District Not Recorded

A former salesman at a prominent Los Angeles car dealership and another Southern California man were charged with odometer tampering, the Justice Department announced today. 

Jeffrey Levy, 62, and Shamai Salpeter, 65, both of Woodland Hills, California, were charged in separate criminal informations with conspiracy to commit odometer tampering.

“ Victims of odometer fraud lose thousands of dollars on what can turn out to be unreliable and potentially dangerous vehicles ,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “To help ensure that Americans can have confidence in the cars they buy, we will continue to prosecute car salesmen and others who violate federal law by tampering with a vehicle’s odometer.” 

Levy was a salesman at Galpin Ford in North Hills, California.  Levy referred customers and friends to his co-conspirator, Salpeter, who rolled back odometers in the driveway of his Woodland Hills residence.  Levy is alleged to have known that some of these people had exceeded the maximum allowed mileage under the terms of their leases and wished to avoid fees and penalties.  According to the charges, Levy also knew that other customers wanted to lower the mileage on their odometers to make their vehicles more valuable when they traded in the vehicles.  After Salpeter altered the odometers, Levy’s customers returned or traded in their vehicles with falsified lower mileage readings.  Levy then accepted the vehicles without alerting Galpin Ford that the odometer readings were false, thus defrauding future owners of the vehicles.  Galpin Ford cooperated with the government’s investigation.  

Salpeter altered odometers for friends, acquaintances and strangers, including customers referred by Levy.  Salpeter charged between $100 and $400 per odometer and used electronic tools to set the odometer to the mileage requested by his customer.      

This case was investigated by the National Highway Traffic Safety Administration Office of Odometer Fraud Investigation (NHTSA) and California’s Department of Motor Vehicles.  This case is being prosecuted by Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch.

NHTSA has established a special hotline to handle odometer fraud complaints.  Individuals who have information relating to odometer tampering should call (800) 424-9393 or (202) 366-4761.

An update on the status of the case is available at:  http://www.justice.gov/civil/cpb/cpb_currentcases.html#_Odom More information on odometer fraud is available at: http://www.nhtsa.gov/Odometer-Fraud , and tips on detecting and avoiding odometer fraud are available at: www.nhtsa.gov/staticfiles/nvs/pdf/811284.pdf .

The Department of Justice and the Corporation for National and Community Service (CNCS), which administers AmeriCorps national service programs, has awarded $1.8 million in grants to increase the effective and efficient adjudication of immigration proceedings involving certain children who have crossed the U.S. border without a parent or legal guardian.  The grants will be disbursed through justice AmeriCorps and will enable legal aid organizations to enroll approximately 100 lawyers and paralegals to represent children in immigration proceedings.  The justice AmeriCorps members will also help to identify children who have been victims of human trafficking or abuse and, as appropriate, refer them to support services and authorities responsible for investigating and prosecuting the perpetrators of such crimes.

“The increasing numbers of unaccompanied children appearing in our immigration courts present an urgent challenge: how best to conduct immigration proceedings more efficiently while maintaining our commitment to following the procedures required by law and protecting the rights of these children.” said Attorney General Eric Holder.  “We are addressing that challenge by using these funds to facilitate access to legal representation for some of the most vulnerable of these children.  By increasing the number of represented children, we will enhance the resources available to both the children and the courts to better serve the administration of justice in all cases.”

“Young immigrant children often enter the U.S. after a long and dangerous journey,” said CNCS CEO Wendy Spencer.  “This funding will enable organizations to engage AmeriCorps members in providing critical support for these children, many of whom are escaping abuse, persecution, or violence.  As a result of this partnership, AmeriCorps will play a role in improving the effective and efficient adjudication of these very difficult cases.”

The grants were awarded to Equal Justice Works, Casa Cornelia Law Center, Catholic Legal Services of Miami, Legal Services of South Central Michigan, the Massachusetts Immigrant and Refugee Advocacy Coalition, the New York Immigration Coalition, and the University of Nevada Las Vegas.  Their programs will serve children in immigration court locations in Atlanta, Baltimore, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, El Paso, Las Vegas, Miami, New York, Phoenix, San Antonio, San Diego and Seattle after justice AmeriCorps members attend a national training program later this year.  The training will include immigration laws and regulations applicable to unaccompanied children; immigration proceedings practice and procedure; ethics for professionals working with children and youths; and trauma-informed and culturally-appropriate models of interacting with unaccompanied children.

“After more than a year of planning, we are pleased to see justice AmeriCorps taking flight,” said Associate Attorney General Tony West, who oversaw the development and implementation of the program for the Department of Justice.  “The justice AmeriCorps program will address several important goals: enhancing the efficacy and efficiency of our immigration courts; protecting vulnerable populations; and increasing national service.”

“With the awarding of these grants, the Executive Office for Immigration Review (EOIR) will see an increase in the representation of children in immigration court proceedings,” said EOIR Deputy Director Ana M. Kocur.  “This public-private partnership is the realization of creative government thinking to increase efficiencies in the immigration courts.”

For more information about the justice AmeriCorps program please visit: http://www.nationalservice.gov/programs/americorps.

The justice AmeriCorps program is a strategic partnership between the Department of Justice and the Corporation for National and Community Service to provide legal aid to vulnerable populations.  This particular program responds to Congress’ direction to the Executive Office for Immigration Review “to better serve vulnerable populations such as children and improve court efficiency through pilot efforts aimed at improving legal representation.”

EOIR is an agency within the Department of Justice.  Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to U.S. immigration laws.  EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation.  They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country.  The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges.  EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases.  EOIR is committed to ensuring fairness in all of the cases it adjudicates.

The Corporation for National and Community Service is a federal agency that engages more than five million Americans in service through its AmeriCorps, Senior Corps, Social Innovation Fund and other programs, and leads the president's national call to service initiative United We Serve.  For more information, visit: www.nationalservice.gov.

A federal court in New Orleans has permanently barred a La Place, Louisiana, woman from preparing federal income tax returns for others, the Justice Department announced today.

The injunction, to which Shawanda Nevers, aka Shawanda Bryant, Shawanda Hawkins and Shawanda Johnson, consented, was entered by U.S. District Judge Susie Morgan for the Eastern District of Louisiana.  According to the complaint, Nevers had prepared federal income tax returns in Louisiana through a business named 3LJ’s Industrial Service Solutions LLC.  The complaint alleged that she prepared returns that unlawfully understated income tax liabilities and overstated refunds through a variety of schemes.

According to the complaint, Nevers prepared returns that claimed losses by fabricating expenses for fictitious businesses or overstating expenses incurred by legitimate enterprises.  The deductions for these fictitious or overstated expenses were claimed on a Form Schedule C – Profit or Loss From Business, which Nevers often included in her customers’ returns without their knowledge.  The returns Nevers prepared directed the Internal Revenue Service (IRS) to deposit the resulting refunds into her account, from which she would deduct a fee before remitting the balance to her customers.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2014.  The IRS has tips for choosing a tax preparer on their website.  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:

Order

Today the U.S. Department of Justice Office of Community Oriented Policing Services (COPS Office) released Implementing a Body-Worn Camera Program: Recommendations and Lessons Learned. The report analyzes some of the costs and benefits of law enforcement using body-worn video technology.

“Law enforcement agencies across the nation are contemplating how best to use body-worn cameras and these guidelines will help them weight the costs and benefits,” said COPS Office Director Ronald L. Davis. “There are many considerations when implementing a body-worn camera and this report will help chiefs and sheriffs make the best decision for their jurisdiction.”

The publication was developed jointly by the Police Executive Research Forum (PERF) and COPS through a cooperative agreement under the FY 2013 Community Policing Development Program. PERF conducted research on the use of body-worn cameras, identified promising practices and lessons learned from the field, and produced a set of guidelines for agencies interested in implement a body-worn camera program. Included in this effort was a one-day executive session with more than 200 police chiefs, sheriffs, scholars, representatives from federal criminal justice agencies, and other experts present to share experiences and lessons learned about body-worn cameras, to identify promising practices from the field, and to engage in a dialogue about the issues surrounding cameras.

The publication reviews the perceived benefits of body-worn cameras and considerations surrounding body-worn cameras before proposing a set of comprehensive policy recommendations that reflect the promising practices and lessons that emerged from PERF’s conference and its extensive discussions with police executives and other experts following the conference.

The policy recommendations cover all aspects of what a police department should consider when deciding to use body cameras including:

·          Basic camera usage, such as who will be assigned to wear the cameras and where on the body the cameras are authorized to be placed;

·          Recording protocols, including when to activate the camera, when to turn it off, and the types of circumstances in which recording is required, allowed or prohibited;

·          The process for downloading recorded data from the camera, including who is responsible for downloading, when data must be downloaded, where data will be stored, and how to safeguard against data tampering or deletion;

·          The length of time recorded data will be retained by the agency in various circumstances;

·          The process and policies for accessing and reviewing recorded data, including the persons authorized to access data and the circumstances in which recorded data can be reviewed; and

·          Policies for releasing recorded data to the public, including protocols regarding redactions and responding to public disclosure requests.

All COPS Office publications can be downloaded from the Resource Center and many can be ordered at no cost either through the Resource Center or by contacting the U.S. Department of Justice Response Center at 800-421-6770.

Related Materials:

COPS Office Report

On January 15, 2009, the U.S. Foreign Intelligence Surveillance Court of Review (FISC-R) published an unclassified version of its opinion in In Re: Directives Pursuant to Section 105B of the Foreign Intelligence Surveillance Act, 551 F.3d 1004 (Foreign Intel. Surv. Ct. Rev. 2008). The classified version of the opinion was issued on August 22, 2008, following a challenge by Yahoo! Inc. (Yahoo!) to directives issued under the Protect America Act of 2007 (PAA). Today, following a renewed declassification review, the Executive Branch is publicly releasing various documents from this litigation, including legal briefs and additional sections of the 2008 FISC-R opinion, with appropriate redactions to protect national security information. These documents are available at the website of the Office of the Director of National Intelligence (ODNI), www.dni.gov; and ODNI’s public website dedicated to fostering greater public visibility into the intelligence activities of the U.S. Government, IContheRecord.tumblr.com. A summary of the underlying litigation follows.

FISC Proceedings

In Re: Directives Pursuant to Section 105B of the Foreign Intelligence Surveillance Act involved a challenge by Yahoo! to directives issued by the Director of National Intelligence (DNI) and the Attorney General under the PAA. The PAA was the predecessor to the Foreign Intelligence Surveillance Act (FISA) Amendments Act of 2008 (FISA Amendments Act of 2008 or FAA). The directives issued to Yahoo! under the PAA required it to assist the U.S. Government in acquiring foreign intelligence information through the surveillance of targets reasonably believed to be located outside the United States. Yahoo! refused to comply with the directives, and the U.S. Government initiated proceedings in the FISC to compel compliance.

Yahoo! opposed the U.S. Government’s motion to compel compliance with the directives primarily on the ground that the directives violated the Fourth Amendment rights of its customers. On April 25, 2008, following extensive briefing by the parties, the FISC held that the directives were lawful and ordered Yahoo! to comply.

• The FISC held that there is a foreign intelligence exception to the warrant requirement, and that the exception applied to surveillance conducted pursuant to the directives, including surveillance targeting U.S. persons located outside the United States.
• The FISC held that the U.S. Government has sufficient procedures in place “to ensure that the Fourth Amendment rights of targeted U.S. persons are adequately protected and that the acquisition of foreign intelligence to be obtained through the directives issued to Yahoo!, as to these individuals, is reasonable under the Fourth Amendment.” It further held, based on prior case law and noting the applicable minimization procedures, that “any incidental acquisition of the communications of non-targeted persons located in the United States and of non-targeted U.S. persons, wherever they may be located, is also reasonable under the Fourth Amendment.”

Yahoo! then appealed to the FISC-R.

FISC-R Proceedings

On August 22, 2008, following briefings and oral argument, the FISC-R issued a classified opinion, affirming the FISC’s decision that the directives were lawful. In its decision, the FISC-R first held that Yahoo! had standing to challenge the directives based on the Fourth Amendment interests of its customers that Yahoo! was alleging. Turning to the merits of the case, the FISC-R rejected Yahoo!’s Fourth Amendment challenge to the directives.

• First, the FISC-R held that a traditional warrant was not required. Basing its opinion on a line of U.S. Supreme Court cases recognizing “special needs” exceptions to the Fourth Amendment’s warrant requirement, the FISC-R held that the U.S. Government’s collection of foreign intelligence information pursuant to the directives addressed a special need that justified an exception to the warrant requirement.

• Second, the FISC-R held that the surveillance at issue met the reasonableness requirement of the Fourth Amendment, in light of the national security interests at issue and the “matrix of safeguards” required by the PAA and implemented by multiple branches of the Government. Those safeguards included:
  • Targeting procedures reviewed by the FISC and designed to ensure that the U.S. Government targets someone only if the Government has a valid foreign intelligence purpose and reasonably believes that person is located outside of the United States.
  • Minimization procedures designed to limit the retention and dissemination of information about U.S. persons.  
  • Procedures that require the Attorney General to find, before the U.S. Government conducts surveillance of any U.S. person located outside the United States, that the targeted U.S. person is a foreign power or an agent of a foreign power. These procedures were not required by the PAA. Rather, the U.S. Government included them as a requirement in the certifications for the surveillance of U.S. persons located outside the United States, consistent with its practice since 1981 under Section 2.5 of Executive Order 12333.

No rehearing or further review in the U.S. Supreme Court was sought.

The FISA Amendments Act

The PAA expired in February 2008 and was ultimately replaced with the FISA Amendments Act of 2008, codified as Title VII of FISA. The FISA Amendments Act incorporates many of the provisions and procedures that the FISC-R found important to its holding that the U.S. Government’s surveillance was constitutional. The FISA Amendments Act also builds in additional safeguards that did not exist in the PAA. For example:

• The FISA Amendments Act goes beyond the PAA and imposed, for the first time, the requirement for a judicial finding that a U.S. person located outside the United States targeted for surveillance or search is a foreign power, agent of a foreign power, or officer or employee of a foreign power. This finding is made by the FISC under the FISA Amendments Act; as noted above, under the PAA and prior to the PAA this finding was made exclusively by the Attorney General.
• The FISA Amendments Act requires FISC approval of the targeting and minimization procedures. Under the PAA, the FISC reviewed only the targeting procedures.

The FISA Amendments Act, by requiring those and other safeguards, is even more protective of the Fourth Amendment rights of U.S. persons than the statute upheld by the FISC-R as constitutional.

A man formerly of Raleigh, North Carolina, and now of Miami, was sentenced today to serve 135 months in prison for tax fraud, healthcare fraud and money laundering crimes in two separate cases in federal court, announced Deputy Assistant Attorney General Ronald A. Cimino of the Justice Department’s Tax Division and U.S. Attorney Ripley Rand for the Middle District of North Carolina. 

Claude Arthur Verbal II was also ordered to serve three years of supervised release following his prison term, to pay restitution of $4,078,584 to the Internal Revenue Service (IRS) and to pay $2,382,378 to the North Carolina Department of Health and Human Services.  On April 9, Verbal pleaded guilty to one count of conspiracy to defraud the United States, one count of aiding and assisting the preparation of false tax returns, one count of healthcare fraud and one count of money laundering. 

“Mr. Verbal’s sentence sends a clear message to those who operate fraudulent tax return businesses,” said Deputy Assistant Attorney General Ronald A. Cimino of the department’s Tax Division.  “The Justice Department will continue to prosecute and seek just punishment against those who prepare fraudulent tax returns.”

The Tax Case

Verbal was the owner of Nothing But Taxes (NBT), a tax return preparation franchise with 10 branches throughout the state of North Carolina that operated from 2005 to at least 2012.  Verbal personally prepared false tax returns for clients of NBT and taught and encouraged his employees to do so as well.  Verbal and NBT employees frequently offered clients a dramatically larger tax refund if the client agreed to make a cash payment to their tax preparer.  These cash payments were over and above the flat return preparation fee that NBT charged every client, whether or not their return was falsified. 

From 2005 to 2007, Verbal personally prepared dozens of false tax returns on a computer at NBT’s location on Fayetteville Street in Durham, North Carolina.  One such return was a 2006 tax return for an NBT client that falsely reported the client had a Schedule C business and a dependent, which Verbal knowingly prepared and electronically filed with the IRS.  

The most common types of falsifications at NBT were false dependents, false Schedule C businesses, false tip income, false Earned Income Tax Credits and false education credits.  Verbal falsified returns using these items and taught his managers and line employees how to do so as well.  Verbal and many of his employees facilitated the purchase and sale of false dependents at NBT by purchasing the names, dates of birth and social security numbers of individuals from the community for use as false dependents on other clients’ tax returns. 

“Mr. Verbal’s fraudulent schemes victimized taxpayers in multiple ways, damaged the Medicaid program and the many patients who rely on it,” said U.S. Attorney Ripley Rand for the Middle District of North Carolina.  “We will continue to work with law enforcement and the victimized agencies to shut down these types of fraud schemes, hold the fraudsters accountable, and return the ill-gotten gains to the programs for which they were intended.”

In November 2010, one of Verbal’s employees informed a U.S. probation officer of the fraudulent practices at NBT’s location on Fayetteville Street.  The probation officer informed Verbal of this fraud and he falsely denied knowledge of it.  Afterward, Verbal took steps to keep the profitable Fayetteville Street location open and to continue operating as usual, but to also further distance himself from the fraudulent practices.  In order to do this, Verbal transferred the electronic filing privileges for that NBT branch to a nominee.  Verbal and others jointly persuaded a relative of Verbal who allowed Verbal to use their name to apply for new electronic filing privileges for the Fayetteville Street location.  In exchange, Verbal and his wife paid the relative $10,000, and the relative had no role in operating NBT, no professional tax experience and no knowledge of the fraud that was occurring at NBT.

Later, in 2012, the IRS shut down electronic filing privileges at all 10 NBT branches due to persistent fraud.  Verbal re-applied for electronic filing privileges twice for all NBT locations, first in the name of the relative and, when that attempt failed, in the name of another relative who had no knowledge of NBT’s business.

The Healthcare Fraud Case

According to court documents, Verbal was the owner and operator of Infinite Wellness Concepts (IWC), a Medicaid behavioral health provider with locations in Burlington, Durham and Greensboro, North Carolina.  IWC was contracted to provide group therapy, intensive in-home services, and enhanced mental health and substance abuse services.  Verbal acquired at least $1 million in fraudulently obtained funds from the Medicaid program.  The fraudulent activities included:  

·          changing diagnosis codes so that codes with higher reimbursement rates could be billed;

·          falsely inflating the number of clients treated during group therapy;

·          billing for services not rendered and submitting false treatment notes in support of the services not rendered using forged signatures from counselors and therapists;

·          unqualified personnel conducting therapy; and

·          creating fraudulent clinical assessments and creating clinical assessments prepared and signed by unqualified preparers. 

Verbal used the proceeds of the tax and healthcare fraud schemes to make extensive purchases of luxury cars, homes and jewelry.  The money laundering charge to which Verbal pleaded guilty relates to the purchase of a $52,000 diamond ring with the proceeds of healthcare fraud.

“It is both despicable and illegal when scammers like Claude Verbal cheat the Medicaid program and its beneficiaries by billing for badly needed services for poor and mentally ill patients – services that were never actually provided or were provided by unqualified staff -- just so that Verbal could build a $700K+ bank account and go on a diamond-encrusted shopping spree with the ill-gotten money,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG), Atlanta Regional Office.  “Verbal’s audacious, greed-fueled fraud cheated both taxpayers and needy patients; now, thanks to our hard working investigators and our law enforcement partners, Verbal will pay dearly for his reprehensible crimes.”

“Today’s sentence is the strongest type of affirmation that criminals such as Mr. Verbal, who commit tax fraud and engage in other criminal activities, will be forced to bear the consequences of their actions,” said Special Agent in Charge Thomas J. Holloman for IRS-Criminal Investigation.  “We, along with our law enforcement partners are committed to working together in bringing individuals such as Mr. Verbal to justice.”  

In the course of the healthcare fraud investigation, law enforcement authorities seized $765,917 from bank accounts controlled by Verbal, a 2011 Toyota Camry and four pieces of diamond jewelry, including a 7-carat diamond ring.  The United States initiated a civil forfeiture action alleging the properties constituted proceeds traceable to the healthcare fraud and on Sept. 19, 2013, U.S. District Judge Catherine C. Eagles entered an order forfeiting the property to the government.

The tax case against Verbal was investigated by agents of IRS - Criminal Investigation and was prosecuted by Assistant U.S. Attorney Frank Chut for the Middle District of North Carolina and Trial Attorney Jonathan Marx of the Tax Division.  The healthcare fraud case against Verbal was investigated by agents of HHS-OIG, the North Carolina State Bureau of Investigations, the North Carolina Department of Justice’s Medicaid Investigations Division and IRS – Criminal Investigation, and was prosecuted by Assistant U.S. Attorney Robert Hamilton for the Middle District of North Carolina.

ZAO Hewlett-Packard A.O. (HP Russia), an international subsidiary of the California technology company Hewlett-Packard Company (HP Co.), pleaded guilty today to felony violations of the Foreign Corrupt Practices Act (FCPA) and was then sentenced for bribing Russian government officials to secure a large technology contract with the Office of the Prosecutor General of the Russian Federation.

Principal Deputy Assistant Attorney General Marshall L. Miller of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.

HP Russia pleaded guilty this morning before U.S. District Judge D. Lowell Jensen of the Northern District of California to conspiracy and substantive violations of the anti-bribery and accounting provisions of the FCPA. According to the plea agreement, HP Russia executives created a multimillion dollar secret slush fund, at least part of which was used to bribe Russian government officials who awarded the company a contract valued at more than € 35 million.  

At the conclusion of the plea proceeding, the court sentenced HP Russia to pay a $58,772,250 fine.

“In a brazen violation of the FCPA, Hewlett Packard’s Russia subsidiary used millions of dollars in bribes from a secret slush fund to secure a lucrative government contract,” said Principal Deputy Assistant Attorney General Miller.  “Even more troubling was that the government contract up for sale was with Russia’s top prosecutor’s office. Tech companies, like all companies, must compete on a level playing field, not resort to secret books and sham transactions to hide millions of dollars in bribes.  The Criminal Division has been at the forefront of this fight because when corruption takes hold overseas, American companies and the rule of law are harmed.  Today’s conviction and sentencing are important steps in our ongoing efforts to hold accountable those who corrupt the international marketplace.”

“Today’s conviction and sentence of HP Russia demonstrates that the United States Attorney’s Office is dedicated to aggressively prosecuting all forms of corporate fraud that touch our district, wherever they may occur,” said U.S. Attorney Haag.  “HP’s cooperation during the investigation is what we expect of major corporate leaders facing the challenges of doing business around the world.”

“For more than a decade HP Russia business executives participated in an elaborate scheme that involved paying bribes to government officials in exchange for large contracts,” said FBI Assistant Director in Charge McCabe. “There is no place for bribery in any business model or corporate culture. Along with the Department of Justice, the IRS and international law enforcement partners, the FBI is committed to investigating corrupt backroom deals that threaten our global commerce.”

“HP Russia thought that they could play by a different set of rules than the rest of the international business community,” said IRS-CI Chief Weber. “Unfortunately, they are not alone. For other companies out there conducting business in this way, let the message be very clear—we will relentlessly follow the money trail. IRS-CI is a trusted leader in the pursuit of corporations and executives who circumvent the law. CI is committed to maintaining fair competition, free of corrupt. practices, through a potent synthesis of global teamwork and our dynamic financial investigative talents.”

According to the statement of facts filed with the plea agreement, HP Russia created excess profit margins to finance the slush fund through an elaborate buy-back deal scheme. HP subsidiaries first sold the computer hardware and other technology products called for under the contract to a Russian channel partner, then bought the same products back from an intermediary at a nearly €8 million mark-up and an additional €4.2 million in purported services, then sold the same products to the Office of the Prosecutor General of the Russian Federation at the increased price. The payments to the intermediary were then largely transferred through multiple layers of shell companies, some of which were directly associated with government officials. Proceeds from the slush fund were spent on travel services, luxury automobiles, expensive jewelry, clothing, furniture and various other items.  

To keep track of and conceal these corrupt payments, the conspirators inside HP Russia kept two sets of books: secret spreadsheets that detailed the categories of bribe recipients, and sanitized versions that hid the bribes from others outside of HP Russia. They also entered into off-the-books side agreements to further mask the bribes. As one example, an HP Russia executive executed a letter agreement to pay €2.8 million in purported “commission” fees to a U.K.-registered shell company, which was linked to a director of the Russian government agency responsible for managing the Office of the Prosecutor General of the Russian Federation project. HP Russia never disclosed the existence of the agreement to internal or external auditors or management outside of HP Russia.  

On April 9, 2014, the government also announced criminal resolutions with HP subsidiaries in Poland and Mexico which violated the FCPA in connection with contracts with Poland’s national police agency and Mexico’s state-owned petroleum company, respectively. Pursuant to a deferred prosecution agreement, the department filed a criminal information charging Hewlett-Packard Polska, Sp. Z o.o. with violating the accounting provisions of the FCPA. Hewlett-Packard Mexico, S. de R.L. de C.V. entered into a non-prosecution agreement with the government pursuant to which it has agreed to forfeit proceeds and has admitted and accepted responsibility for its misconduct. In total, the three HP entities will pay $76,760,224 in criminal penalties and forfeiture.  

In a related FCPA matter, the U.S. Securities and Exchange Commission (SEC) filed a proposed final judgment in April 2014 to which HP Co. consented. Under the terms of the proposed final judgment, HP Co. has paid $31,472,250 in disgorgement, prejudgment interest and civil penalties, bringing the total amount of U.S. criminal and regulatory penalties against HP Co. and its subsidiaries to more than $108 million.   

Court filings acknowledge HP Co.’s extensive cooperation with the department, including conducting a robust internal investigation, voluntarily making U.S. and foreign employees available for interviews, and collecting, analyzing, and organizing voluminous evidence for the department.  Court filings also acknowledge the extensive anti-corruption remedial efforts undertaken by HP Co., including taking appropriate disciplinary action against culpable employees, and enhancing HP Co.’s internal accounting, reporting, and compliance functions.

The case is being investigated by the FBI’s Washington Field Office with assistance from the FBI’s New York Field Office and FBI Legal Attaché offices in Mexico City, Moscow, Berlin and Warsaw, and the IRS-CI’s Oakland Field Office. The case is being prosecuted by Trial Attorneys Ryan Rohlfsen and Jason Linder of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Adam A. Reeves of the Northern District of California. The Criminal Division’s Office of International Affairs also provided significant assistance in this matter.  

The Justice Department expresses its deep appreciation for the significant assistance provided by the SEC’s Division of Enforcement, the Polish Anti-Corruption Bureau, the Polish Appellate Prosecutor’s Office, the Public Prosecutor’s Office in Dresden, Germany, and our law enforcement partners in Mexico, the United Kingdom, Lithuania, Latvia, Italy, Spain and Hungary.    

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

The former head of a Virginia-based defense contracting company was sentenced today to serve 18 months in prison for failing to collect and pay more than $2.2 million in employee payroll taxes and engaging in theft of more than $186,000 from an employee pension plan.

Deputy Assistant Attorney General Ronald Cimino for the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, Special Agent in Charge Thomas J. Kelly for the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington, D.C., Field Office and Assistant Secretary Phyllis C. Borzi of the U.S. Department of Labor-Employee Benefits Security Administration made the announcement after sentencing.

William P. Danielczyk Jr., 53, formerly of Oakton, Virginia, was additionally ordered to serve three years of supervised release after his prison sentence and to pay more than $1.6 million in restitution to the IRS.  U.S. District Judge James C. Cacheris delivered the sentence and it will be served consecutively to the 28 months in prison the defendant is already serving for committing campaign finance violations during the 2008 presidential primary and a 2006 U.S. Senate campaign.

Danielczyk pleaded guilty on June 10.  According to court documents, from March 2009 until December 2011, Danielczyk was the executive chairman of Innolog Holdings Corporation, which acquired Innovative Logistics Technology Inc. in March 2009.  Innovative operated in the government services industry and provided technology-supported logistics services to the U.S. military and various defense organizations.  The principal offices for Innovative and Innolog were located in McLean, and later in Fairfax, Virginia.

From mid-2009 through the end of 2011, Danielczyk was responsible for collecting, accounting for and paying appropriate payroll tax amounts to the IRS.  Although payroll taxes were withheld from the wages of Innovative’s employees, Danielczyk failed to pay both the employee withholdings amounts and the employer’s matching portions to the IRS.  The total tax loss during this time period was $2,232,781.

According to court documents, Innovative’s employees were allowed to contribute money from their bi-weekly paychecks to a qualified pension plan that was administered by an asset custodian (initially Prudential Bank & Trust and later Fidelity Investments).  Under the 401(k) plan, Innovative withheld its employees’ elected contribution amounts from their regular paychecks, and the employee withholdings were to be sent to Prudential or Fidelity.  Danielczyk, however, was the person responsible for authorizing payments to the asset custodian, and he failed to send these payments over the course of three years.  From 2009 through 2011, this conduct led to a total loss of  $186,263.

According to court records, instead of paying Innovative’s employment taxes and pension plan contributions, Danielczyk made a variety of purchases from company accounts.  Those purchases included $505,871 for the use of an executive suite in the FedEx Field football stadium in Landover, Maryland, along with $40,000 to sponsor the Virginia Gold Cup, a series of Steeple Chase horse races held in northern Virginia.

Danielczyk was sentenced in Alexandria, Virginia, federal court on May 31, 2013, to serve 28 months in prison for engaging in a campaign finance scheme in which he conspired to illegally reimburse more than $186,000 in contributions to the senate and presidential campaign committees of a candidate for federal office, engaged in obstruction of justice, and caused the candidate’s campaign committee to unwittingly file Federal Election Commission reports that contained false information.  Court records show that Danielczyk continued to fail to pay Innovative’s employee taxes and pension plan contributions even after he was indicted in the campaign finance case in February 2011.

The tax and pension fraud case was investigated by IRS-CI and the U.S. Department of Labor-Employee Benefits Security Administration’s Philadelphia Regional Office.  Assistant U.S. Attorney Mark D. Lytle for the Eastern District of Virginia and Trial Attorney Tracy L. Gostyla of the Tax Division prosecuted the case.  Additional information about the Tax Division and its enforcement efforts may be found at the division website.

An East Side Bloods (ESB) gang member from Scottsdale, Arizona, was sentenced late yesterday to serve 30 years in prison for his role in the violent street gang, which operated on the Salt River Pima-Maricopa Indian Community reservation.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney John S. Leonardo of the District of Arizona made the announcement after the sentence was imposed by U.S. District Court Judge David G. Campbell of the District of Arizona.

Denicio Elrayno Francisco, 28, a long-time member of East Side Bloods, was convicted by a jury on Oct. 31, 2013, of conspiracy to participate in a pattern of racketeering activity, attempted murder in aid of racketeering and use of a firearm in furtherance of a crime of violence.  

According to evidence presented at trial, from August 2004 through January 2013, the ESB was a criminal street gang, which perpetuated itself and enriched its members through activities such as murder, robbery, aggravated assault, fraudulent “straw” purchases of firearms and the distribution of drugs, including marijuana and cocaine. The gang preserved and protected its power on the reservation and adjoining communities through the use of intimidation, violence, assault, drive-by shootings and murder. The gang also retaliated with violence and threats of violence against victims who contacted law enforcement to report the gang-related crimes.

Evidence at trial demonstrated that Francisco arranged a meeting with a member of the Salt River Pima-Maricopa Indian Community, ostensibly to discuss some gang-related conflicts on the reservation. On Nov. 23, 2012, Francisco arrived at the meeting with two other armed ESB members wearing gang colors. He stepped out of his car, yelled a gang slogan and opened fire with an AK-47 assault rifle toward the intended victim. Those present with the intended victim included a five-month-old baby, the wheelchair-bound homeowner, and seven other adults. The intended victim was struck by a bullet in the left forearm, resulting in permanent injury. Testimony at trial also showed that Francisco committed the attempted murder to maintain his position and increase his status within the ESB.

In addition to the prison term imposed, Francisco was also sentenced to serve five years of supervised release.

The defendant’s brother, Martinez Francisco Jr., 31, was also convicted at the same trial and was sentenced on Feb. 10, 2014, to serve 30 years in prison for participating in a racketeering conspiracy and illegal firearms trafficking. Eight additional gang members who entered guilty pleas in the case were previously sentenced to terms ranging from 27 to 156 months in federal prison.

The case was investigated by the Arizona Department of Public Safety’s Gang and Immigration Intelligence Team Enforcement Mission (GIITEM), the Mesa Police Department, the Salt River Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Substantial assistance was provided by the FBI, Scottsdale Police Department and Tempe Police Department.

The case was prosecuted by Hans Miller of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Keith E. Vercauteren of the District of Arizona.

A former LaPorte County deputy auditor has been indicted by a federal grand jury in the Northern District of Indiana for embezzling over $150,000 from the LaPorte County government and committing tax fraud.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana made the announcement.

The indictment returned on Sept. 10, 2014, charges Mary Ray, 66, of La Porte, Indiana, with two counts each of theft of government monies and of making false statements on a tax return.

According to the indictment, from September 2011 through December 2012 and while she was working as an auditor, Ray embezzled more than $5,000 from LaPorte County, which had received more than $10,000 in federal benefits in both 2011 and 2012.

The indictment also alleges that Ray underreported her income on her U.S. Individual Tax Returns in 2011 and 2012 by failing to report the embezzled funds.

 
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty.

This case was investigated by the FBI and IRS-Criminal Investigation, with assistance from the Indiana State Police, the LaPorte County Sheriff’s Department and the Indiana State Board of Accounts. The case is being prosecuted by Trial Attorney Peter Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Donald J. Schmid of the Northern District of Indiana.

The former chief technology officer 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 designing and maintaining the technological infrastructure for Liberty Reserve.

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

Mark Marmilev, 35, of Brooklyn, New York, pleaded guilty today before U.S. District Judge Denise L. Cote to conspiring to operate an illegal unlicensed money transmitting business that he knew involved the transmission of funds derived from criminal activity. Sentencing is scheduled for Dec. 12, 2014.

“Marmilev designed and maintained a massive criminal infrastructure in cyberspace for one of the world’s most widely used digital currency systems, which laundered billions in criminal proceeds,” said Assistant Attorney General Caldwell. “This is the third conviction in the largest international money laundering case ever brought by the department, and we will continue to ensure that virtual currencies are not misused to facilitate criminals hiding from the U.S. justice system.”

“As the chief technology officer of Liberty Reserve, Mark Marmilev was responsible for the infrastructure of a global payment processor and money transfer system that catered largely to criminals,” said U.S. Attorney Bharara. “With his guilty plea today, we are one step closer to holding to account everyone integrally involved in this sprawling Internet enterprise that served as a central financial institution for cyber criminals and illegal transactions of numerous kinds.”

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. Marmilev was an associate of Liberty Reserve founder Arthur Budovsky and served as Liberty Reserve’s chief technology officer. In that role, Marmilev was principally responsible for designing and maintaining Liberty Reserve’s technological infrastructure.

Marmilev and Budovsky were among seven individuals charged in the indictment, which was unsealed on May 28, 2013, and two co-defendants – 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.

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 charges contained in the indictment against certain of Marvilev’s co-defendants remain pending and are merely accusations. Those defendants are presumed innocent unless and until proven guilty.

A 26-year-old man from Newport News, Virginia, was sentenced today to serve 255 months in prison, followed by five years of supervised release, for engaging in numerous gang-related crimes as a member of the Black P-Stones, including the shooting of a rival gang member, marijuana dealing and lying to a federal grand jury.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office made the announcement after sentence was imposed by U.S. District Judge Arenda Wright Allen.

According to a statement of facts filed with his plea agreement, Enrique Omar Hinton, aka “Rico,” admitted that he was a “foot soldier” in a violent street gang called the Black P-Stones, also referred to as the P-Stone Bloods and Cobra Stones. The Black P-Stones operated primarily in the Beechmont, Courthouse Green, and Woodview neighborhoods in the Denbigh area of Newport News, and its members engaged in various criminal activities including murders, robberies, drug trafficking, and obstruction of justice.

According to the statement of facts, Hinton joined the gang in 2005, and as a foot soldier, he sold marijuana for the gang, carried firearms, attended gang meetings and planned and participated in the gang’s criminal activities. Additionally, on Dec. 10, 2008, Hinton and others retaliated against a rival gang member who exhibited disrespect toward the girlfriend of a Black P-Stones member. Approximately seven to eight bullets were fired at the rival gang member’s home, with bullets entering the living room and front door while two people were inside.

Hinton also admitted that on July 13, 2009, he testified falsely before a federal grand jury to obstruct the investigation of the Black P-Stones and the Dec. 10, 2008, shooting.

 
Hinton was charged in a superseding indictment on Dec. 9, 2013, and pleaded guilty on Mar. 28, 2014, to one count of racketeering conspiracy and one count of discharging a firearm in furtherance of a crime of violence.

The investigation was led by the FBI’s Safe Streets Peninsula Task Force, with the assistance of the Newport News Police Department, James City County Police Department and the Virginia State Police. This case is being prosecuted by Trial Attorney Marianne Shelvey of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Eric M. Hurt of the Eastern District of Virginia .

Attorney General Eric Holder released the following statement Thursday announcing Joyce Branda as Acting Assistant Attorney General for the Civil Division:

“I am pleased that Joyce Branda, a dedicated public servant whom I’ve known for years, will serve as Acting Assistant Attorney General for the Civil Division.

“Joyce's nearly 35 years of service to the American people has been defined by her unwavering commitment to public service and distinguished by her dogged pursuit of financial and health care fraud. She has helped protect and advance the public interest by recovering billions of taxpayer dollars and holding accountable those who have defrauded the treasury.

"Over the last three years, Joyce has led the Civil Division's Commercial Litigation Branch to some of the largest settlements in its history – a track record of exemplary enforcement that I'm certain she will build upon in her new role.

"And, as Stuart Delery moves into his new role as Acting Associate Attorney General, I am confident that Joyce will lead the Civil Division with the same professionalism and exceptional skill that have been her hallmark."

Jeremy Heath Higgins, 28, a resident of Quinton, Alabama, pleaded guilty today before U.S. District Judge Madeline Haikala to two counts of federal civil rights violations, announced the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Northern District of Alabama.

As part of the plea proceedings, Higgins admitted that on June 14, 2013, he approached and threatened an African-American man at the Alabama Rose Steakhouse, a restaurant in Quinton, Alabama, because the man was present at the restaurant with a white woman. Soon after, the couple left the bar. A manager at the Alabama Rose Steakhouse confronted Higgins because of his behavior toward the African-American man and ordered Higgins to leave the restaurant. As Higgins was being escorted from the bar, he used racial slurs, shouted a racial slur at the restaurant manager, and threatened to burn down the Alabama Rose Steakhouse. Later that evening, Higgins returned to the restaurant and threatened the restaurant manager by painting graffiti on the restaurant’s front exterior and fence.

Sentencing in this case is set for January 9, 2015.

“Threatening an individual over their race or a business for its acceptance of others has no place in a civilized society,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “The Department of Justice will vigorously prosecute those who seek to intimidate others with these types of hateful threats.”

“Access to public places, like restaurants, has been at the core of the civil rights struggle,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama. “Unlike the lunch counters of the 1960s, the restaurant in this case welcomed and sought to protect the rights of its African American customer. In prosecuting this case, we make clear our commitment to enforcing the civil rights of individuals and the businesses who seek to serve all, without regard to the color of their skin.”

This case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Robin B. Mark of the Northern District of Alabama and Trial Attorney David Reese of the Justice Department’s Civil Rights Division.

SUMMARY - The Executive Office for Immigration Review (EOIR) invites interested parties to participate in a teleconference and Webinar providing a general overview of EOIR's recognition and accreditation program. This event is intended to educate interested parties about the process for obtaining recognition for an organization and accreditation for individuals.

DATE: Friday, September 26, 2014, at 2 p.m.

RSVP: To RSVP for the meeting, please contact Lauren Alder Reid, Counsel for Legislative and Public Affairs, 703-305-0289, PAO.EOIR@usdoj.gov, by noon on Wednesday, September 24, 2014. Please note that there will be no in-person attendance for this event. EOIR will send call-in and Web access information on Wednesday, September 24th, to those who RSVP. To attend the meeting via conference call and Web, please RSVP with the name(s) of the attendee(s), the attendee's organization, and an email address where instructions may be sent for accessing the conference call and Web meeting.

- EOIR -

The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.

The United States has requested that the U.S. District Court for the Northern District of Mississippi permanently bar a Greenville, Mississippi, man from preparing federal income tax returns for others, the Justice Department announced today.

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

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 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. Nathaniel Kimble, etc. et al
Complaint

FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced that, effective September 29, 2014, it will assign immigration cases originating at the Artesia, N.M., hearing location to immigration judges at the Denver Immigration Court in Denver rather than immigration judges at the Headquarters Immigration Court in Arlington, Va.

As the Headquarters Immigration Court immigration judges do, the Denver immigration judges assigned to Artesia cases will hear those cases via video-teleconference (VTC). Denver immigration judges will hear all Artesia removal cases except those few in which a Headquarters immigration judge has already begun to hear evidence on contested issues. Denver immigration judges will also conduct credible fear reviews in cases that the Department of Homeland Security referred to EOIR on or after September 29, 2014. Credible fear reviews referred before September 29, 2014, and all cases in which a Headquarters immigration judge has begun to hear evidence on contested issues will remain before the Headquarters immigration judge. All parties will receive appropriate notice prior to their hearings. Please note that filings for Artesia cases should be submitted to the Denver immigration court location unless the Headquarters immigration judge retains the case.

With this realignment, most cases originating in Artesia will be heard by judges sitting in the same time zone and Federal judicial circuit as the respondents.

- EOIR -

The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.

Shannon Conley, age 19, of Arvada, Colorado, pleaded guilty this morning before U.S. District Court Judge Raymond P. Moore to one count of conspiracy to provide material support to a designated foreign terrorist organization, U.S. Attorney John Walsh for the District of Colorado and Special Agent in Charge Thomas Ravenelle of the FBI Denver Division announced. Conley is scheduled to be sentenced by Judge Moore on January 23, 2015. The defendant appeared at the change of plea hearing in custody, and was remanded at its conclusion.

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

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

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

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

Conley faces up to five years in federal prison and a fine up to $250,000 for conspiracy to provide material support to a designated foreign terrorist organization.

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

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

Related Materials:

Shannon Conley Plea Agreement

A Spanish Fork, Utah, man was sentenced today to serve 33 months in prison for filing false claims for income tax refunds, the Justice Department and Internal Revenue Service (IRS) announced. 

U.S. District Judge Dee Benson also ordered Stanley J. Wardle to pay $29,527 in restitution to the IRS and to serve three years of supervised released upon his release from prison. 

On Dec. 9, 2013, immediately before his trial was to begin, Wardle pleaded guilty to nine counts of filing false claims for a tax refund.  According to the indictment, in January 2009, Wardle filed a false individual income tax return which sought a refund of $32,115.  Additionally, between December 2008 and May 2009, Wardle prepared eight false tax returns on behalf of others, seeking more than $600,000 in refunds.

This case was investigated by the IRS-Criminal Investigation and prosecuted by Trial Attorneys Michael Romano and Stuart Wexler of the Tax Division. 

The following statement is attributable to Justice Department spokesman Brian Fallon regarding Attorney General Eric Holder’s visit to Mexico City today to meet with his fellow attorneys general from across Central America to discuss the situation involving migrant children:

“Attorney General Holder attended a joint meeting in Mexico City today with his counterparts from Mexico, El Salvador, Guatemala and Honduras. The group discussed ways to improve public safety across Central America in order to address the underlying factors that have contributed to the flow of unaccompanied minors across the Southwest border of the United States. Specifically, the group considered strategies about how to best confront the smugglers of these unaccompanied children, the violent gangs who victimize them in their home countries, and the cartels who tax or exploit them in their passage.

“Going forward, the Attorneys General agreed to create a high-level working group with representatives of each Attorney General's office in order to develop an integrated strategy to deal efficiently with this issue. The working group will hold its first meeting within the coming weeks to develop a coordinated plan of action that will be presented at a subsequent meeting of the attorneys general.”

John P. Carlin, Assistant Attorney General for National Security and Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, announced today that U.S. District Judge Marcia Cooke re-sentenced Jose Padilla to serve 21 years in prison for his 2007 conviction for conspiracy to murder, kidnap and maim individuals in a foreign country; conspiracy to provide material support to terrorists; and providing material support to terrorists.

The U.S. Eleventh Circuit Court of Appeals had remanded the case after upholding the convictions but vacating the original sentence of 17 and-a-half years as too lenient. Padilla faced a sentence under the U.S. Sentencing Guidelines of 360 months to life in prison.

U.S. Attorney Ferrer commended the investigative efforts of the Federal Bureau of Investigation, with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations section. The re-sentencing of this case was handled by Assistant U.S. Attorneys Brian Frazier and Ricardo Del Toro of the Southern District of Florida and Department of Justice National Security Division Trial Attorney Bridget Behling.”

A former senior vice president and chief credit officer of TierOne Bank, a publicly traded commercial bank formerly headquartered in Lincoln, Nebraska, pleaded guilty today for his role in a scheme to defraud TierOne’s shareholders and regulators.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Deborah R. Gilg of the District of Nebraska, Special Agent in Charge Thomas R. Metz of the FBI’s Omaha Division and Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Romero made the announcement.    

“When the real estate market crashed, Don Langford, the chief credit officer and a senior vice president of TierOne Bank, worked with others to cook the bank’s books and cover up mounting losses,” said Assistant Attorney General Caldwell.  “This conviction is another example of the Criminal Division’s pursuit of corporate executives who commit fraud, no matter what their title or stature.”

“The vast investigation led by the Omaha FBI Division, in conjunction with SIGTARP, ascertained and exposed a criminal enterprise maneuvering complex fraudulent transactions,” said FBI Special Agent in Charge Metz.  “This case reflects the FBI’s nonstop commitment to protect our communities by aggressively investigating and bringing to justice individuals exploiting their influence or position for personal gain.”

“Langford, former TierOne senior executive and chief credit officer, conspired with others to hide losses at the bank by cooking the bank’s books and reporting falsified information to stakeholders, regulators, external auditors, and the investing public,” said SIGTARP Romero. “Langford and others engaged in fraud in order to keep regulators at bay and from closing the bank, to maintain and increase the bank’s stock price, and to enrich themselves.  The bank even made an unsuccessful attempt to get taxpayer TARP funds in November 2008.  SIGTARP and our law enforcement officers will bring to justice perpetrators of fraud related to TARP and hold them accountable for their crimes.”

According to a criminal information filed with his plea agreement, from at least 2009 to April 2010, Don A. Langford, 63, of Gibsonia, Pennsylvania, and others falsely inflated the value of TierOne’s loan and real estate portfolio in its required reports to the U.S. Securities and Exchange Commission (SEC) and the Office of Thrift Supervision (OTS). In January 2009, TierOne had executed a supervisory agreement with OTS that required TierOne to report information about its performance and financial condition and to maintain a minimum capital position in relation to its loan portfolio and other assets. Langford and others intentionally used outdated appraisals on properties, and rejected new appraisals that would have adversely impacted TierOne’s reportable assets, revenue and earnings. In addition, Langford and others delayed seeking new appraisals to conceal the current value of collateral and restructured loan terms to disguise the borrower’s inability to make timely interest and principal payments. As a result, Langford and others were able to hide millions of dollars in losses from regulators and investors.

In 2008, TierOne submitted an application to the OTS seeking Troubled Asset Relief Program (TARP) funding. Ultimately, TierOne withdrew its application and did not receive TARP funds. TierOne filed for bankruptcy shortly after the bank was shut down by OTS in June 2010.

Langford pleaded guilty before U.S. Magistrate Judge Cheryl R. Zwart of the District of Nebraska to conspiring to commit securities fraud, wire fraud and making false entries in a bank’s books and records, as well as one count of making false statements. Sentencing is scheduled for Dec. 5, 2014.

The case was investigated by the FBI’s Omaha Division and by SIGTARP. The department recognizes the substantial assistance of the SEC.  

The case is being prosecuted by Trial Attorneys Henry P. Van Dyck and L. Rush Atkinson and Senior Litigation Counsel David A. Bybee of the Criminal Division’s Fraud Section.  

J. Keith McCray, previously a criminal investigator with the Macon County, Alabama, Sheriff’s Office, was sentenced today by Judge Myron H. Thompson to serve 36 months in prison and two years of supervised release for assaulting a handcuffed man at the county jail, announced the Justice Department and the U.S. Attorney’s Office for the Middle District of Alabama.

On April 4, 2014, McCray pleaded guilty to one felony count of deprivation of rights under color of law. At the plea hearing, McCray admitted that he arrested a salesman who was selling alarm systems in McCray’s neighborhood and transported him to the Macon County Jail. There, McCray struck the victim four times in the face and head while the victim was handcuffed and posed no threat.

“In attacking a defenseless innocent civilian, this officer chose to abuse his power rather than uphold his oath to protect the public,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “ The Justice Department will continue to vigorously prosecute those who cross the line to engage in acts of criminal misconduct.”  

“While we look to law enforcement to maintain the safety and security of our citizens, their position of authority does not give them the right to act outside the bounds of the law,” said U.S. Attorney George L. Beck, Jr. for the Middle District of Alabama. “Most members of law enforcement serve honorably and professionally. McCray breached his pledge to protect and serve and he must be held responsible for his actions. Failure to do so would discredit the noble service of every other officer, and weaken the public’s trust in those who are sworn to protect them.”  

This case was investigated by the FBI and the Alabama Bureau of Investigation. The case was being prosecuted by Assistant U.S. Attorneys Jerusha T. Adams and Jonathan Ross of the Middle District of Alabama and Trial Attorney Chiraag Bains of the Civil Rights Division.

The United States has filed two complaints under the False Claims Act against Michigan neurosurgeon Dr. Aria Sabit, spinal implant company Reliance Medical Systems, two Reliance distributorships—Apex Medical Technologies and Kronos Spinal Technologies—and the companies’ owners,  Brett Berry, John Hoffman and Adam Pike, the Justice Department announced today.  The complaints allege that Apex Medical and Kronos Spinal paid physicians, including Sabit, to induce them to use Reliance spinal implants in the surgeries they performed.

“Improper payments to physicians can alter a physician’s judgment about patients’ true health care needs and drive up health care costs for everyone,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “The Justice Department is committed to enforcing the laws that prohibit such payments.”

Berry and Pike founded Reliance in 2006, and subsequently created more than 12 physician-owned distributorships that sold Reliance devices.  Each of Reliance’s distributorships sold spinal implants ordered by their physician-owners for use in procedures the physician-owners performed on their own patients.  The complaints allege that Reliance used one of its distributorships, Apex Medical, to funnel improper payments to Sabit for using Reliance spinal implants in his surgeries.  According to the complaints, Sabit began using Reliance implants on his patients only after he acquired an ownership interest in Apex and started receiving payments from the sale of Reliance’s spinal implants.  Apex allegedly paid Sabit $438,570 between May 2010 and July 2012, during which time Sabit used Reliance implants in approximately 90 percent of his spinal fusion surgeries.  The government also alleges that these payments caused Sabit to perform medically unnecessary or excessive surgeries on certain patients who did not need the spinal implants. 

The government further alleges that Reliance operated a second distributor, Kronos, in southern California, which made improper payments to two other physicians, Drs. Ali Mesiwala and Gowriharan Thaiyananthan.  Allegedly, Reliance’s owners were recorded telling a potential Kronos investor that Reliance was formed as part of a plan to “get around” the federal Anti-Kickback Statute, which prohibits such improper payments, and that Reliance pays its physician-investors enough in the first month or two to “put their kids through college.”

The allegations that Sabit performed medically unnecessary or excessive surgeries were raised in a separate lawsuit filed by Dr. Cary Savitch and Dr. Gary Proffett under the qui tam, or whistleblower, provisions of the False Claims Act.  The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.  The act also permits the government to intervene in the whistleblowers’ lawsuit.  In this case, the government has both intervened in the whistleblowers’ medical necessity claims and filed a separate lawsuit containing kickback claims against both Sabit and the Reliance defendants.

These lawsuits illustrate 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.

This investigation was a coordinated effort among the Commercial Litigation Branch of the department’s Civil Division and the U.S. Department of Health and Human Services-Office of the Inspector General.  The lawsuits were filed in the Central District of California (Los Angeles), and are captioned United States ex rel. Carey Savitch, M.D., and Gary Proffett, M.D. v. Aria Sabit, M.D., Moustapha Abou-Samra, M.D., and Community Memorial Health System, Case No. 13-3363, and United States v. Reliance Medical Systems, Apex Medical Technologies, Kronos Spinal Technologies, Bret Berry, John Hoffman, Adam Pike, and Aria Sabit, M.D.

The claims asserted by the government are allegations only, and there has been no determination of liability. 

The owner and operator of a Miami home health care company was sentenced to 75 months in prison today for her participation in a $6.5 million Medicare fraud scheme involving the now defunct home health care company, Nestor’s Health Services Inc. (Nestor Home Health).

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and 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 Robert N. Scola Jr. of the Southern District of Florida imposed the sentence.

Cruz Sonia Collado,64, of Homestead, Florida, was an owner and operator of Nestor Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. On June 23, 2014, Collado pleaded guilty to one count of conspiracy to offer and pay health care kickbacks and to defraud the United States, and one count of offering and paying health care kickbacks. In addition to her prison term, Collado was sentenced to serve three years of supervised release and ordered to pay $6,536,657 in restitution.  

According to court documents, Collado paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Nestor Home Health for home health care and therapy services that were medically unnecessary and, in many instances, not provided. Collado then fraudulently billed the Medicare program for home health care services on behalf of the recruited patients.  

From March 2009 through at least January 2014, Nestor Home Health submitted more than $6.5 million in false claims for home health services.  Medicare paid Nestor Home Health more than $6.1 million for these fraudulent claims.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, 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 Anne P. McNamara and A. Brendan Stewart 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

John Francis Mills, 64, the owner of more than a dozen properties in Malone, New York, and Terrance Allen, 57, the maintenance manager of Mills’ properties, were sentenced today by U.S. District Judge Thomas J. McAvoy to serve 21 months each in prison for conspiring to violate the Clean Air Act standards for the safe removal of asbestos during renovations of three of Mills’ properties, for releasing asbestos into the environment and failing to notify the authorities, all in violation of the Clean Air Act’s asbestos work practice standards, and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

Mills’ and Allen’s prison sentences will be followed by two years of supervised release.  In addition, Mills must also pay a $25,000 fine and a $300 crime victim special assessment fee.

On Jan. 21, 2014, Mills and Allen, both of Malone, New York, pleaded guilty to one count of conspiracy to violate CERCLA.  Mills also pleaded guilty to two counts of knowingly violating CERCLA for failing to immediately report the release of more than a pound of asbestos from properties owned by Mills.  In addition to the conspiracy, Allen pleaded guilty to one count of knowingly violating CERCLA.  Mills owned the buildings from which more than 260 linear feet of pipe wrap containing asbestos had been removed by one of Mills’ employees.  Mills and Allen directed that employee to remove the asbestos pipe wrap from 458 East Main Street, 144 Elm Street, and 100 Elm Street, all properties owned by Mills, and managed by Allen, who oversaw the asbestos removal work.   

As part of the plea, Mills and Allen admitted that that they knowingly failed to report to the National Response Center the release of asbestos, in the form of thermal system insulation, or “pipe wrap,” that had been removed from the basement of buildings owned and operated by John Mills, as soon as they knew of the release.  They also admitted to illegally removing and disposing of more than 260 linear feet of pipe wrap containing asbestos.  Mills and Allen directed an employee to remove the pipe wrap containing asbestos without warning him or giving him adequate personal protective equipment.  They transported and caused others to transport that pipe wrap, which was in open bags, in the open bed of a pickup truck.  They further admitted that they conspired together to violate CERCLA.  The asbestos pipe wrap was deposited by the defendants in a UHaul-style box truck owned by Mills and a shed maintained by the Malone Department of Public Works in an effort to conceal the material from authorities.

The Clean Air Act requires that owners of public buildings that contain asbestos follow federally established work practice standards to ensure the safe removal of the asbestos.  The required standards include providing notice to the U.S. Environmental Protection Agency (EPA) before starting asbestos removal, adequately wetting the asbestos during the removal and before disposal, and properly disposing of the asbestos at an EPA-approved disposal site.

The investigation was conducted by the Environmental Protection Agency Criminal Investigation Division and the New York State Department of Labor Asbestos Control Bureau with assistance from the New York State Department of Environmental Conservation, the Malone Police Department and the Malone Department of Public Works.  The case was prosecuted by Trial Attorneys Lana N. Pettus and Gary N. Donner, paralegal Puja Moozhikkattu and litigation support specialist Elga Ozols of the Environmental Crimes Section of the U.S. Department of Justice’s Environment and Natural Resources Division.

Earlier today, Associate Attorney General Tony West, Assistant Attorney General Stuart F. Delery for the Civil Division and members of the Department’s Elder Justice Initiative met with stakeholders in the field of elder abuse and financial exploitation to launch the Elder Justice website in an effort to further prevent and combat elder abuse and financial exploitation.

Associate Attorney General West and Assistant Attorney General Delery delivered remarks at the outreach event to federal, state and local law enforcement, as well as to other partners who combat elder abuse.  The remarks focused on the significant contributions that the Elder Justice website can make to the field and on the Department’s commitment to protecting seniors from abuse and exploitation.  The Elder Justice website will serve as a resource for elder abuse prosecutors, researchers and practitioners, and most importantly, for victims of elder abuse and their families.  This website will also serve as a forum for law enforcement and elder justice policy communities to share information and enhance public awareness about elder abuse.

“The launch of the Elder Justice website today marks another milestone in reaching our shared goal of keeping older Americans safe from abuse and neglect,” said Associate Attorney General West.  “The more we embrace our elders with respect and care, the stronger our society will be.  This tool helps move us closer to that goal.”

Protecting older Americans is one of the Department's top priorities, as evidence shows that nearly one in 10 people over the age of 60 suffer abuse and neglect.  Elder abuse includes physical, sexual and emotional abuse, neglect and financial exploitation.  Elder abuse depletes the resources of individuals, families, businesses and public programs, including Medicare and Medicaid, by billions of dollars each year, which in turn places enormous burdens on our health care, financial and judicial systems.

Older Americans are also targeted by consumer scams, health care fraud and financial exploitation, and protecting this group from financial exploitation is also a priority of the department.  It is estimated that older adults in the United States lose more than $2.9 billion annually from financial exploitation.  Financial loss may result in loss of independence, decreased health and psychological distress, all of which culminate in a diminished quality of life for older adults.  Over the years, the department has successfully prosecuted a number of criminals who targeted the elderly through reverse mortgage fraud scams and lottery scams.  In addition, the department's healthcare fraud enforcement and prevention and consumer protection efforts protect older Americans from financial exploitation.   

“The website provides resources and a means for improved communication among prosecutors, supports victims and families, and establishes a mechanism for collaboration for researchers and practitioners,” said Assistant Attorney General Delery.  “ While there are many other victim support websites available, we believed that the department could add significant value in this domain by consolidating information nationwide and making it more user-friendly.  The Civil Division will continue to strengthen its efforts to protect the elderly.”

Partners in attendance included the Federal Trade Commission; the American Bar Association; the U.S. Department of Health and Human Services-Office of the Inspector General; the National Association for Medicaid Fraud Control Units; the Office of the U.S. Attorney General for the District of Columbia; the Consumer Financial Protection Bureau; and the Social Security Administration.

The Department of Justice announced today that it has entered into a settlement agreement with the School District of Philadelphia that resolves a religious accommodations lawsuit filed in March 2014.  In its lawsuit, the United States alleged that the school district violated Title VII of the Civil Rights Act of 1964 (Title VII) by failing to accommodate the religious beliefs, observances and/or practices of Siddiq Abu-Bakr, a school police officer who is Muslim, and similarly-situated employees who maintain a beard longer than one-quarter inch for religious purposes.

The department’s complaint, filed in the U.S. District Court for the Eastern District of Pennsylvania, alleged that in October 2010 the school district implemented a new grooming policy that strictly prohibits school police officers from having a beard longer than one-quarter inch.  Abu-Bakr, a 27-year employee of the school district, maintains a beard longer than one-quarter inch in adherence to his Islamic faith.  Consistent with his religious beliefs, Abu-Bakr has maintained a beard longer than one-quarter inch the entire time that he has worked for the school district, with no indication that the beard diminished his performance. 

According to the United States’ complaint, when Abu-Bakr requested an accommodation to the grooming policy, the school district disciplined him for violating the policy and denied his religious accommodation request.  The complaint also alleged that the school district maintains a discriminatory policy under which it routinely denies all accommodation requests to the grooming policy involving beard length.  Abu-Bakr, who is individually represented by the Stanford Law School Religious Liberty Clinic, filed a complaint in intervention, asserting claims similar to those of the United States.  Abu-Bakr dismissed his complaint in intervention after he and the school district entered a private settlement agreement.     

Under the terms of the United States’ settlement agreement, the school district has agreed to develop and distribute a revised school police officer proper attire & appearance policy, which will include a procedure by which school police officers can request a religious accommodation.  The school district agreed to notify current and prospective school police officers that their religious accommodation requests will be considered on an individualized basis and that the school district will engage in an interactive process with the school police officers before denying any religious accommodation requests under the revised school police officer proper attire & appearance policy.  In addition, the school district has agreed to provide mandatory training on religious accommodation to all supervisors, managers, human resources officials and other individuals who may receive inquiries from school police officers regarding the revised school police officer proper attire & appearance policy.  The school district also will pay compensatory damages to two similarly-situated employees and will expunge all discipline related to the policy from their personnel files.

“We are pleased that the school district of Philadelphia has agreed to develop a revised  policy that will allow school police officers to request religious accommodations without posing an undue hardship on the school district,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division.  “Through our partnership with the EEOC, the Civil Rights Division continues the commitment of the United States Department of Justice to vigorous enforcement of the nation’s employment discrimination laws.”    

“This settlement agreement demonstrates once again that the close working relationship between the EEOC and the Department of Justice allows us to use public resources most efficiently to enforce our civil rights laws,” said U.S. Equal Employment Opportunity Commission (EEOC) District Director Spencer H. Lewis Jr.  “This settlement agreement contains significant equitable policy changes that will enable school district police officers to request and receive religious accommodations absent an undue hardship.”    

This case was litigated by Senior Trial Attorney Raheemah Abdulaleem and Trial Attorney Catherine Sellers of the Civil Rights Division’s Employment Litigation Section.

More information about Title VII and other federal employment laws is available at this website .  The continued enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division.  Additional information about the Civil Rights Division of the Department of Justice is available on its website at www.usdoj.gov/crt.

Related Materials:

US v. School District of Philadelphia Settlement Agreement

The Justice Department today filed a lawsuit against the Kent State University, the Kent State University Board of Trustees and university officials for violating the Fair Housing Act by discriminating against students with disabilities in student housing.

The lawsuit, filed in the U.S. District Court for the Northern District of Ohio, charges that Kent State and its employees engaged in a pattern or practice of violating the Fair Housing Act by refusing to consider reasonable accommodation requests by students with psychological or emotional disabilities seeking to live with assistance animals in university housing.  The suit also charges that Kent State treats students with psychological and emotional disabilities who need to live with assistance animals less favorably than similarly situated students with other types of disabilities such as mobility disabilities or vision impairments .   This lawsuit arose as a result of a complaint filed with the Department of Housing and Urban Development (HUD) by a student enrolled at Kent State who sought to live with a dog following a Kent State psychologist’s recommendation that living with a dog would help alleviate symptoms of the student’s disability. 

“The Fair Housing Act requires housing providers, including universities operating student housing, to grant reasonable accommodations to people with disabilities to ensure equal housing opportunities,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division.  “Housing providers may not discriminate against individuals based on the type of disability they have. The Justice Department is committed to enforcing fair housing laws that protect the rights of all people, including individuals with psychological or emotional disabilities, to obtain reasonable accommodations when they are needed.”

“Many people with disabilities rely on therapy animals to enhance their quality of life,” said HUD Assistant Secretary Gustavo Velasquez for Fair Housing and Equal Opportunity.  “HUD and the Department of Justice will continue to work together to take action whenever the nation’s fair housing laws are violated.”

The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions and a civil penalty.  Any individuals who have information relevant to this case are urged to contact the Housing and Civil Enforcement Section of the Civil Rights Division at 1-800-896-7743, extension 992.  

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.  More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crtg .  Individuals who believe that they have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov , or contact HUD at 1-800-669-9777 or through its website, www.hud.gov

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

Related Materials:

U.S. v. Kent State

A Corona, California, man was sentenced today to serve six years in prison to be followed by three years of supervised release in connection with a fraudulent advance fee scheme and tax evasion. 

Shannon Johnson, 51, formerly of Laytonsville, Maryland, was sentenced by Chief U.S. District Judge Deborah K. Chasanow, who also entered an order that Johnson forfeit $3.7 million, and as a special condition of his supervised release, cooperate with the Internal Revenue Service (IRS) in determining all taxes owed for tax years 2002 through 2009, and to pay the IRS all additional taxes, interest and penalties.

The sentence was announced by Deputy Assistant Attorney General Ronald Cimino of the U.S. Department of Justice Tax Division; U.S. Attorney Rod J. Rosenstein for the District of Maryland;; Special Agent in Charge Thomas J. Kelly of the IRS - Criminal Investigation, Washington, D.C., Field Office; and Special Agent in Charge Stephen E. Vogt of the FBI.

Johnson admitted that he ran a fraudulent advance fee scheme from 2006 to 2009, wherein Johnson presented himself as a wealthy international investment banker who could provide millions of dollars and euros in financing to businesses and individuals.  In return for substantial advance banking fees, Johnson and his wife, Yvette, promised to provide investors with money which they claimed they held in an overseas bank account.  Shannon Johnson provided these businesses and investors with false documents purporting to be from the overseas bank to authenticate the funds.  The Johnsons developed relationships with pastors, ministers and religious-based organizations to sell themselves as philanthropists on a humanitarian mission.  Shannon Johnson received payments and gifts from pastors and ministers who believed substantial donations would be made to their churches.  Businesses and individuals wired and mailed the advance fees to multiple bank accounts controlled by the Johnsons in different states.  Yvette Johnson opened bank accounts and conducted financial transactions using proceeds obtained from the Johnsons’ business activities.

According to his plea agreement, despite receiving approximately $3.7 million in advance fees from individuals and businesses, Shannon Johnson never provided the promised financing.  Instead, the Johnsons used the money to support their lifestyle, which the indictment alleges included the purchase of Bentley, Mercedes Benz and BMW automobiles, the leasing of a $3.5 million residence in California for $18,000 a month, travel on private jets and the funding of the mortgage on their Laytonsville residence.  Johnson admitted that he obtained $3.7 million by victimizing at least 11 individuals and businesses.

The Johnsons also evaded taxes on millions of dollars in income they earned from the advance fee scheme.  The Johnsons admitted that they filed individual tax returns for tax years 1998 through 2001 using false Forms W-2 to fraudulently generate a total of $66,097 in refund claims; evaded the payment of their 2002 through 2006 corporate and individual taxes totaling $98,220; and evaded the assessment of their 2007 through 2009 taxes.  The Johnsons attempted to conceal their income and assets from the IRS by selling assets in their own names, titling assets in the names of nominees, using multiple bank accounts across three states to disperse and conceal income, using nominees and fraudulent taxpayer identification numbers to open and maintain bank accounts and using multiple business names to conduct business.

Shannon Johnson’s bail was revoked in September 2013 after the court found that there was probable cause to believe that he attempted to commit another fraud while on pre-trial release for the pending charges in this case. 

Yvette Johnson, 52, of Corona, California, previously pleaded guilty to her participation in the fraud scheme and is scheduled to be sentenced on Sept. 29.

This case was investigated by IRS-Criminal Investigation and the FBI, and was prosecuted by Assistant Chief John N. Kane of the Tax Division and Assistant U.S. Attorney Thomas Sullivan for the District of Maryland.

Calling prescription drug addiction an “urgent and growing threat” to our nation’s public health, Attorney General Eric Holder on Monday announced a new Drug Enforcement Administration (DEA) regulation that would allow pharmacies, hospitals, clinics, and other authorized collectors to serve as authorized drop-off sites for unused prescription drugs. Under the new policy, long-term care facilities will also be able to collect controlled substances turned in by residents of those facilities, and prescription drug users everywhere will have permission to directly mail in their unused medications to authorized collectors.

Attorney General Holder said the new changes will help save lives and protect American families from the increased dangers of prescriptions drug misuse. In 2011 alone, more than half of the 41,300 unintentional drug overdose deaths in the United States involved prescription drugs, and hazardous opioid pain relievers led to about 17,000 of those deaths. Young people are especially susceptible to these dangers. The Attorney General noted that nearly four in 10 teens who have misused or abused a prescription drug have obtained it from their parents’ medicine cabinet.

“These shocking statistics illustrate that prescription drug addiction and abuse represent nothing less than a public health crisis,” the Attorney General said in a video message posted on the Justice Department’s website.  “Every day, this crisis touches – and devastates – the lives of Americans from every state, in every region, and from every background and walk of life.”

The new policy announced Monday builds on existing take-back programs launched by the DEA.  A recent take-back event coordinated by the DEA last April resulted in the safe return of 390 tons of prescription drugs at nearly 6,100 sites.  Over the last four years alone, the DEA and other partnering organizations have taken in over 4.1 million pounds—or more than 2,100 tons—of prescription pills.  The DEA’s next take-back event will be on Sept. 27, 2014.

In the video message, the Attorney General described the new policy as evidence of the department’s commitment to ending the national epidemic of prescription drug abuse that has already taken too many lives and hurt too many American families.

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

“Prescription drug misuse and abuse is an urgent—and growing—threat to our nation and its citizens.  According to a 2013 survey, roughly 6.5 million people ages 12 and older are current nonmedical users of prescription drugs.  As recently as 2011, more than half of the 41,300 unintentional drug overdose deaths in the United States involved prescription drugs—and opioid pain relievers were involved in nearly 17,000 of those deaths.  Nearly 110 Americans died every day that year from drug overdoses.

“And as we’ve learned from scientific studies, treatment providers, victims, and investigations, prescription drug abuse can easily lead to the abuse of heroin—an addiction that has become increasingly lethal.  In fact, in the decade from 2002 to 2011, the annual number of drug poisoning deaths involving heroin doubled, making prescription opioids and heroin some of the most lethal substances in common use.

“These shocking statistics illustrate that prescription drug addiction and abuse represent nothing less than a public health crisis.  And every day, this crisis touches – and devastates – the lives of Americans from every state, in every region, and from every background and walk of life.

“The Department of Justice has taken aggressive steps to fight back—by targeting the illegal supply chain; by disrupting so-called “pill mills”; and by expanding public health, education, and law enforcement efforts.  But we also recognize that much of this work must start at home.  Nearly four in 10 teens who have misused or abused a prescription drug have obtained it from their parents’ medicine cabinet.

“That’s why, today, I am announcing that we are expanding drug take-back efforts – by introducing new ways for people to safely dispose of old or unused prescription drugs.  Through new DEA regulations, patients will be allowed to more easily join the fight against prescription drug abuse by dropping off their leftover medications at pharmacies, hospitals, clinics, and other “authorized collectors.”  Beyond authorizing new drop-off sites, the new DEA rule will allow long-term care facilities to assist in the disposal of prescription controlled substances belonging to current or former residents.  And most importantly, patients or their family members can mail their prescription controlled substances to an authorized collector using pre-paid mail-back packages that can be obtained right from their pharmacy, or from other locations like libraries and community centers.

“Drug take-back programs on a more limited scale have already proven effective.  At a drug take-back event last April, Americans around the country turned in 390 tons of prescription drugs at nearly 6,100 sites coordinated by the DEA—and more than 4,400 state and local law enforcement partners.  Over the last four years alone, the DEA and its allies have taken in over 4.1 million pounds—that's more than 2,100 tons—of prescription pills.  Once collected, these medications are then responsibly destroyed to ensure that they don’t damage our environment by ending up in landfills or in the water supply.  With these new regulations, and with continued take-back events—like the one scheduled in the coming weeks for September 27th—we hope to increase those numbers, and prevent more potentially harmful medications from being misused or abused by young people and others.

“As a lifelong member of America’s law enforcement community—as a former judge and U.S. Attorney—I have seen the devastating consequences of prescription drug abuse firsthand.  And as Attorney General—and as a parent—I am committed to ending the national epidemic that has already stolen too many lives and torn apart too many families.  I thank you for your help and your partnership in ensuring that we can continue to save lives and protect the futures of our young people.”

For more information, please visit the DEA’s website at www.DEA.gov.   The full video of the Attorney General’s message is available at http://www.justice.gov/agwa.php .  

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division today announced that Sung-Hee Suh has been appointed to serve as Deputy Assistant Attorney General overseeing the Appellate, Capital Case and Fraud Sections.

“Sung-Hee Suh is an exceptional attorney with a depth of experience across the spectrum of the department’s practice areas, from white collar to violent crime,” said Assistant Attorney General Caldwell. “The Criminal Division continues to attract extraordinary talent both from within government and from the private sector. I am confident that Sung-Hee will be an excellent addition to the Criminal Division.”

Suh returns to the Department of Justice following 15 years at the law firm of Schulte Roth & Zabel LLP, where she was a partner in the Litigation, Financial Institutions, Securities Enforcement and White Collar Crime, and Regulatory and Compliance practice groups. While in private practice, Suh handled numerous matters involving securities and commodities fraud, public corruption, health care fraud, the Foreign Corrupt Practices Act, the Bank Secrecy Act, and anti-money laundering and economic sanctions violations.

Prior to joining that law firm, Suh served in the United States Attorney’s Office for the Eastern District of New York from 1994 to 1999, including as Deputy Chief of the Organized Crime and Racketeering Section. While at the U.S. Attorney’s Office, Suh investigated and prosecuted a wide range of crimes, including murder, drug trafficking, extortion, money laundering and fraud. She successfully prosecuted the acting boss of the Gambino family and more than 60 other members and associates of organized crime families. She also obtained guilty verdicts against a former managing director of a major securities firm, an attorney and an accountant for operating a Ponzi scheme.  

In recognition of her work at the U.S. Attorney’s Office, among other awards, she received the Director’s Award for Superior Performance as an Assistant United States Attorney from the Executive Office for United States Attorneys. In 2011, Suh received the Women of Power and Influence Award from the New York chapter of the National Organization for Women, and in 2012, Suh was recognized in Benchmark Litigation’s inaugural edition of the Top 250 Women in Litigation.  

Suh joined the U.S. Attorney’s Office after working as an associate at Davis Polk & Wardwell. She served as a law clerk for the Hon. Robert L. Carter in the U.S. District Court for the Southern District of New York. She graduated cum laude from Harvard/Radcliffe College, received a Master of Arts degree from the Harvard Graduate School of Arts and Sciences, and graduated cum laude from Harvard Law School.  

Life Care Services LLC (LCS), a manager of skilled nursing facilities based in Des Moines, Iowa, and CoreCare V LLP, doing business as ParkVista, a skilled nursing facility in Fullerton, California, have agreed to pay a total of $3.75 million to the government for causing the submission of false claims to Medicare for unreasonable or unnecessary rehabilitation therapy purportedly provided by RehabCare Group East Inc., a subsidiary of Kindred Healthcare Inc. 

“The provision of Medicare benefits must be dictated by patient need, not 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 commitment to safeguarding both Medicare beneficiaries and taxpayer dollars by holding accountable all entities involved in billing for unnecessary services.”

LCS has operated and managed skilled nursing facilities across the country, including ParkVista and, until 2013, a facility in Massachusetts.  At the suggestion of LCS, ParkVista and the Massachusetts facility hired RehabCare to provide rehabilitation therapy services at their facilities. 

The settlement resolves allegations that ParkVista submitted and LCS caused both ParkVista and the Massachusetts facility to submit false claims for rehabilitation therapy.  The government alleges that LCS and ParkVista 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 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 LCS and ParkVista 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 skilled nursing facilities and the patients’ families should be able to have confidence that the facilities are not allowing therapy companies to manipulate the amount of therapy being provided based on financial motives,” said U.S. Attorney Carmen M. Ortiz for the District of Massachusetts.  “Settlements like this one show that, when a facility contracts with an outside rehabilitation therapy provider, the facility has a continuing responsibility to ensure that the provider is not engaged in conduct that causes the submission of false claims to Medicare.”

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. 

Child Cyber Safety Night at the Ballpark is the latest effort by the Justice Department and its law enforcement and community partners to encourage parents to speak with their children about online and cell phone safety and provide prevention materials.  As part of the event, the department will receive the Washington Nationals Spirit Award.  Deputy Attorney General James Cole will be recognized in an on-field ceremony at Nationals Park along with Office of Juvenile Justice and Delinquency Prevention (OJJDP) Administrator Robert L. Listenbee, and Special Agent in Charge Tim Gallagher of the FBI Washington Field Office. 

The Spirit Award will be announced during the pre-game show scheduled to begin at 3:00 p.m. Saturday, Sept. 6, 2014, before the 4:05 p.m. Major League Baseball game between the Washington Nationals and the Philadelphia Phillies. 

In a public service announcement to be shown at the game, Attorney General Eric Holder will emphasize the importance of creating an ongoing dialogue with children about safe use of technology.  

“As a parent, I understand the opportunities – and the challenges – that new technologies present for America’s young people,” Attorney General Holder will say in the announcement.  “It’s up to each of us to start a dialogue with our kids about safe Internet and cell phone practices.  Together, we can ensure that our kids are safe and protected – both online and off.”

Child Cyber Safety Night at the Ballpark is a large-scale awareness event being led by INOBTR (I Know Better), a non-profit organization and OJJDP grantee focused on promoting youth safety.  The Federal Bureau of Investigation (FBI) and Internet Crimes Against Children Task Force Program (ICAC) will join INOBTR in sharing resources for parents and children via the Community Clubhouse at the Center Field Plaza.  Materials will be available when the gates open Saturday at 1:30 p.m. through the third inning of the game. 

OJJDP provides national leadership, coordination and resources to prevent and respond to juvenile delinquency and victimization.  For more on Internet and cell phone safety, please visit: www.projectyouthsafety.org/cybersafe.

Press inquiries regarding logistics should be directed to Kelly McMahon at kelly@INOBTR.org or 314-853-1053.

A federal jury in Omaha, Nebraska, found a Pelham, Georgia, man guilty late yesterday of seven counts of conspiracy to file and filing false liens against two U.S. District Court judges, the U.S. Attorney for the District of Nebraska, two Assistant U.S. Attorneys and an Internal Revenue Service (IRS) special agent, the Justice Department announced.

Randall David Due faces a statutory maximum sentence of 10 years in prison for each false lien conviction.  Based on the evidence introduced at trial and court filings, Due and co-conspirator Donna Kozak, of Omaha, engaged in a conspiracy to retaliate against federal officials involved in the criminal investigation and prosecution of David and Bernita Kleensang, associates of Due and Kozak who were convicted of federal tax crimes in 2012.  Kozak was tried separately and convicted on Aug. 1.

Due and Kozak initially retaliated against the federal judge who presided over the Kleensang trial by filing a false lien against her for $19 million with the Boyd County Clerk’s Office in Butte, Nebraska.  After a federal grand jury indicted Kozak for filing the false lien and for committing federal tax crimes, Due and Kozak filed five $18 million false liens with the Washington County Register of Deeds Office in Blair, Nebraska, against the federal officials involved in the investigation and indictment of Kozak and additional federal officials involved in the Kleensang case.

This case was investigated by special agents of the FBI and the department’s Tax Division prosecuted the case.

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

A federal court has permanently barred a Rancho Santa Margarita, California, man 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. 

Kenneth Elliott consented to a permanent injunction order entered by District Judge Josephine L. Staton of the U.S. District Court for the Central District of California.

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 complaint alleged that Elliott falsely informed his customers that the welfare benefit plans he promoted and operated were legal.  But, according to the complaint, Elliott has been promoting and operating plans that illegally permitted his customers to both claim substantial tax deductions for their plan contributions, then later access the full cash value of their plan contributions by taking out loans against the life insurance policies purchased with plan contributions.  The complaint alleged that Elliott’s promotion and operation of these unlawful welfare benefit plans deprived the U.S. Treasury of significant amounts of tax and subjected his customers to audits and Internal Revenue Service (IRS) scrutiny.

The injunction order bars Elliott from selling and operating any purported welfare benefit plans.  The court also ordered Elliott to send a copy of the injunction order to his customers.

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.

Joshua Vandyk, an investment advisor, was sentenced today to serve 30 months in prison for conspiring to launder monetary instruments, the Justice Department and Internal Revenue Service (IRS) announced.

Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted by a grand jury in the U.S. District Court for the Eastern District of Virginia on March 6, and the indictment was unsealed March 12 after the defendants were arrested in Miami.  Vandyk, 34, pleaded guilty on June 12, St-Cyr, 50, pleaded guilty on June 27, and Poulin, 41, pleaded guilty on July 11.  St-Cyr and Poulin are scheduled to be sentenced on Oct. 3. 

According to the plea agreements and statements of facts, Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud, specifically $2 million.  Vandyk, St-Cyr and Poulin assisted undercover law enforcement agents posing as U.S. clients in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners.  Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented that the funds would not be reported to the U.S. government.

According to court documents, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based there.  St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens.  Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada as well as Turks and Caicos.  His clientele also included numerous U.S. citizens.  Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government, including the IRS.  Vandyk and St-Cyr directed the undercover agents to create an offshore corporation with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with U.S. clients.  Vandyk, St-Cyr and Poulin used the offshore entity to move money into the Cayman Islands and used Poulin as a nominee intermediary for the transactions.

According to court documents, Poulin established an offshore corporation called Zero Exposure Inc. for the undercover agents and served as a nominal board member in lieu of the clients.  Poulin transferred approximately $200,000 that the defendants believed to be the proceeds of bank fraud from the offshore corporation to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside of the United States in the name of the offshore corporation.  The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients.  Clients were able to monitor their investments online through the use of anonymous, numeric passcodes.  Upon request from the U.S. client, Vandyk and St-Cyr liquidated investments and transfered money, through Poulin, back to the United States.  According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.

The case was investigated by special agents of the IRS-Criminal Investigation.  Trial Attorney Todd Ellinwood and Assistant Chief Caryn Finley of the Justice Department’s Tax Division and Assistant U.S. Attorney Kosta Stojilkovic for the Eastern District of Virginia are prosecuting the case.  The Justice Department and the IRS would like to thank the Royal Canadian Mounted Police, the Royal Cayman Islands Police Service and the Royal Turks and Caicos Islands Police Force for their assistance in this investigation.

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

Attorney General Eric Holder released the following statement Friday announcing that Stuart Delery, who currently serves as Assistant Attorney General for the Civil Division, will serve as Acting Associate Attorney General, which is the Justice Department’s third-ranking post:

“Stuart Delery is an exceptional public servant, a dedicated colleague, and a superb lawyer who will continue to ably serve the Department of Justice and the American people in his new role as Acting Associate Attorney General. 

“Stuart is a lawyer’s lawyer who, even as he has risen to the leadership of the department, continues to thrive in the court setting and routinely is called on to personally argue the most complex cases.  Over the last year, he and his colleagues have led government-wide implementation of the Supreme Court’s historic decision in United States v. Windsor—a case, again, that he personally argued at the appellate level—to ensure that all Americans are afforded the rights, protections, and benefits that they deserve. 

“Through his outstanding leadership of the Civil Division, Stuart has helped to strengthen our nation's security, to protect public health and safety, and to achieve justice in cases of financial fraud and recover billions of dollars for taxpayers.  I can think of no more dedicated, more capable, or more passionate public servant to continue the duties, and uphold the high standards, that defined Tony West's time in office.  I am certain that Stuart will help lead us to new heights.  I look forward to his continued contributions in the days ahead.”

A New Jersey man pleaded guilty today to orchestrating an eight-year scheme to falsify employment certifications to facilitate the illegal entry of Indian immigrants into the United States and to filing a false tax return.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey, Chief Richard Weber of Internal Revenue Service – Criminal Investigation (IRS-CI) and Director Bill A. Miller of the State Department’s Diplomatic Security Service (DSS) made the announcement.

Sandipkumar Patel, 41, of Edison, New Jersey, pleaded guilty before U.S. District Judge William H. Walls of the District of New Jersey to conspiring to defraud the United States and to filing a false federal income tax return. Sentencing is scheduled for Jan. 6, 2015.

According to court documents filed with the plea agreement, from 2001 until 2009, Patel sponsored the visa applications of Indian nationals by falsely claiming to provide employment for them in the United States. Patel falsely certified on the visa applications that he would employ the immigrants in various technical fields at several New Jersey companies, thereby facilitating their illegal entry into the United States. Over the course of the scheme, immigrants paid Patel thousands of dollars for the false certifications to fraudulently secure the visas. To disguise the scheme, Patel issued payroll checks and other payroll forms. Patel required the immigrants to return the money from the checks and also to reimburse him for his payroll tax expenses. Patel used the fraudulent pay stubs and payroll checks to support false applications to extend the visas, and Patel charged the immigrants fees for the visa extensions.

As a result of falsely carrying the immigrant employees on his payrolls, Patel overstated his payroll expenses on his federal income tax returns by more than $1.4 million over four years, under-reporting his tax obligation by over $400,000 for those years.   

This case was investigated by the IRS-CI and DSS. The case is being prosecuted by Senior Trial Attorneys Hope S. Olds and William H. Kenety of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Danielle M. Corcione of the District of New Jersey, with assistance from the Criminal Division’s Asset Forfeiture and Money Laundering Section.

A Canton, Massachusetts, man was arrested today at Boston's Logan International Airport in connection with the ongoing criminal investigation of New England Compounding Center (NECC) by the Justice Department’s Civil Division and U.S. Attorney’s Office for the District of Massachusetts.

Glenn Adam Chin, 46, was attempting to board a plane to Hong Kong when he was arrested by federal authorities on one count of mail fraud.  He is scheduled to appear before Chief Magistrate Judge Jennifer C. Boal in the U.S. District Court for the District of Massachusetts later today.  The maximum sentence under the statute is 20 years in prison, followed by three years of supervised release and a $250,000 fine.

The U.S. Attorney’s Office and the Civil Division’s Consumer Protection Branch have conducted an active ongoing criminal investigation of NECC since the nationwide fungal meningitis outbreak began in the fall of 2012.  Following the outbreak, the Center for Disease Control (CDC) reported that 751 patients across the country were diagnosed with a fungal infection after receiving injections of preservative-free methylprednisolone acetate, or MPA, compounded at NECC.  The CDC reported that of those 751 patients, 64 died.  

Chin was a supervising pharmacist at NECC who was involved in compounding the contaminated MPA that caused the outbreak.  The criminal complaint charges Chin with participating in a scheme to fraudulently cause one lot of MPA to be labeled as injectable, meaning that it was sterile and fit for human use, and shipped to one of NECC’s customers, Michigan Pain Specialists.  As alleged in the affidavit, after receiving the MPA from NECC, doctors at Michigan Pain Specialists injected the drug into their patients believing it to be injectable as labeled.  As a result, 217 of those patients contracted fungal meningitis, and 15 of those patients died.

Although the criminal investigation of Chin and others is ongoing, the U.S. Attorney's Office charged and arrested Chin today after federal authorities learned that he was planning to leave the country on an international flight that was scheduled to depart this morning. 

If you are a victim in the NECC matter you may call the U.S. Attorney's Office victim assistance message line at 888-221-6023 or email usama.victimassistance@usdoj.gov to obtain case status information or assistance.  You may also find information at:  http://www.justice.gov/usao/ma/news.html .

U.S. Attorney Carmen M. Ortiz; Assistant Attorney General Stuart F. Delery for the Civil Division; Acting Special Agent in Charge James Royal of the Food and Drug Administration, Office of Criminal Investigations; Special Agent in Charge Vincent Lisi of the FBI’s Boston Field Division; Inspector in Charge Kevin Niland of the U.S. Postal Inspection Service; Special Agent in Charge Jeffrey Hughes of the U.S. Department of Veterans Affairs, Office of Inspector General Northeast Field Office and Resident Agent in Charge Patrick J. Hegarty of the Defense Criminal Investigative Service-Office of Inspector General in Boston, made the announcement today.  The case is being prosecuted by George P. Varghese and Amanda P.M. Strachan of U.S. Attorney Ortiz’s Health Care Fraud Unit, and John W.M. Claud of the Civil Division’s Consumer Protection Branch.

The details contained in the complaint are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

A federal jury returned guilty verdicts today against former Virginia Governor Robert F. McDonnell and former First Lady of Virginia Maureen G. McDonnell for participating in a scheme to violate federal public corruption laws.

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that KENNETH FREDERICK CALVO was sentenced this week in the District Court of Guam by Chief Judge Frances Tydingco-Gatewood, to 108 months incarceration, and three years of supervised release.

Defendant Calvo pled guilty on December 17, 2013 to Attempted Possession of Methamphetamine with Intent to Distribute, in violation of Title 21 U.S.C. Section 841(a)(1). Defendant Calvo received a package which contained 214.9 grams of methamphetamine hydrochloride.  The drug was sent from California and Defendant Calvo intended to distribute the drug on Guam.  The package was detected and intercepted by the United States Postal Service.

United States Attorney Limtiaco thanks the United States Postal Service for their vigilance in the detection of drugs which are mailed to Guam through the United States Postal system.   Credit is also given to Homeland Security Investigations who participated in the investigation.   The case was handled by Assistant U.S. Attorney R. San Nicolas.

Attorney General Eric Holder announced today that the Justice Department has launched two initiatives to address concerns about police services in the city of Ferguson and in St. Louis County, Missouri.  First, in addition to the ongoing criminal civil rights investigation, the Civil Rights Division has opened a civil pattern or practice investigation into allegations of unlawful policing by the City of Ferguson Police Department (FPD).  Second, the Attorney General announced that the Community Oriented Policing Services (COPS) Office has launched a Collaborative Reform Initiative with the St. Louis County Police Department (SLCPD).

“The Department of Justice is working across the nation to ensure that the criminal justice system is fair, constitutional and free of bias,” said Attorney General Holder.  “The interventions in Missouri are an important part of that commitment.  While there is much work left to do, we feel confident that there are solutions to any issues we find and that community trust in law enforcement can be restored and maintained.  Ferguson and St. Louis County are not the first places that we have become engaged to ensure fair and equitable policing and they will not be the last.  The Department of Justice will continue to work tirelessly to ensure that the Constitution has meaning for all communities.”

The pattern or practice investigation will look at whether officers of the Ferguson Police Department have engaged in systemic violations of the Constitution or federal law.  The investigation will focus on the Ferguson Police Department’s use of force, including deadly force; stops, searches and arrests; discriminatory policing; and treatment of detainees inside Ferguson’s city jail by Ferguson police officers.  The department will consider all relevant information, particularly the efforts that FPD has undertaken to ensure compliance with federal law, and the experiences and views of the community. 

Over the past five fiscal years, the Civil Rights Division has opened over 20 pattern or practice investigations into police departments across the country, which is more than twice as many as were opened in the previous five fiscal years.  The division is enforcing 14 agreements to reform law enforcement practices at agencies both large and small.  These agreements have already resulted in tangible changes in these communities by ensuring constitutional policing, enhancing public safety and making the job of delivering police services safer and more effective.

The investigation is being conducted by attorneys and staff from Civil Rights Division.  They will be assisted by experienced law enforcement experts.  The department encourages anyone wishing to provide relevant information to contact the department at 1-855-856-2132, or via email at community.ferguson@usdoj.gov .

The COPS Collaborative Reform Technical Assistance process with the SLCPD is a voluntary process that will include an open, independent and objective assessment of key operational areas of the police department, such as training, use of force, handling mass demonstrations, stops, searches, arrests, and fair and impartial policing. The assessment will include the SLCPD police academy which trains officers for many police departments in the region, including the FPD.  The findings of this assessment, and recommendations to address any deficiencies that it uncovers, will be provided in a public report and shared with the community.  Additionally, SLCPD Chief Jon Belmar has requested that COPS conduct an after action report on the SLCPD’s response to the protests following the shooting of Michael Brown.

The Collaborative Reform process is an initiative in which the COPS Office, in partnership with a designated technical assistance provider and subject matter experts, works with a law enforcement agency to assess an issue that affects police and community relationships.  Grounded in the principles of constitutional policing and procedural justice, it is a means to organizational transformation through an analysis of policies, practices, training, and tactics around a specific issue that can jeopardize an agency’s legitimacy within its community.  It is not a short term solution for a serious deficiency, but a long term strategy that identifies the issues within an agency that affect public trust and offers recommendations on how to improve the issue and enhance the relationship between the police and the community.

The Collaborative Reform process was initially launched in 2011.  The Las Vegas Metropolitan Police Department was the first agency to participate and complete the process, which resulted in the adoption of over 75 recommendations regarding the use of force.  The COPS Office is currently working with the Philadelphia and Spokane police departments with this process.

“Today we are launching a comprehensive review of the Ferguson Police Department to assess whether police practices are constitutional and fair in Ferguson,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division.  “We are encouraged by the pledge of cooperation from Mayor Knowles and Chief Jackson, and we look forward to working with them as our process moves forward.”

“The recent disturbances in Ferguson have revealed significant mistrust between the community and police agencies throughout the county, including the St. Louis County Police Department,” said COPS Director Davis.  “The county has expressed a strong desire to take steps to create a relationship of trust and to ensure fairness and equity in its policing practices, and I applaud St. Louis County Police Chief Jon Belmar for seeking technical assistance and agreeing to the Collaborative Reform process.  The advancements that will be made through this effort will not only benefit the St. Louis county police department; they will serve as a model for all police agencies in the region and throughout the nation.”

The department is also conducting in a thorough, fair and independent criminal investigation into the circumstances of the fatal shooting of Michael Brown on in Ferguson on Aug. 9, 2014.  Although the department is working cooperatively with the local investigators, the federal investigation supplements, but does not supplant, the St. Louis County Police Department’s investigation into the shooting incident.  The initiatives announced today are also separate from the ongoing current criminal investigations related to the death of Michael Brown.

The Civil Rights Division has an ongoing, separate investigation of the St. Louis County Juvenile Court to determine whether it engages in patterns or practices of violations of young people’s rights.  The section is assessing whether there are violations of due process, equal protection or access to counsel.  Anyone wishing to provide information related to that investigation can email the department at Community.StLouis@usdoj.gov or call toll free 855-228-2151.

The Justice Department has taken similar steps involving a variety of state and local law enforcement agencies, both large and small, in jurisdictions throughout the United States using its authority under the Violent Crime Control and Law Enforcement Act of 1994, the Omnibus Crime Control and Safe Streets Act of 1968, and Title VI of the Civil Rights Act of 1964.  Under Attorney General Holder’s leadership, more investigations have resulted in comprehensive, court-overseen agreements to fundamentally change the law enforcement agency’s police practices than in any other five-year period in the department’s history.

Costco Wholesale Corporation, one of the nation’s largest retailers, has agreed to cut its emissions of ozone-depleting and greenhouse gases from leaking refrigeration equipment at more than half of its stores nationwide.

In the settlement announced today by the U.S. Environmental Protection Agency and U.S. Department of Justice, Costco will pay $335,000 in penalties for federal Clean Air Act violations and will fix refrigerant leaks and make other improvements at 274 of its stores, which EPA estimates will cost about $2 million over the next three years.

“Compliance with the nation’s Clean Air Act is key to protecting all Americans from air pollution that damages our atmosphere and changes our climate,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Industry needs to lead the way in abandoning harmful chemicals in favor of using and developing greener, environmentally friendly alternatives to protect our health and our climate.”

“Cutting harmful greenhouse gas emissions is a national priority for EPA, and this settlement will lead to significant reductions of an ozone-depleting gas that is 1,700 times more potent than carbon dioxide,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Fixing leaks of refrigerants, improving compliance and reducing emissions will make a real difference in protecting us from the dangers of ozone depletion, while reducing the impact on climate change.”

Costco violated the Clean Air Act by failing to promptly repair refrigeration equipment leaks of the refrigerant R-22, a powerful ozone-depleting hydrochlorofluorocarbon, between 2004 and 2007. Costco also failed to keep adequate records of the servicing of its refrigeration equipment to prevent harmful leaks. Destroying the ozone layer results in dangerous amounts of cancer-causing ultraviolet solar radiation striking the earth, increasing skin cancers and cataracts. R-22 is also a potent greenhouse gas with 1,800 times more global warming potential than carbon dioxide or CO2. 

The settlement requires Costco to retrofit or replace commercial refrigeration equipment at 30 of its stores to reduce ozone-depleting and greenhouse gas emissions. Costco must also implement a refrigerant management system to prevent and repair coolant leaks and reduce its corporate-wide average leak rate at least 20 percent by 2017. In addition, Costco will install and operate environmentally friendly glycol refrigeration systems and centrally monitored refrigerant leak detection systems at all new stores. 

Today’s settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions.  The Clean Air Act requires owners or operators of commercial refrigeration equipment that use over 50 pounds of ozone-depleting refrigerants and have an annual leak rate over 35 percent to repair all leaks within 30 days.

Corporate commitments to reduce emissions from refrigeration systems have been increasing in recent years. EPA’s GreenChill Partnership with food retailers reduces refrigerant emissions and decreases their impact on the ozone layer and climate change by transitioning to environmentally friendlier refrigerants, using less refrigerant and eliminating leaks, and adopting green refrigeration technologies.

Costco, headquartered in Issaquah, Washington, operates 466 stores in the U.S. and additional stores worldwide, with revenues of $105.2 billion in 2013. Today’s settlement covers 274 Costco stores with regulated commercial refrigeration equipment, including 67 stores in California, 14 in Arizona, five in Nevada, and four in Hawaii.

The proposed settlement is subject to a 30-day public comment period and final court approval.

Read the proposed settlement at: http://www.usdoj.gov/enrd/Consent_Decrees.html

Under a proposed settlement reached with the United States and the state of Indiana, the Atlantic Richfield Company and E.I. Du Pont de Nemours and Co. (DuPont) will pay for an estimated $26 million cleanup of lead and arsenic contamination in parts of a residential neighborhood in East Chicago, Indiana, announced the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA).

The yards in this neighborhood are contaminated with lead and arsenic through industrial operations that took place from at least the early 1900s through 1985.  During that time, lead smelting and refining as well as other manufacturing processes that used lead and arsenic were located on and near the area that came to be known as the Calumet neighborhood of East Chicago.  The cleanup will involve digging up contaminated soil, hauling it away for disposal, and restoring the yards with clean soil.

Under the settlement, EPA itself will do the work in the neighborhood.  EPA will identify the yards that need to be remediated, will work with property owners to develop property‑specific drawings showing which soils on each property must be excavated, will do the excavation, and will restore the properties after excavation is complete.  Atlantic Richfield and DuPont will pay for EPA’s work and will also be responsible for transporting the contaminated soil out of the neighborhood and properly disposing of it. 

To manage the cleanup, EPA and the state divided the Calumet neighborhood into three zones.  Today’s settlement covers two of them: a neighborhood that includes the Carrie Gosch Elementary School and residences operated by the East Chicago Housing Authority and a neighborhood located between the Elgin & Joliet Railway Line on the west and Parrish Avenue on the east.  Cleanup of the third area of the Calumet neighborhood is the subject of further discussions.

“Under this settlement, Atlantic Richfield and DuPont will fund the first phase of cleaning up historical lead and arsenic contamination in residential properties in part of East Chicago,” said Sam Hirsch, Acting Assistant Attorney General for the Department of Justice’s Environment and Natural Resources Division.  “This marks the start, not the end, of cleaning up the contamination that has burdened this community for far too long.”

“This settlement ensures that almost 300 residential properties, parks and public spaces in East Chicago will be cleaned up – and that the companies responsible for contaminating those sites will pay 100 percent of the costs for this phase of the cleanup,” said EPA Regional Administrator Susan Hedman.

“My office previously has worked through the federal courts in other cases to improve the quality of life for citizens of East Chicago,” said Indiana Attorney General Greg Zoeller, whose office represented the Indiana Department of Environmental Management.  “Under this appropriate cooperative effort between the state of Indiana and federal EPA, and with the commitments of the settling corporations, East Chicago residents will see progress made toward removing a health hazard and producing long-term benefit for their community.”

“This is great news for the citizens whose homes have been impacted,” said Indiana Department of Environmental Management (IDEM) Commissioner Thomas Easterly.  “Everyone wins when responsible parties come together and agree to do what is best for the community.”

The Calumet neighborhood is part of an EPA Superfund site known as the USS Lead Site.  EPA previously investigated the contamination in this neighborhood and issued a decision calling for its cleanup.

In a complaint filed simultaneously with the settlement, the United States and the state allege that Atlantic Richfield and DuPont are liable under the Superfund law for the cleanup because they or their predecessors either are owners or were owners/operators of plants that released lead and arsenic into the environment.

The terms of the settlement are included in a proposed consent decree filed with the U.S. District Court in Hammond, Indiana.  The consent decree is subject to a 30‑day public comment period and court approval.  The consent decree will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html

Acting Assistant Attorney General Molly Moran for the Civil Rights Division and United States Attorney Bill Nettles announced today that Reginald Wayne Miller, of Marion, South Carolina, has entered a guilty plea in federal court in Florence to fraud in foreign labor contracting.  Additionally, Miller entered a guilty plea to visa fraud and wage and hour violations.  United States District Judge R. Bryan Harwell of Florence accepted the guilty plea and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. probation office.

Evidence presented at the hearing established that Miller knowingly recruited and enticed foreign students to attend Cathedral Bible College, where he was president.  In doing so, Miller recruited these students outside of the United States for purposes of employment at Cathedral Bible College by means of false representations and promises regarding the employment.  Further, he made material false statements under penalty of perjury on the related immigration documents for these student employees.  Once the students arrived in the United States, Miller violated the Fair Labor Standards Act by failing to pay the student employees the applicable minimum wage.

The maximum penalty for fraud in foreign labor contracting is imprisonment for five years and/or a fine of $250,000.  The maximum penalty for visa fraud is imprisonment for 15 years and/or a fine of $250,000.  The maximum penalty for wage and hour violations is imprisonment for six years and/or a fine of $10,000.

The case was investigated by agents of the U.S. Department of Homeland Security, Immigration and Customs Enforcement.  Justice Department Civil Rights Division Trial Attorney Saeed A. Mody and Assistant U.S. Attorney Carrie Fisher Sherard are prosecuting the case.

A Southfield, Michigan, resident was sentenced today to serve 21 months in prison to be followed by two years of supervised release for his participation in a conspiracy to commit bank fraud, the Justice Department announced.

Peter Allen was charged in a superseding indictment on July 16, 2013, and pleaded guilty to conspiracy to commit bank fraud on April 29. Allen was also ordered to pay $96,400 and $97,900 in restitution, respectively, to National City Bank and Fannie Mae, the financial institutions that he helped defraud.

Court documents state that from approximately January 2006 to December 2008, Allen and his co-defendants conspired to defraud lending institutions by obtaining mortgage loans using fraudulent information. The charging documents allege that Allen and others devised a scheme wherein they purchased property for approximately $5,000 to $40,000 per home, and then recruited straw buyers to submit fraudulent loan applications for home mortgages in exchange for a fee. According court documents, Allen assisted in executing the relevant scheme by meeting with straw buyers and encouraging them to participate in the scheme. The loss resulting from Allen’s criminal activities is approximately $231,000.

This case was investigated by the FBI, Internal Revenue Service – Criminal Investigation and the Drug Enforcement Administration. Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Tax Division are prosecuting the case.

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

The Department of Justice has seized approximately $500,000 in assets traceable to corruption proceeds accumulated by Chun Doo Hwan, the former president of the Republic of Korea. This seizure brings the total value of seized corruption proceeds of President Chun to more than $1.2 million.  

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI)­­ and Assistant Director Joseph S. Campbell of the FBI’s Criminal Investigative Division made the announcement after the seizure warrant issued by the U.S. District Court for the Eastern District of Pennsylvania was unsealed today.

“Chun Doo Hwan orchestrated a vast campaign of corruption while serving as Korea’s president,” said Assistant Attorney General Caldwell. “President Chun amassed more than $200 million in bribes while in office, and he and his relatives systematically laundered these funds through a complex web of transactions in the United States and Korea. Today’s seizure underscores how the Criminal Division’s Kleptocracy Initiative – working in close collaboration with our law enforcement partners across the globe – will use every available means to deny corrupt foreign officials and their relatives safe haven for their assets in the United States.”

“Our country will not be used by corrupt foreign leaders to conceal the illicit profits of their crimes,” said HSI Executive Associate Director Edge. “We will continue to work with our international law enforcement partners to ensure that such individuals are held accountable and that the assets are returned to their rightful owners.”

“The U.S. will not be a safe repository for assets misappropriated by corrupt foreign leaders,” said FBI Assistant Director Campbell.  “The FBI is committed to working with foreign and domestic partners to identify and return those assets to the legitimate owners, in this case the people of the Republic of Korea.”

The court in the Eastern District of Pennsylvania late yesterday unsealed an application filed on Aug. 22, 2014, by the Justice Department to seize an investment by former President Chun’s daughter-in-law in a Pennsylvania limited partnership worth approximately $500,000. In February 2014, the department obtained a court order from the Central District of California seizing $726,000 in proceeds from the sale of a residence located in Newport Beach, California, that President Chun’s son, Chun Jae Yong, purchased in 2005 with proceeds allegedly traceable to his father’s corruption.    

As alleged in the government’s application for a seizure warrant and supporting affidavit, President Chun was convicted in Korea in 1997 of receiving more than $200 million in bribes from Korean businesses and companies. President Chun and his relatives laundered some of these corruption proceeds through a web of nominees and shell companies in both Korea and the United States.

The United States is working closely with the Republic of Korea’s Supreme Prosecutor’s Office—Anti-Corruption Supervisory Division, the Ministry of Justice’s International Criminal Affairs Division and the Seoul Central District Public Prosecutor’s Foreign Criminal Affairs Department to forfeit these corruption proceeds.  

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

The investigation was conducted jointly by HSI Philadelphia, HSI Attaché Seoul, the FBI Kleptocracy Program of the International Corruption Unit within the Criminal Investigation Division, and the FBI’s West Covina Resident Agency of the Los Angeles Division. The case is being prosecuted by Trial Attorneys Woo S. Lee and Della Sentilles of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with substantial support from the U.S. Attorney’s Office for the Central District of California, the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Criminal Division’s Office of International Affairs.

A Colombian man extradited to the Eastern District of Virginia pleaded guilty today for his involvement in the kidnapping and murder of Drug Enforcement Administration (DEA) Special Agent James Terry Watson in Bogotá, Colombia, on June 20, 2013.  

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

“Special Agent Watson gave his life in the service of his country, and we will do everything in our power to honor his sacrifice,” said Attorney General Holder.  “This conviction is a critical step forward.  But while this action represents the first measure of justice for his kidnapping and murder, it will not be the last.  The Department of Justice will not rest until all those involved in this senseless act of violence have been held to account for their crimes.  Our nation will never yield in the protection and defense of its citizens.  And we will continue to demonstrate that anyone who seeks to harm an American will be found, will be prosecuted, and will be brought to justice.”

Julio Estiven Gracia Ramirez, 31, pleaded guilty before U.S. District Judge Gerald Bruce Lee of the Eastern District of Virginia to aiding and abetting the murder of an internationally protected person and conspiracy to kidnap an internationally protected person. Sentencing is scheduled for Dec. 5, 2014.

In a statement of facts filed with the plea agreement, Gracia Ramirez admitted that he and his conspirators agreed to conduct a “paseo milionario” or “millionaire’s ride” in which victims who were perceived as wealthy were lured into taxi cabs, kidnapped and then robbed. Gracia Ramirez admitted that he targeted Special Agent Watson and picked him up outside a Bogotá restaurant in his taxi. Soon after, two conspirators entered Gracia Ramirez’s taxi, and one used a stun gun to shock Special Agent Watson and the other stabbed him. Special Agent Watson was able to escape from the taxi, but he later collapsed and died from his injuries.

Six other defendants have been charged in an indictment in the Eastern District of Virginia for their alleged involvement in the murder of Special Agent Watson. Gerardo Figueroa Sepulveda, 39; Omar Fabian Valdes Gualtero, 27; Edgar Javier Bello Murillo, 27; Hector Leonardo Lopez, 34; and Andrés Alvaro Oviedo-Garcia, 22, are each charged with second degree murder, kidnapping and conspiracy to kidnap. Oviedo-Garcia is also charged with assault. Wilson Daniel Peralta-Bocachica, 31, is charged for his alleged efforts to destroy evidence associated with the murder of Special Agent Watson. Trial is set for Jan. 12, 2015.  

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

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

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

Attorney General Eric Holder released the following statement Wednesday on the departure, effective September 15, of Associate Attorney General Tony West:

“Since returning to the Justice Department in 2009, Tony West has been an indispensable member of the Department’s senior leadership team, an exemplary and dedicated public servant, and a close advisor and good friend. His tenure as Assistant Attorney General for the Civil Division was defined by historic steps forward, including the Administration’s decision not to defend the constitutionality of Section 3 of the Defense of Marriage Act. His service as Associate Attorney General has been marked by significant achievement – from his leadership in securing the landmark reauthorization of the Violence Against Women Act; to his passionate advocacy for the rights of American Indian and Alaska Native peoples; to his tireless work to combat financial fraud, hold corporations accountable, and fight for American consumers.

“Over the years, Tony’s efforts have made a tremendous and lasting difference in the lives of millions of people across the country. I have been honored to count him as a colleague – and privileged to work alongside him. I thank him for his service, and his friendship, over the past five years. And although I wish him the best as he opens an exciting new chapter in his career, I will miss his leadership, his many contributions, and his steadfast commitment to the cause of justice.”