owners of Alpha Ambulance, as well as the training supervisor Danielle Medina, to bill Medicare for ambulance transportation services for individuals that Kingsbury knew did not need to be transported by ambulance.  In addition, as general manager, Kingsbury instructed emergency medical technicians (EMTs) that worked at Alpha Ambulance to conceal the true medical condition of patients they were transporting by altering requisite paperwork and creating false reasons to justify the transportation services. 

In early 2012, Medicare notified Alpha Ambulance that the company would be subject to a Medicare audit.  In response, Kingsbury and his co-conspirators altered patient documentation to create false justifications for the ambulance transportation services.  Kingsbury and others used light tracing tables to trace over original documents and create falsified patient documentation for the purpose of sending those falsified documents to Medicare, and then they used a paper shredder to destroy the original patient documents.

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

Further according to court documents, in April 2012, Kingsbury was approached by law enforcement officers and was asked to assist with the investigation into Alpha Ambulance.  Kingsbury disclosed to the owners of Alpha Ambulance the names of the law enforcement officers who were conducting the investigation and the questions they had asked Kingsbury about the company.  On May 1, 2012, Kingsbury falsely denied to the law enforcement agents that he had previously disclosed that information to the owners of Alpha.

Kapri, Muratov and Medina pleaded guilty to conspiracy to commit health care fraud on October 28, 2013.  They were sentenced to terms of imprisonment of 75 months, 108 months, and 30 months, respectively.

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

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

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

# # #

A dual United States-Costa Rican citizen pleaded guilty today for his role in a $1.88 million sweepstakes fraud scheme that defrauded hundreds of elderly Americans.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Anne M. Tompkins of the Western District of North Carolina made the announcement.

Geoffrey Alexander Ramer, 34, of Costa Rica, pleaded guilty before U.S. Magistrate Judge David S. Cayer of the Western District of North Carolina to wire fraud and money laundering in connection with the telemarketing fraud scheme. Sentencing will be scheduled at a later date.

“Ramer preyed upon some of the most vulnerable members of our society, callously and repeatedly defrauding elderly Americans by stealing their life savings,” said Assistant Attorney General Caldwell. “We hope that today's guilty plea brings some solace to his victims. This prosecution sends a clear message to the next would-be con-artist: in protecting our citizens, the reach of the Justice Department will not stop at our country's borders.

“Ramer and his fellow con artists swindled their victims and pocketed people’s life savings,” said U.S. Attorney Tompkins.  “If conscience is not enough to deter scammers from taking advantage of the elderly and vulnerable, the certainty that justice is coming should.”

According to his plea agreement, from 2008 through December 2013, Ramer owned and operated call centers located in Costa Rica. Ramer and his co-conspirators called U.S. residents, many of whom were elderly, and falsely informed them that they had won a substantial cash prize in a sweepstakes. The victims were told that in order to receive the prize, they had to send money to Costa Rica for a purported refundable insurance fee. After receiving the fee, Ramer and his co-conspirators contacted the victims again, and falsely informed them that the prize amount had increased and, therefore, the victims had to send additional money to pay for new purported fees. These attempts to collect additional money continued until the victims ran out of money or discovered the fraud. To mask that they were calling from Costa Rica, Ramer and his co-conspirators utilized VoIP phones that displayed a (202) area code, giving victims the false impression the calls were coming from Washington, D.C. Ramer often falsely claimed to be calling on behalf of a U.S. federal agency to lure victims into a false sense of security.

Plea documents state that, along with his co-conspirators, Ramer was responsible for causing more than $1.88 million in losses to hundreds of elderly Americans.

The case was investigated by the U.S. Postal Inspection Service, FBI, Internal Revenue Service – Criminal Investigation Division, Federal Trade Commission and the U.S. Department of Health and Human Services. This case is being prosecuted by Senior Litigation Counsel Patrick Donley and Trial Attorney William Bowne of the Criminal Division’s Fraud Section.

 

A federal court has permanently barred Sea Nine Associates Inc.  from promoting and selling an alleged nationwide tax scheme that involved using welfare benefit plans to unlawfully increase and accelerate tax deductions and avoid income taxes, the Justice Department announced today.

On Sept. 12, U.S. District Judge Josephine L. Staton for the Central District of California entered a judgment of permanent injunction against Sea Nine.

According to the complaint, welfare benefit plans permit companies to pool together and make monetary contributions toward the purchase of life insurance for the benefit of each participating company’s employees or principals.  Participants in legitimate welfare benefit plans may be able to deduct their plan contributions as a business expense.  The government alleged that Sea Nine marketed the unlawful welfare benefit plans to more than 200 entities.  The injunction order bars Sea Nine from selling and managing any purported welfare benefit plans.

In the past decade, the department’s Tax Division has obtained more than 500 injunctions to stop tax fraud promoters and tax return preparers.  Information about these cases is available on the department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

United States v. Kenneth Elliott, etc. et al.
Default Judgment and Permanent Injunction Against Sea Nine Associates, Inc.

Episcopal Ministries to the Aging Inc. (EMA), a Maryland not-for-profit corporation that owns skilled nursing facilities, has agreed to pay $1.3 million to the government for submitting false claims to Medicare for unreasonable or unnecessary rehabilitation therapy purportedly provided by RehabCare Group East Inc., a subsidiary of Kindred Healthcare Inc. 

 

“Patient need must dictate the provision of Medicare benefits rather than the fiscal interests of providers,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “ Today’s settlement demonstrates the department’s continued commitment to safeguarding both Medicare beneficiaries and taxpayer dollars by holding accountable all entities involved in billing for unnecessary services, including those that did not directly provide the unnecessary services.”

 

The settlement resolves allegations that EMA submitted false claims for rehabilitation therapy at William Hill Manor, a skilled nursing facility EMA owns in Easton, Maryland.  EMA hired RehabCare to provide rehabilitation therapy services to its patients at that facility starting in 2010.  The government alleges that EMA failed to prevent RehabCare from providing unreasonable or unnecessary therapy to patients in order to increase Medicare reimbursement to the facilities.  The government contended that among other things the reported therapy did not reflect the lower amounts of therapy generally provided to patients over the course of their stay. 

 

The settlement further resolves allegations that EMA failed to prevent other RehabCare practices designed to inflate Medicare reimbursement, including: in lieu of using individualized evaluations to determine the level of care most suitable for each patient’s clinical needs, presumptively placing patients in the highest reimbursement level unless it was shown that the patients could not tolerate that amount of therapy; providing the minimum number of minutes of therapy required to bill at the highest reimbursement level while discouraging the provision of therapy in amounts beyond that minimum threshold, despite the Medicare requirement that the amount of care provided be determined by patients’ clinical needs; arbitrarily shifting the number of minutes of planned therapy between therapy disciplines to ensure targeted reimbursement levels were achieved and reporting estimated or rounded minutes instead of reporting the actual minutes of therapy provided. 

 

“Patients in our nation’s nursing homes should not be left to wonder whether the therapy they receive is based on their own clinical needs, or is instead tied to the financial targets of the companies providing their care,” said U.S. Attorney Carmen M. Ortiz for the District of Massachusetts.  “This settlement makes clear that, when a skilled nursing facility contracts with an outside rehabilitation therapy provider, the facility remains responsible for ensuring that its patients are receiving, and Medicare is paying for, reasonable and necessary care.”

 

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 $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.

 

The case was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Massachusetts, with assistance from the U.S. Department of Health and Human Services-Office of the Inspector General and the FBI .  The claims resolved by the settlements are allegations only, and there has been no determination of liability. 

The Justice Department announced Monday that Attorney General Eric Holder has recorded a video message as part of the Cartoon Network’s “I Speak Up” campaign to combat bullying.  The project urges young people to speak up in order to help bring bullying situations to an end.

 

The goal of the campaign is to collect one million user-generated videos that unite the voices of kids, parents, educators, celebrities and government officials all saying “I Speak Up.”  Attorney General Holder joined other notable voices such as Education Secretary Arne Duncan, as well as actors and professional athletes, in recording a message for the campaign. 

In his video, the Attorney General delivers the following message: “The violence of bullying has a devastating effect on young people.  Help me defend childhood by speaking up for those who – too often – cannot speak for themselves.  I’m Attorney General Eric Holder, and I am joining Cartoon Network to challenge one million people to speak up against bullying.  Please go to StopBullyingSpeakUp.com to learn more.”

 

The full video of the Attorney General’s message is available at https://www.youtube.com/watch?v=NMH5Abirdaw.

Attorney General Eric Holder announced Monday that the Justice Department will launch a new series of pilot programs in cities across the country to bring together community representatives, public safety officials and religious leaders to counter violent extremism. The new programs will be run in partnership with the White House, the Department of Homeland Security, and the National Counterterrorism Center.

 

“Today, few threats are more urgent than the threat posed by violent extremism,” Attorney General said in a video message posted on the Justice Department’s website. “And with the emergence of groups like ISIL, and the knowledge that some Americans are attempting to travel to countries like Syria and Iraq to take part in ongoing conflicts, the Justice Department is responding appropriately.”

The complete text of the Attorney General’s video message is below:

 

“Last week, millions of Americans paused to mark the 13th anniversary of the attacks of September 11, 2001 – the deadliest acts of terror ever carried out on American soil.  For my colleagues at every level of our nation’s Department of Justice, and for me, this anniversary was also a solemn reminder of our most important obligation: to ensure America’s national security and protect the American people from a range of evolving threats.

“Today, few threats are more urgent than the threat posed by violent extremism.  And with the emergence of groups like ISIL, and the knowledge that some Americans are attempting to travel to countries like Syria and Iraq to take part in ongoing conflicts, the Justice Department is responding appropriately.

“Through law enforcement agencies like the FBI, American authorities are working with our international partners and Interpol to disseminate information on foreign fighters in Syria and Iraq, including individuals who have traveled from the United States.  We have established processes for detecting American extremists who attempt to join terror groups abroad.  And we have engaged in extensive outreach to communities here in the U.S. – so we can work with them to identify threats before they emerge, to disrupt homegrown terrorists, and to apprehend would-be violent extremists.  But we can – and we must – do even more.

“Today, I am announcing that the Department of Justice is partnering with the White House, the Department of Homeland Security, and the National Counterterrorism Center to launch a new series of pilot programs in cities across the nation.  These programs will bring together community representatives, public safety officials, religious leaders, and United States Attorneys to  improve local engagement; to counter violent extremism; and – ultimately – to build a broad network of community partnerships to keep our nation safe.  Under President Obama’s leadership, along with our interagency affiliates, we will work closely with community representatives to develop comprehensive local strategies, to raise awareness about important issues, to share information on best practices, and to expand and improve training in every area of the country.

“Already, since 2012, our U.S. Attorneys have held or attended more than 1,700 engagement-related events or meetings to enhance trust and facilitate communication in their neighborhoods and districts.  This innovative new pilot initiative will build on that important work.  And the White House will be hosting a Countering Violent Extremism summit in October to highlight these and other domestic and international efforts.  Ultimately, the pilot programs will enable us to develop more effective – and more inclusive – ways to help build the more just, secure, and free society that all Americans deserve.

“As we move forward together, our work must continue to be guided by the core democratic values – and the ideals of freedom, openness, and inclusion – that have always set this nation apart on the world stage.  We must be both innovative and aggressive in countering violent extremism and combating those who would sow intolerance, division, and hate – not just within our borders, but with our international partners on a global scale.  And we must never lose sight of what violent extremists fear the most: the strength of our communities; our unwavering respect for equality, civil rights, and civil liberties; and our enduring commitment to justice, democracy, and the rule of law.”

 

The full video of the Attorney General’s message is available at http://www.justice.gov/agwa.php.

A Wisconsin pharmacist and a Nevada pharmacologist were arraigned on an indictment today in Federal Court in Central Islip, New York, before United States Magistrate Judge Gary Brown. The defendants are charged with conspiring to supply at least four million misbranded and counterfeit pharmaceuticals to an illegal Internet pharmacy based in Costa Rica that catered to U.S. customers.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; United States Attorney Loretta E. Lynch of the Eastern District of New York; Assistant Director in Charge George C. Venizelos of the FBI’s New York Field Office; Acting Special Agent in Charge James Royal of the U.S. Food and Drug Administration (FDA), Office of Criminal Investigations’ New York Field Office and Special Agent in Charge James T. Hayes Jr. of Homeland Security Investigations’ (HSI) New York Field Office made the announcement.

The 10-count indictment charges Marla Ahlgrimm, 59, of Madison, Wisconsin, and Balbir Bhogal, 67, of Las Vegas, Nevada, with importing and distributing controlled substances and misbranded drugs, trafficking in counterfeit drugs, mail and wire fraud, smuggling and money laundering.

According to the indictment and information presented at the arraignment, from June 2007 through May 2010, Ahlgrimm and Bhogal, who is a dual U.S. and Indian citizen, allegedly arranged for the manufacture in India of millions of tablets of controlled substances, including alprazolam and phentermine, and prescription drugs, including carisoprodol and counterfeit Viagra. Although they did not hold an importer’s license from the Drug Enforcement Administration, the defendants allegedly arranged for the importation of the same drugs into the United States. Neither the incoming packages nor the tablets themselves were labeled or identified as controlled substances or prescription drugs.    

The drugs were allegedly intended to supply an Internet pharmacy based in Costa Rica that catered to customers within the United States, including Brooklyn and Queens, New York. The Internet pharmacy used call centers and websites based outside the United States, but filled the orders from inside the United States using individuals who were not licensed pharmacists to bottle, label and drop-ship the drugs. To facilitate the operation, the defendants allegedly wired money from Costa Rica to the United States and then to India.

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

The case was jointly investigated by the FBI, FDA’s Office of Criminal Investigations, and HSI. The case is being prosecuted by Senior Counsel Evan C. Williams of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney William P. Campos of the Eastern District of New York.

 

The Department of Justice announced today that it filed a motion to show cause why Bayer Corporation should not be held in civil contempt for violating a court order in the U.S. District Court for the District of New Jersey.  The court order, entered in 2007 in United States v. Bayer Corporation, prohibits Bayer from making unsubstantiated claims for any dietary supplement it promotes or sells.  The government alleges in today’s motion that Bayer promotes one of its products, Phillips’ Colon Health, using claims about the product’s purported benefits without having evidence to substantiate those claims. 

 

The court order prohibits Bayer from making any claim about the performance or efficacy of any dietary supplement, multivitamin or weight-control product unless, at the time Bayer makes the claim, the company possesses “competent and reliable scientific evidence” to support the claim.  In its motion, the United States alleges that Bayer expressly claims Phillips’ Colon Health can “defend against” occasional constipation, diarrhea, and gas and bloating, and impliedly claims that Phillips’ Colon Health prevents, treats and cures constipation, diarrhea, and gas and bloating, even though the company lacks competent and reliable scientific evidence for those claims.

 

“Bayer is required to abide by a longstanding court order to back up claims it makes about the products it sells,” said Assistant Attorney General Stuart F. Delery for the department’s Civil Division.  “The Department of Justice will not tolerate companies that seek to gain an unfair advantage over their competitors by promoting to consumers unsubstantiated claims about the health benefits of their products.”

 

In its motion, the United States describes Bayer’s multimillion dollar nationwide marketing campaign for Phillips’ Colon Health, which includes print advertisements and television commercials featuring “The Colon Lady,” in addition to claims on the product’s packaging.  The motion further alleges that consumers have paid hundreds of millions of dollars for Phillips’ Colon Health, even though Bayer lacks the evidence to support the claims of the purported benefits of this product. 

 

The Consumer Protection Branch of the Civil Division and the U.S. Attorney’s Office for the District of New Jersey filed the motion for contempt with the assistance of the Federal Trade Commission (FTC).  The matter is filed as United States v. Bayer Corporation, No. 07-0001, in the District of New Jersey.

 

In 2007, the United States filed a civil complaint against Bayer alleging that Bayer marketed its One-A-Day WeightSmart multivitamin and dietary supplement with unsubstantiated claims that, among other things, One-A-Day WeightSmart helped prevent some of the weight gain associated with a decline in metabolism in users over the age of 30.  The complaint alleged that those unsubstantiated claims violated an order issued in 1991 by the FTC against Bayer’s predecessor, Miles Inc., that required all claims about the benefits of One-A-Day brand vitamins to be substantiated by competent and reliable scientific evidence.

 

In order to resolve the complaint’s allegations, in 2007, Bayer agreed to pay a $3.2 million civil penalty and agreed that it would not make unsubstantiated representations regarding the benefits, performance, efficacy, safety or side effects of any dietary supplement, multivitamin or weight-control product.  In 2007, the U.S. District Court for the District of New Jersey entered an order resolving the complaint’s allegations and prohibiting Bayer from making unsubstantiated claims about its products.

 

Assistant Attorney General Delery commended the efforts of the FTC to investigate Bayer’s compliance with the 2007 court order and for referring this latest matter for enforcement.  This case is being handled by the Civil Division’s Consumer Protection Branch.

 

This motion contains a set of allegations.  If this motion is litigated, the government would need to prove the allegations by clear and convincing evidence.