District Not Recorded

The former president and chief executive officer of BizJet International Sales and Support Inc., a U.S.-based subsidiary of Lufthansa Technik AG with headquarters in Tulsa, Oklahoma, that provides aircraft maintenance, repair and overhaul services, pleaded guilty today for his participation in a scheme to pay bribes to foreign government officials.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Danny C. Williams Sr., of the Northern District of Oklahoma and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

“The former CEO of BizJet, Bernd Kowalewski, has become the third and most senior Bizjet executive to plead guilty to bribing officials in Mexico and Panama to get contracts for aircraft services,” said Assistant Attorney General Caldwell. “While Kowalewski and his fellow executives referred to the corrupt payments as ‘commissions’ and ‘incentives,’ they were bribes, plain and simple. Though he was living abroad when the charges were unsealed, the reach of the law extends beyond U.S. borders, resulting in Kowalewski’s arrest in Amsterdam and his appearance in court today in the United States. Today’s guilty plea is an example of our continued determination to hold corporate executives responsible for criminal wrongdoing whenever the evidence allows.”

“I commend the investigators and prosecutors who worked together across borders and jurisdictions to vigorously enforce the Foreign Corrupt Practices Act,” said U.S. Attorney Williams. “Partnership is a necessity in all investigations. By forging and strengthening international partnerships to combat bribery, the Department of Justice is advancing its efforts to prevent crime and to protect citizens.”

Bernd Kowalewski, 57, the former President and CEO of BizJet, pleaded guilty today in federal court in Tulsa, Oklahoma, to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and a substantive violation of the FCPA in connection with a scheme to pay bribes to officials in Mexico and Panama in exchange for those officials’ assistance in securing contracts for BizJet to perform aircraft maintenance, repair and overhaul services.

Kowalewski was arrested on a provisional arrest warrant by authorities in Amsterdam on March 13, 2014, and waived extradition on June 20, 2014. Kowalewski is the third BizJet executive to plead guilty in this case. Peter DuBois, the former Vice President of Sales and Marketing, pleaded guilty on Jan. 5, 2012, to conspiracy to violate the FCPA and a substantive violation of the FCPA and Neal Uhl, the former Vice President of Finance, pleaded guilty on Jan. 5, 2012, to conspiracy to violate the FCPA. Jald Jensen, the former sales manager at BizJet, has been indicted for conspiracy as well as substantive FCPA violations and money laundering and is believed to be living abroad. Charges were unsealed against the four defendants on April 5, 2013.

According to court filings, Kowalewski and his co-conspirators paid bribes directly to foreign officials to secure aircraft maintenance repair and overhaul contracts, and in some instances, the defendants funneled bribes to foreign officials through a shell company owned and operated by Jensen. The shell company, Avionica International & Associates Inc., operated under the pretense of providing aircraft maintenance brokerage services but in reality laundered money related to BizJet’s bribery scheme. Bribes were paid to officials employed by the Mexican Policia Federal Preventiva, the Mexican Coordinacion General de Transportes Aereos Presidenciales, the air fleet for the Gobierno del Estado de Sinaloa, the air fleet for the Gobierno del Estado de Sonora and the Republica de Panama Autoridad Aeronautica Civil.

Further according to court filings, the co-conspirators discussed in e-mail correspondence and at corporate meetings the need to pay bribes, which they referred to internally as “commissions” or “incentives,” to officials employed by the foreign government agencies in order to secure the contracts. At one meeting, for example, in response to a question about who the decision-maker was at a particular customer organization, DuBois stated that a director of maintenance or chief pilot was normally responsible for decisions on where an aircraft went for maintenance work. Kowalewski then responded by explaining that the directors of maintenance and chief pilots in the past received “commissions” of $3,000 to $5,000 but were now demanding $30,000 to $40,000 in “commissions.” Similarly, in e-mail correspondence between Uhl, DuBois, Kowalewski, and several others, Uhl responded to a question about BizJet’s financial outlook if “incentives” paid to brokers, directors of maintenance, or chief pilots continued to increase industry wide, stating that they would “work to build these fees into the revenue as much as possible. We must remain competitive in this respect to maintain and gain market share.”

On March 14, 2012, the department announced that it had entered into a deferred prosecution agreement with BizJet, requiring that BizJet pay an $11.8 million monetary penalty to resolve charges related to the corrupt conduct. That agreement acknowledged BizJet’s voluntary disclosure, extraordinary cooperation, and extensive remediation in this case. In addition, the department announced on March 14, 2012, that BizJet’s indirect parent company, Lufthansa Technik AG, entered into an agreement with the department in which the department agreed not to prosecute Lufthansa Technik provided that Lufthansa Technik satisfies its obligations under the agreement for a period of three years.

This case is being investigated by the FBI’s Washington Field Office with substantial assistance form the Oklahoma Field Office. The department has worked closely with its law enforcement counterparts in Amsterdam, Mexico and Panama, and has received significant assistance from Germany and Uruguay. The Criminal Division’s Office of International Affairs has also provided assistance. This case is being prosecuted by Assistant Chief Daniel S. Kahn and Trial Attorney David Fuhr of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kevin Leitch of the Northern District of Oklahoma.

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

The Justice Department announced today that the U.S. District Court for the Eastern District of New York has entered a consent decree of permanent injunction against Applied Polymer Systems dba APS Pharmaco (APS) and its president, Nuka Reddy, all of Lindenhurst, New York, to prevent the distribution of adulterated dietary supplements.

According to a complaint filed July 21, the defendants violated the Federal Food, Drug, and Cosmetic Act (FDCA) by manufacturing and distributing dietary supplements that were adulterated. Under the FDCA, dietary supplement manufacturers are required to have systems in place to ensure that their products meet specifications for identity, purity, strength and composition. The government’s actions resulted from a series of inspections of APS’ manufacturing facility beginning in 2012, which revealed, among other things, that APS failed to perform identity tests or examinations for certain dietary ingredients before using them in their products.

In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from committing violations of the FDCA. The consent decree requires the dietary supplement manufacturer to cease all operations and requires that if they wish to resume manufacturing dietary supplements in the future, the FDA first must determine that APS’ manufacturing practices have come into compliance with the law. The consent decree also requires a recall of all products sold since Jan. 1, 2014. The consent decree was filed with the complaint and was docketed on July 23.

The FDA referred this matter to the Department of Justice. The Consumer Protection Branch of the Justice Department’s Civil Division, together with the U.S. Attorney’s Office for the Eastern District of New York, brought this case on behalf of the United States.

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Armando Jose Velasquez, aka “Money,” 27, of East Chicago, Indiana, was sentenced today to serve 305 months in prison on federal racketeering charges relating to a Dec. 3, 2011, attempted murder.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David A. Capp for the Northern District of Indiana made the announcement. The sentence was imposed today by U.S. District Court Chief Judge Philip P. Simon.

According to court documents, on Dec. 3, 2011, Velasquez fired a gun into a car being driven by an 18-year-old resident of East Chicago, Indiana, and struck the victim three times. Velasquez believed that the victim was a rival gang member, but the victim was not actually a gang member and was not involved in any criminal activity. Velasquez had been previously convicted in the Lake County Superior Court in Indiana of voluntary manslaughter and sentenced to 12 years in prison in 2005 and was on state parole when he committed the offense.

Velasquez was part of a 24-defendant indictment alleging that members of the Imperial Gangsters committed 14 previously-uncharged homicides: 12 in East Chicago, Indiana, one in Hammond, Indiana, and one in Gary, Indiana. The indictment also charged a decade-long racketeering conspiracy that involved the attempted murder of 19 other victims and the large scale distribution of cocaine and marijuana.

Velasquez pleaded guilty on Jan. 10, 2014, to one count of conspiracy to participate in racketeering activity, attempted murder in aid of racketeering activity and a firearm offense relating to the Dec. 3, 2011, attempted murder. Velasquez is one of 22 defendants charged in the indictment to plead guilty. One defendant, Richard Reyes, was convicted by a jury of murder and conspiracy to commit racketeering activity on Jan. 24, 2014, and is scheduled to be sentenced on Sept. 30, 2014. The remaining defendant is scheduled for trial on Jan. 12, 2015.

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

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the FBI, and the East Chicago Police Department, with assistance from the Gary Police Department, the Hammond Police Department and the Lake County High Intensity Drug Trafficking Area Program. This case is being prosecuted by Trial Attorney Bruce R. Hegyi of the Criminal Division’s Capital Case Section and Assistant U.S. Attorney David J. Nozick of the Northern District of Indiana.

The Department of Justice announced today that an $80 million False Claims Act judgment was entered against BNP Paribas for submitting false claims for payment guarantees issued by the U.S. Department of Agriculture (USDA). BNP Paribas is a global financial institution headquartered in Paris.

“We will not tolerate the misuse of taxpayer funded programs designed to help American businesses,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Companies that abuse these programs will be held accountable.”

The United States filed a lawsuit against BNP Paribas in connection with its receipt of payment guarantees under USDA’s Supplier Credit Guarantee (SCG) Program. The program provided payment guarantees to U.S.-based exporters for their sales of grain and other agricultural commodities to importers in foreign countries. The program encouraged American exporters to sell American agricultural commodities to foreign importers and covered part of the losses if the foreign importers failed to pay. The SCG Program regulations provided that U.S. exporters were ineligible to participate in the SCG Program if the exporter and foreign importer were under common ownership or control.

The judgment entered by the court resolves the government’s allegations that, from 1998 to 2005, BNP Paribas participated in a sustained scheme to defraud the SCG Program. In furtherance of the scheme, American exporters and Mexican importers who were under common control improperly obtained SCG Program export credit guarantees for transactions between the affiliated exporters and importers. In some cases, the underlying transactions were shams and did not involve any real shipment of grain. BNP Paribas accepted assignment of the credit guarantees from the American exporters, even though it knew that the affiliated exporters and importers were ineligible for SCG Program financing, and a BNP Paribas vice-president, Jerry Cruz, received bribes from the exporters. Beginning in April 2005, when the Mexican importers began defaulting on their payment obligations, BNP Paribas submitted claims to the USDA for the resulting losses.

On Jan. 20, 2012, Cruz pleaded guilty to conspiracy to commit bank fraud, mail fraud and wire fraud, and conspiracy to commit money laundering.

“I would like to thank the Department of Justice and the USDA General Counsel’s office for their collaboration in recovering $80 million under this judgment,” said Administrator of USDA’s Foreign Agricultural Service Phil Karsting. “This illustrates the importance USDA and this administration places on protecting the integrity of our programs.”

The resolution of this matter was the result of a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the USDA, the USDA Office of Inspector General, the U.S. Postal Inspection Service and the Internal Revenue Service Criminal Investigation.

The lawsuit is captioned United States v. BNP Paribas SA, et al., No. 4:11 cv 3718 (S.D. Tex.).

Three defendants were arrested today on charges of providing material support to al-Shabaab, a designated foreign terrorist organization that is conducting a violent insurgency campaign in Somalia. Two additional defendants are fugitives in Kenya and Somalia.

Assistant Attorney General John P. Carlin of the Justice Department’s National Security Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, Assistant Director in Charge Valerie Parlave of the FBI’s Washington, D.C. Field Office and Special Agent in Charge Frank Montoya, Jr. of the FBI’s Seattle Field Office, made the announcement.

A superseding indictment was issued on June 26, 2014, by a federal grand jury in the Eastern District of Virginia, charging the defendants with one count of conspiracy to provide material support to a foreign terrorist organization and 20 counts of providing material support to a foreign terrorist organization. The indictment was unsealed after the following arrest warrants were executed today: Muna Osman Jama , 34, was arrested at her home in Reston, Virginia; Hinda Osman Dhirane , 44, was arrested at her home in Kent, Washington; Farhia Hassan was arrested at her residence in the Netherlands; Fardowsa Jama Mohamed is a fugitive in Kenya and the subject of a pending arrest warrant; and
Barira Hassan Abdullahi is a fugitive in Somalia and the subject of a pending arrest warrant.

If convicted, each defendant faces a maximum penalty of 15 years in prison on each count in the indictment.

The Harakat Shabaab al-Mujahidin, commonly known as al-Shabaab, is a terrorist group conducting a violent insurgency campaign in Somalia. In 2008, the U.S. government designated al-Shabaab as a foreign terrorist organization, and in February 2012, the leaders of al-Shabaab and the terrorist group al-Qa’ida publicly announced the merger of the two groups.

According to court records, defendants Muna Osman Jama and Hinda Osman Dhirane were the leaders of an al-Shabaab fundraising conspiracy operating in the United States, Kenya, the Netherlands, Somalia and elsewhere. Jama and Dhirane allegedly directed a network composed primarily of women who provided monthly payments that were coordinated, facilitated and tracked by the defendants to their conduits in Kenya and Somalia. According to court records, Jama was principally responsible for sending money to Kenya through her conduit, defendant Fardowsa Jama Mohamed, while Dhirane was primarily responsible for sending money to Somalia through her conduit, defendant Barira Hassan Abdullahi.

According to court records, the defendants would refer to the money they sent overseas as “living expenses,” and they repeatedly used code words such as “orphans” and “brothers in the mountains” to refer to al-Shabaab fighters, and “camels” to refer to trucks needed by al-Shabaab. The money transfers often were broken down into small amounts as low as $50 or $100, and the funds were intended for use by al-Shabaab insurgents operating in Somalia.

This case was investigated bythe FBI’s Washington, D.C. and Seattle Field Offices. The Justice Department’s Office of International Affairs also played an essential role in coordinating the arrests and searches with foreign authorities.

Assistant U.S. Attorney James P. Gillis and Trial Attorney Danya E. Atiyeh of the Counterterrorism Section of the Justice Department’s National Security Division are prosecuting the case in the Eastern District of Virginia. The U.S. Attorney’s Office in Seattle also provided assistance.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

A Miami resident who owned a home health care company and was the administrator of another home health care company pleaded guilty today for her participation in a $74 million Medicare fraud scheme.

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

Elsa Ruiz, 45, pleaded guilty today before U.S. District Judge Marcia G. Cooke in the Southern District of Florida to one count of conspiracy to commit health care fraud. Her sentencing is scheduled for Oct. 8, 2014.

According to court documents, Ruiz was an owner of Professional Home Care Solutions Inc. (Professional Home Care) and an administrator of LTC Professional Consultants Inc. (LTC), Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries. Ruiz and her co-conspirators operated LTC and Professional Home Care for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.

Also according to court documents, Ruiz ran and oversaw the schemes operating out of LTC and Professional Home Care. Ruiz and co-conspirators paid kickbacks and bribes to patient recruiters, who provided patients to LTC and Professional Home Care , as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries. Ruiz and her co-conspirators used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for unnecessary home health care and therapy services.

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

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

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 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 .

ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), and JOSEPH QUITANO, National Security Specialist for the U.S. Attorney's Office (USAO), were invited to speak at the Armed Forces Communications and Electronics Association (AFCEA) Marianas TECH NET 2014 Conference, held on April22-25, 2014, in Guam.  The AFCEA is an international organization "dedicated to increasing knowledge through the exploration of issues relevant to its members in information technology, communications, and electronics for the defense, homeland security and intelligence communities."

U.S. Attorney Limtiaco spoke about the mission of the USAO, which is "to enforce the law and defend the interests of the United States according to the law; to ensure public safety against threats foreign and domestic; to provide federal leadership in preventing and controlling crime; to seek just punishment for those guilty of unlawful behavior; and to ensure fair and impartial administration of justice for all Americans." She explained that there are 42 separate components of the Department of Justice and provided information on the roles of the agencies, including the United States Attorneys, who prosecute offenders and represent the United States government in court; the National Security Division, which coordinates the Department's highest priority of combating terrorism and protecting national security; the major investigative agencies - the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives - which prevent and deter crime and arrest criminal suspects; the United States Marshals Service, which protects the federal judiciary, apprehends fugitives, and detains persons in federal custody; and the Federal Bureau of Prisons, which confines convicted offenders.

U.S. Attorney Limtiaco also expounded on the United States Attorney General's priority goals, which are to detect and prevent terrorism; prosecute violent crime; combat computer crime, especially child pornography, obscenity, and intellectual property theft; prevent and prosecute illegal drugs; combat corporate and public corruption; and promote civil rights and civil liberties.

National Security Specialist Joe Quitano discussed regional security issues relevant to the national security of the United States.  National Security Specialist Quitano also spoke about the Department of Justice's past and current prosecutions involving threats of terrorism to federal, state, and local levels and threats of Weapons of Mass Destruction (WMDs).  In addition, he presented information on important elements that make up the country’s national security, current events that affect national security, information specific to Guam and the Northern Mariana Islands' vital role in contributing to national security, and tips on what citizens can do to help prevent threats of terrorism.

The following are photographs of U.S. Attorney Limtiaco and National Security Specialist
Joe Quitano giving remarks at the AFCEA Marianas TECH NET 2014 Conference:

The United States has intervened in a law suit against Symantec Corporation, alleging that Symantec submitted false claims to the United States on a General Services Administration (GSA) software contract, the Justice Department announced today. Symantec is a Fortune 500 company located in Mountain View, California, and it sells a variety of computer security products.

“This lawsuit demonstrates the government’s commitment to ensuring that the companies it does business with act with integrity,” said Assistant Attorney General Stuart Delery for the Department of Justice’s Civil Division. “When the United States spends taxpayer dollars based on contractors’ representations about their business practices, we expect to be given complete and accurate information.”

In 2007, Symantec entered into a Multiple Award Schedule contract with GSA that allowed Symantec to sell software and related items directly to federal purchasers. The case alleges that Symantec knowingly provided the United States with inaccurate and incomplete information about the prices it was offering to its commercial customers during the negotiation and performance of the contract. GSA used Symantec’s disclosures about its commercial sales practices to negotiate the minimum discounts Symantec was required to provide government agencies that bought Symantec software. In addition, the contract required Symantec to update GSA when commercial discounts improved and extend the same improved discounts to government purchasers. The suit contends that Symantec misrepresented its true commercial sales practices, ultimately leading to government customers receiving discounts far inferior to those Symantec gave to its commercial non-government customers. The contract at issue was in place from 2007 to 2012 and involved hundreds of millions of dollars in sales.

“When doing business with the government, honesty and transparency are essential,” said U.S. Attorney Ronald C. Machen Jr. for the District of Columbia. “We are committed to ensuring that contractors who do business with the federal government provide honest services, prices and products. We will continue to work with relators and federal investigators to protect federal taxpayer money.”

“Contractors cannot provide GSA with inaccurate and incomplete pricing data,” said GSA Acting Inspector General Robert C. Erickson. “American taxpayers deserve a fair deal.”

The suit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for the submission of false claims for government funds and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in this case. The lawsuit is pending in the District of Columbia.

This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Columbia and GSA’s Office of Inspector General .

The case is captioned United States ex rel. Morsell v. Symantec Corp. , No. 12cv00800 (D.D.C.). The claims asserted against Symantec are allegations only; there has been no determination of liability.

WASHINGTON—The Department of Justice released the following statement Tuesday from spokesperson Emily Pierce regarding the ruling in the case of King v. Burwell by the Fourth Circuit Court of Appeals and the ruling by the D.C. Circuit Court of Appeals in the case of Halbig v. Burwell:

“Today, the Fourth Circuit unanimously ruled in support of Congressional intent and common sense: that an American may receive tax credits to make health care more affordable regardless of whether they are participating in a state-run or a federally-facilitated marketplace. While two appeals judges ruled differently, four appeals judges have now cast their votes with two lower courts, Congress, and the Affordable Care Act. In the meantime, to be clear, people getting premium tax credits should know that nothing has changed, tax credits remain available.”

As part of his My Brother’s Keeper initiative, President Obama announced new AmeriCorps partnerships with federal agencies and the private sector to connect young people to mentoring, support networks and job skills to help them reach their full potential.

Monday’s announcement altogether represents a total of $24 million in investments in national service. The Departments of Justice and Agriculture (USDA) are joining with the Corporation for National and Community Service (CNCS) to launch new AmeriCorps programs and partnerships that total up to $14 million over three years. Private sector commitments from AT&T and Citi Foundation will support additional AmeriCorps service opportunities that provide young people with skills and supports to successfully enter the workforce.

“America’s future will be defined, and our progress determined, by the doors we open and the support we offer to young people across the nation,” said Attorney General Eric Holder. “My Brother’s Keeper, and innovative initiatives like this one, must be a central part of this work. By involving young people in service projects and offering them the benefits of mentorship – through programs like AmeriCorps – we can help our kids mature into responsible, confident, and productive young adults. And we can do our part to ensure that every child, from every background, has the tools they need to learn, to grow, to thrive – and to lead.”

CNCS and the Department of Justice’s Office of Juvenile Justice and Delinquency Prevention (OJJDP) are jointly funding Youth Opportunity AmeriCorps . The program, which totals up to $10 million over three years, will enroll disconnected youth in national service programs as AmeriCorps members. It includes a mentorship component that will provide critical mentoring support to the AmeriCorps members.

USDA and CNCS have joined in a landmark new partnership between AmeriCorps and the USDA’s Forest Service that connects youth and veterans with service opportunities to restore the nation’s forests and grasslands. The $3.8 million in joint funding will provide resources for both AmeriCorps grantees and member organizations of the 21 st Century Conservation Service Corps (21CSC), and will also provide for 300 new AmeriCorps members serving in U.S. forests and grasslands.

The commitments announced today support the My Brother’s Keeper initiative by increasing entry-level job, mentorship and apprenticeship options for all young people, including boys and young men of color. They also advance the goals of the President’s Task Force on Expanding National Service , which calls for new public-private partnerships that use national service to help solve our nation’s most pressing challenges.

“As a nation, there is much more we can do to help our young people stay on track and reach their full potential in life,” said CEO of CNCS Wendy Spencer. “AmeriCorps is a proven pathway to opportunity that provides skills, leadership, and college support for young people. We are thrilled to join with our federal and corporate partners to launch new AmeriCorps programs that will put hundreds of young people on a path to success in school and life.”

“This landmark partnership between the Forest Service and USDA with AmeriCorps and the Corporation for National and Community Service provides youth and veterans with new job skills while helping to restore America's forests and grasslands,” said U.S. Secretary of Agriculture Tom Vilsack. “The administration's continued support for the 21 st Century Conservation Service Corps furthers President Obama's goals of expanding economic opportunity, creating new ways to engage in service projects, and reconnecting Americans to the great outdoors.”

In addition to new federal partnerships, the White House announced additional AmeriCorps commitments from the private sector to support the goals of My Brother’s Keeper. AT&T is launching the Aspire Mentoring Academy Corps , powered by AmeriCorps, AT&T and MENTOR: The National Mentoring Partnership. The program will engage AmeriCorps members in regions around the country and engage thousands of youth from underserved communities in mentoring activities.

“Research shows that the presence of a mentor in a young person’s life significantly improves their potential for success,” said AT&T Chairman and CEO Randall Stephenson. “That’s why I and many of our employees are currently mentoring students across the country.”

Citi Foundation is making a three-year, $10 million commitment to create ServiceWorks , a groundbreaking national program powered by AmeriCorps and Points of Light that uses volunteer service to help 25,000 young people in 10 cities across the United States develop the skills they need to prepare for college and careers. The program, which will deploy 225 AmeriCorps VISTA members over three years, will engage youth ages 16-24 in service and build a large-scale volunteer response to the crisis of low college and career attainment. The young people will receive training in critical 21 st century leadership and workplace skills, the chance to build their networks and connections to their communities, and the opportunity to use their new skills by participating in and leading volunteer service projects.

AmeriCorps members serving in these programs, most of whom will be youth from underserved communities, will earn education scholarships to help pay for college or repay their student loans – putting them on track for greater economic opportunity in the future.

On Feb. 27, 2014, President Obama launched the My Brother’s Keeper initiative to address persistent opportunity gaps faced by boys and young men of color and to ensure that all young people can reach their full potential. The president’s My Brother’s Keeper Federal Task Force released a 90-day report on May 30, which identified starting points for what will be an enduring effort at improving the life outcomes for our youth, including boys and young men of color.

As part of this effort, CNCS joined joining with other federal agencies and nonprofit organizations to launch a campaign to recruit individuals to serve as mentors to boys and young men of color across the country. The United We Serve website includes a database of mentoring opportunities searchable by zip code.

U.S. District Court Judge Paul W. Grimm sentenced Jean Claude Roy, aka Dredd the Don, 31, of Germantown, Maryland, to serve 240 months in prison to be followed by 10 years of supervised release, the Justice Department announced today. A jury convicted Roy on March 19, 2014, of conspiracy to commit sex trafficking by force, fraud and coercion, three counts of interstate transportation for the purpose of prostitution, and one count of witness and evidence tampering.

“The Civil Rights Division is committed to pursuing justice on behalf of vulnerable members of our society,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “This sentence sends a clear message that the United States will not tolerate modern-day slavery and will work tirelessly to restore the rights and dignity of its victims.”

During the trial, victims recounted their fear of Roy, explaining instances of physical and sexual abuse, threats, tattoo branding and Roy’s bragging of beating a murder charge years prior in Massachusetts. “If he could kill a man, who’s gonna care about a prostitute,” said one victim from the witness stand. Witnesses detailed the guns in Roy’s possession and how he prostituted women in Maryland, Virginia and North Carolina.

“Jean Claude Roy preyed on vulnerable young women,” said U.S. Attorney Rod J. Rosenstein for the District of Maryland. “Law enforcement agencies will continue to work to identify and prosecute human traffickers.”

“This case serves as another chilling example of the callous disregard for human life demonstrated by traffickers,” said U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigation’s (HSI) Baltimore Deputy Special Agent in Charge James P. Nagle. “Our special agents will continue pursuing these criminals to ensure they are behind bars where they can no longer exploit the innocent.”

Trial evidence also showed that from Jan. 1 through Jan. 10, 2013, while Roy was in jail on related state charges, he called a family member several times and had that person access online accounts and storage services belonging to Roy and his co-conspirator in order to erase evidence related to these charges.

The jury acquitted Roy of one count of sex trafficking and two counts of attempted sex trafficking by force, fraud and coercion, and for the related counts of brandishing a firearm during a crime of violence.

This case was investigated by the Maryland Human Trafficking Task Force, which was formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit the task force website.

Report suspected instances of human trafficking to ICE HSI’s tip line at 866-DHS-2ICE (1-866-347-2423) or by completing its online tip form. Both are staffed around the clock by investigators.

This case was investigated by ICE HSI Baltimore and the Montgomery County Police Department. Assistant U.S. Attorney Kristi N. O’Malley and Trial Attorney William E. Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit prosecuted the case.

The Department of Justice Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey will announce the results and next steps following its investigation into the Newark Police TODAY, TUESDAY, JULY 22, 2014, at 12:00 p.m. EDT, at the Newark office of the U.S. Attorney for the District of New Jersey. The investigation, opened in May 2011, looked at allegations of use of excessive force and discriminatory policing among other issues.

WHO: Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels, U.S. Attorney Paul J. Fishman for the District of New Jersey, Newark Mayor Ras Baraka, and Newark Police Director Eugene Venable

WHAT: Press Conference to announce results of the Justice Department’s investigation into the Newark Police Department

WHEN: TUESDAY, JULY 22, 2014, at 12:00 p.m. EDT

WHERE: U.S. Attorney’s Office for the District of New Jersey970 Broad Street, Seventh Floor, Newark, New Jersey, OPEN PRESS

NOTE: All media must present government-issued photo I.D. (such as driver’s license) as well as valid media credentials. Press inquiries regarding logistics should be directed to Rebekah Carmichael or Matt Reilly at 973-645-2888 or Rebekah.Carmichael@usdoj.gov.

The Justice Department today announced it has reached an agreement with the city of Newark, New Jersey, to address a pattern and practice of unconstitutional policing by the Newark Police Department (NPD). The agreement follows a joint investigation by the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey, the results of which were also released today.

The findings, detailed in a report provided to the city and to NPD leadership, document the NPD’s pattern or practice of constitutional violations in its stop and arrest practices; its response to individuals exercising their rights under the First Amendment; its use of force; and through theft by officers. The investigation also revealed deficiencies in NPD systems that are designed to prevent and detect misconduct.

The city of Newark cooperated with the investigation, which began on May 9, 2011, and has agreed to enter into a court-enforceable, independently monitored agreement to reform the NPD to ensure constitutional policing. The terms of the agreement are outlined in the agreement in principle released today. Among other things, the NPD must continue to develop and implement improvements to its stop, arrest and force policies and procedures, and to train its officers on how to conduct effective and constitutional policing. The NPD also must implement systems that ensure accountability, commit to building police-community partnerships and improve the quality of policing throughout the city.

“Our investigation uncovered troubling patterns in stops, arrests and use of force by the police in Newark. With this agreement, we’re taking decisive action to address potential discrimination and end unconstitutional conduct by those who are sworn to serve their fellow citizens,” said Attorney General Eric Holder. “This action reaffirms the Justice Department’s commitment to working with our law enforcement partners in order to ensure the highest standards of integrity and professionalism. Under today’s agreement, Newark police officials are taking the first in a series of important steps to restore public trust in their department and ensure both the safety and the civil rights of Newark residents.”

“Today the city of Newark has taken a bold step toward ensuring constitutional policing that better serves all of Newark’s residents,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels. “The Department of Justice report released today makes clear the depth and breadth of the challenges Newark faces in reforming its police department; but the agreement in principle provides a roadmap for reform and underscores the shared determination of the city of Newark and the Department of Justice to making this reform real and sustainable.”

“The people of Newark deserve to be safe, and so do the thousands who come here to work, to learn, and to take advantage of all the city has to offer,” said U.S. Attorney Fishman. “They also need to know the police protecting them are doing that important – and often dangerous – work while respecting their constitutional rights. The Justice Department has a long history of making sure of that, and today we have the commitment of Newark's mayor and the leadership of the police department to make the department the one that the city deserves.”

During the investigation, the Justice Department reviewed thousands of NPD documents, including written policies and procedures, documentation of stops, searches and arrests, internal investigation files and use of force reports and reviews. Attorneys and investigators also interviewed NPD officers, supervisors and command staff, as well as city officials, and met with hundreds of community members and local advocates.

As the report describes, the Justice Department found reasonable cause to believe that the NPD has engaged in a pattern or practice of unconstitutional stops in violation of the Fourth Amendment. Specifically, NPD officers failed to articulate sufficient justification for nearly 75 percent of pedestrian stops. NPD officers also disproportionately stopped black people relative to their representation in Newark’s population. Although the NPD’s reports were insufficient to allow the Justice Department to determine whether this disparity was the result of intentional discrimination or was otherwise unlawful, the report urges the city of Newark and NPD to improve its collection and analysis of its stop, search and arrest data to facilitate a more thorough analysis of the racial and ethnic impacts of NPD’s police practices and to take steps to eliminate avoidable disparities.

Through the course of the investigation, the Justice Department also found that NPD officers have detained and arrested individuals who lawfully objected to police actions or behaved in a way that officers perceived as disrespectful, in violation of the First Amendment.

In addition, the Justice Department found cause to believe that the NPD engaged in a pattern or practice of the use of excessive force. The NPD has been unable to make reliable conclusions about whether a particular use of force was reasonable due to substantial underreporting and inadequate investigation of the use of force by NPD officers. Nonetheless, of the incidents reviewed as part of the Justice Department’s investigation, more than 20 percent of NPD officers reported use of force that appeared unreasonable.

The investigation also found a pattern or practice of theft of citizens’ property by NPD officers in violation of the Fourth and 14 th Amendments, including by officers in NPD’s specialized units, such as the narcotics and gang units, and at NPD’s prisoner processing unit.

The Justice Department’s report details other inadequacies that contributed to a pattern of constitutional violations. Deficiencies were found in Internal Affairs (IA) processes, in investigations reviewing use of force and complaints regarding officer misconduct, in supervision and management, and in the training of officers and IA investigators.

The Justice Department conducted its investigation jointly through the Special Litigation Section of the Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey, with the assistance of law enforcement and statistics experts.

Both the report and the agreement in principle, along with summaries of each, will be available on the Civil Rights Division website .

James Kalbflesh, a former correctional officer at the Roxbury Correctional Institution (RCI) in Hagerstown, Maryland, was sentenced today in connection with the March 9, 2008, assault of Kenneth Davis, an inmate. U.S. District Judge James K. Bredar sentenced Kalbflesh to serve 60 months in prison.

Kalbflesh was found guilty by a federal jury of conspiracy against rights, deprivation of rights under color of law and conspiracy to obstruct justice. Evidence at trial and in court documents filed in connection with his convictions established that Kalbflesh and other officers at RCI met during the midnight shift and agreed to assault Davis in retaliation for a prior incident involving Davis and another officer. Kalbflesh and other officers then entered Davis’ cell and assaulted him.

Davis was also subjected to retaliatory assaults by officers from the preceding and following shifts. Davis suffered facial fractures, a broken rib and fractured vertebrae, among other injuries, as a result of the series of assaults. The assaults by Kalbflesh and other RCI officers resulted in serious injuries that left Davis unrecognizable. Kalbflesh is the last remaining officer to be sentenced in the related RCI cases.

“Sixteen former correctional officers from RCI have been convicted and sentenced for their involvement in the series of beatings of an inmate, and in the coordinated cover-ups that followed each assault,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “These officers betrayed the public trust by using their official positions to commit violent civil rights abuses and then tried to cover up their crimes. The Department of Justice will continue to prosecute vigorously correctional officers who use their power to violate federal law.”

The case was investigated by the Frederick Resident Agency of the FBI, and prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Civil Rights Division.

Nathan Stoliar, 64, of Australia, pleaded guilty in federal court in Las Vegas today to five felonies for his role in multiple schemes, worth in excess of $41 million, to generate fraudulent biodiesel credits and to export biodiesel without providing biodiesel credits to the United States as required by law.

Stoliar and another defendant had been charged in January 2014 in a 57-count indictment alleging conspiracy, wire fraud, false statements under the Clean Air Act, obstruction of justice and conspiracy to engage in money laundering. Following his indictment, Stoliar’s arrest was sought by the United States. Located in Poland, Stoliar returned in early February to the United States to surrender for arrest. Stoliar pleaded guilty Tuesday to one count of conspiracy, one count of conspiracy to engage in money laundering, two counts of wire fraud and one count of making false statements under the Clean Air Act. Stoliar is required by the plea to forfeit $4 million and pay $1 million in restitution. He faces a maximum sentence of 20 years in prison and a $500,000 fine for each count of conspiracy to engage in money laundering and wire fraud, five years in prison and a $250,000 fine for conspiracy, and two years in prison and a $250,000 fine for making false statements under the Clean Air Act.

“Stoliar and his co-conspirator perpetrated a massive fraud against a renewable fuels program created to protect our nation’s energy security and independence,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The Justice Department will continue to pursue fraudsters at home and abroad and protect the integrity of federal programs as it protects the environment.”

“By rooting out fraud, EPA is committed to achieving the environmental goals that Congress envisioned when it created the Renewable Fuel Standard,” said Cynthia Giles, the U.S. Environmental Protection Agency’s (EPA) Assistant Administrator for Enforcement and Compliance Assurance. “This case, like other recent ones, supports legitimate businesses and makes clear to potential violators that EPA and its partners will fight to protect the program’s integrity.”

“With this guilty plea, the defendant admitted that he participated in a conspiracy to defraud the United States government, specifically the EPA, and that he personally gained more than $7 million from the scheme,” said U.S. Attorney Dan Bogden for the District of Nevada. “These types of schemes are complex and require an enormous expenditure of resources to investigate and prosecute. Because of the tremendous work of the investigators and prosecutors on this case, we were also able to seize and forfeit from the defendant millions of dollars from bank accounts, as well as real property in Nevada and California, jewelry and other assets.”

The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production and use of renewable fuels such as biodiesel in the United States. Biodiesel producers and importers can generate and attach credits known as “renewable identification numbers,” or RINs. to the gallons of biodiesel they produce or import. Because certain companies (such as companies that sell transportation fuel in the United States) need RINs to comply with regulatory obligations, RINs have significant market value. They are routinely bought and sold in the marketplace. In addition, to ensure that RINs are generated for renewable fuel used only in the United States, and in order to create an incentive for biodiesel in the United States to be used here, anyone who exports biodiesel is required to obtain these valuable RINs for all exported gallons and provide the RINs to EPA.

Stoliar admitted that beginning around September of 2009, he and co-defendant James Jariv operated and controlled a company -- City Farm Biofuel in Vancouver, British Columbia, Canada -- that represented itself as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. Stoliar and Jariv also formed a company called Canada Feedstock Supply – that represented itself as City Farm’s supplier of feedstocks necessary to produce biodiesel. Jariv operated and controlled a company based in Las Vegas called Global E Marketing (GEM). Using these three and other closely-held companies, Stoliar and his codefendants claimed to produce biodiesel at the City Farm facility and to import and sell biodiesel to GEM, and then generated and sold RINs based upon this claimed production, sale and importation. In reality, no biodiesel produced at City Farm was ever imported and sold to GEM as claimed. Stoliar and his codefendants used GEM to claim to blend the biodiesel with petroleum diesel, allowing them to sell the RINs separately from any actual biodiesel. Using this scheme, Stoliar and his co-defendants falsely claimed to import, purchase and blend more than 4.2 million gallons of biodiesel. They then sold the RINs, and fraudulently generated more than $7 million.

The indictment also alleges that, beginning around the same time period and continuing through Dec. 31, 2013, Stoliar and Jariv, using their company MJ Biodfuel, bought over 23 million gallons of RIN-less biodiesel that had been blended with small amounts of petroleum diesel to form B-99. The defendants bought the B-99 from unrelated companies in the United States, and this B-99 had been used by other companies to generate and separate RINs from the fuel. Because B-99 cannot be used to again generate a RIN, and because it cannot be used for other tax-related incentives, B-99 sells for substantially less than 100 percent biodiesel (known as B-100). Stoliar sold some of this biodiesel to purchasers in the United States, claiming it was B-100 produced at the City Farm facility and imported into the United States. By claiming this biodiesel was B-100 and not RIN-less B-99, Stoliar marketed the fuel as eligible to be used by purchasers to generate credits and incentives, and Stoliar was able to sell the fuel for as much as $2.30 per gallon more than he otherwise would have been able.

Stoliar and his co-defendants also exported significant amounts of the RIN-less B-99 they bought in the United States to Canada. Stoliar then sold the biodiesel in Canada, and conspired with his co-defendants to not acquire and provide RINs to the United States for these exports as they were required to do by law. In doing so, Stoliar and Jariv failed to give to the United States RINs worth in excess of $34 million, keeping this money for themselves instead.

Finally, Stoliar and Jariv conspired to launder the proceeds of their crimes, utilizing foreign banking institutions and complex financial transactions to promote their illegal schemes and distribute the proceeds of their crimes. Accounts were utilized in Canada, Nevada and Australia, and transactions between the defendants’ closely-held companies were described as other legitimate transactions involving biodiesel, when in reality they were not.

Sentencing for Stoliar has been set for Oct. 30,2014 in Las Vegas, Nevada. The investigation that led to today’s plea was the result of collaborative work by the EPA’s Criminal Investigation Division and the FBI, with assistance from the United States Secret Service, the Internal Revenue Service-Criminal Investigations and the Department of Homeland Security.

The case is being prosecuted by Assistant Chief Wayne D. Hettenbach of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division , Assistant U.S. Attorney’s Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s Office in Nevada, and Assistant Deputy Chief Darrin L. McCullough of the Justice Department’s Criminal Division, Asset Forfeiture and Money Laundering Section, with the assistance of the Justice Department’s Office of International Affairs and the United States Attorney’s Office for the Southern District of Texas .

An unlicensed trader who solicited $500,000 from undercover FBI agents to invest in a fraudulent high yield investment program pleaded guilty today in federal court in Los Angeles.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Bill Lewis of the FBI’s Los Angeles Field Office made the announcement.

Jessie Tolbert, 38, of Bastrop, Louisiana, pleaded guilty today to one count of conspiracy to commit wire fraud and one count of wire fraud. He is scheduled to be sentenced on Oct. 20, 2014.

According to court documents, in December 2011, Tolbert and his co-conspirators, including Eriq Brye and Greg Preston, placed an advertisement online for an investment opportunity. Undercover federal agents responded to this advertisement. During several weeks of email and telephone communications, Tolbert and his co-conspirators informed the agents that a spot recently had opened up on a high yield investment program they purportedly were running and that a $500,000 investment in their program would generate $30 million in 30 days. Tolbert did not actually run an investment program.

In an effort to induce the undercover agents to invest in the program, Tolbert and his co-conspirators made numerous material misrepresentations. Specifically, Tolbert falsely and repeatedly guaranteed the success of the proposed trade based on his purported past success in generating similar returns in comparable trades, as well as his success in other investments in the financial industry. Tolbert had never applied for, nor received, a license with any federal agency related to the financial industry.

Brye is a fugitive. Preston pleaded guilty in May 2013 for conduct including his role in this investment scheme. He is scheduled to be sentenced on December 19, 2014.

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

This case was investigated by the FBI and prosecuted by Assistant Chief Benton Curtis and Trial Attorneys Kyle Maurer and Alex Porter of the Criminal Division’s Fraud Section.

Three federal indictments were unsealed today in the Northern District of Georgia charging six members of three different piracy groups – Appbucket, Applanet and SnappzMarket – for their roles in the illegal distribution of copies of copyrighted Android mobile device applications, or “apps,” announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia, and Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office.

Two members of the SnappzMarket Group – Joshua Ryan Taylor, 24, of Kentwood, Michigan, and Scott Walton, 28, of Cleveland, Ohio – were arrested today. Taylor will appear before U.S. Magistrate Judge Ellen S. Carmody in Grand Rapids, Michigan, and Walton will appear before U.S. Magistrate Judge William H. Baughman, Jr. in Cleveland, Ohio.

“As a result of their criminal efforts to make money by ripping off the hard work and creativity of high-tech innovators, the defendants are charged with illegally distributing copyrighted apps,” said Assistant Attorney General Caldwell. “The Criminal Division is determined to protect the labor and ingenuity of copyright owners and to keep pace with criminals in the modern, technological marketplace.”

“Copyright infringement discourages smart people from doing innovative things,” said U.S. Attorney Yates. “This problem is especially acute when it comes to rapidly developing technologies, like apps for smart phones, and these defendants are now being held accountable for the intellectual property they stole.”

“Today’s federal indictments are the direct result of an extensive and thorough federal investigation into three groups of individuals aggressively engaged in and profiting from the theft of intellectual property,” said Special Agent in Charge Johnson. “While copyright infringement is the direct theft of the hard work of others in the form of research and development expended, it can also negatively impact incentives for further or future development of those ideas or applications. The FBI will continue to provide significant investigative resources toward such groups engaged in such wholesale pirating or copyright violations as seen here.”

An indictment returned on June 17, 2014, by a grand jury in the Northern District of Georgia charges Gary Edwin Sharp II, 26, of Uxbridge, Massachusetts, along with Taylor and Walton, with one count of conspiracy to commit criminal copyright infringement, and also charges Sharp with two counts of criminal copyright infringement. According to the indictment, Sharp, Taylor and Walton identified themselves as members of the SnappzMarket Group. From May 2011 through August 2012, they conspired with Kody Jon Peterson, 22, of Clermont, Florida, and other members of the SnappzMarket Group to reproduce and distribute over one million copies of copyrighted Android mobile device apps, with a total retail value of over $1.7 million, through the SnappzMarket alternative online market without permission from the copyright owners of the apps, who would otherwise sell copies of the apps on legitimate online markets for a fee. A separate information filed on Jan. 23, 2014 charged Peterson with one count of conspiracy to commit criminal copyright infringement, and he pleaded guilty on April 14, 2014.

An indictment returned on June 17, 2014, by a grand jury in the Northern District of Georgia charged James Blocker, 36, of Rowlett, Texas, with one count of conspiracy to commit criminal copyright infringement. According to the indictment, he and his fellow conspirators identified themselves as members of the Appbucket Group. From August 2010 to August 2012, Blocker conspired with Thomas Allen Dye, 21, of Jacksonville, Florida; Nicholas Anthony Narbone, 26, of Orlando, Florida; Thomas Pace, 38, of Oregon City, Oregon; and other members of the Appbucket Group to reproduce and distribute over one million copies of copyrighted Android mobile device apps, with a total retail value of over $700,000, through the Appbucket alternative online market without permission from the copyright owners of the apps, who would otherwise sell copies of the apps on legitimate online markets for a fee. A separate information filed on Jan. 24, 2014 charged Dye, Narbone, and Pace with one count of conspiracy to commit criminal copyright infringement. Dye, Narbone and Pace pleaded guilty to the charged conspiracy on March 10, 2014, March 24, 2014 and April 15, 2014, respectively.

An indictment returned on June 17, 2014, by a grand jury in the Northern District of Georgia charges Aaron Blake Buckley, 20, of Moss Point, Mississippi; David Lee, 29, of Chino Hills, California; and Sharp with one count of conspiracy to commit criminal copyright infringement, and also charges Lee with one count of aiding and abetting criminal copyright infringement and Buckley with one count of criminal copyright infringement. According to the indictment, Buckley, Lee, and Sharp identified themselves as members of the Applanet Group. From May 2010 through August 2012, they conspired with other members of the Applanet Group to reproduce and distribute over 4,000,000 copies of copyrighted Android mobile device apps, with a total retail value of over $17 million, through the Applanet alternative online market without permission from the copyright owners of the apps, who would otherwise sell copies of the apps on legitimate online markets for a fee.

The indictments charge leading members of the SnappzMarket Group, the Appbucket Group, and the Applanet Group with renting computer servers to host websites such as www.snappzmarket.com , www.appbucket.net , and www.applanet.net , respectively, to provide digital storage for the pirated copies of copyrighted Android apps that each group distributed to their members or subscribers. On Aug. 21, 2012, seizure orders were executed against these three website domain names for the illegal distribution of copies of copyrighted Android mobile device apps – the first time website domains involving mobile device app marketplaces have been seized.

Charges contained in an indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the FBI. Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher Bly of the Northern District of Georgia are prosecuting the case, with the assistance of Assistant U.S. Attorney Brian M. Pearce of the Northern District of Georgia. The Office of International Affairs provided assistance in the matter. Significant assistance in the case has also been provided by the CCIPS Cybercrime Lab.

The United States has asked a federal court in Los Angeles to bar Elton L. Barnes Jr. from preparing tax returns for others, the Justice Department announced today.

In 2002, Barnes pleaded guilty to aiding and assisting in the preparation of false tax returns, but he resumed preparing returns when he was released from prison, the government alleges. Since then, according to the complaint, Barnes has repeatedly prepared federal income tax returns, sometimes working under the names McNair Group, So Cal Financial Services and Anderson Investment Group, with fraudulent claims such as falsely inflated charitable contribution deductions and losses from imaginary home businesses. The complaint further alleges that Barnes has prepared returns that intentionally overstate the amount of federal income tax that has been withheld from his clients’ paychecks in order to claim a larger refund.

According to the complaint, the Internal Revenue Service (IRS) has chosen to audit more than 180 tax returns that Barnes prepared and that have been filed since his release from prison in 2009. The complaint also alleges that, although it has not completed its audits of all those returns, the IRS has already identified almost $2 million in false refund claims and understatements of taxes owed.

The complaint also alleges that Barnes met with a customer and obtained the customer’s personal identifying information, including his name, address and social security number. Allegedly, without the customer’s knowledge, Barnes then used the customer’s information to file a tax return that directed the IRS to deposit the claimed tax refund into Barnes’ bank account. The United States has identified more than 50 tax refunds that were deposited into bank accounts Barnes controls, although some deposits may have been made with the knowledge of Barnes’ clients. It is against federal law for a tax return preparer to deposit a client’s tax refund into his own bank account. According to the complaint, Barnes violated other laws that apply to return preparers by failing to sign returns he prepared or use his preparer tax identification number on them.

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

Related Materials:

United States v. Elton L. Barnes Jr.
United States Complaint for Permanent Injunctive Relief

A federal jury in Boston has convicted a friend of alleged Boston Marathon bomber, Dzhokhar Tsarnaev, for impeding the bombing investigation.

Assistant Attorney General John P. Carlin of the Justice Department’s National Security Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Agent in Charge Vincent B. Lisi of the FBI’s Boston Field Division, made the announcement today.

The jury found Azamat Tazhayakov, 20, guilty of conspiring to obstruct justice and obstructing justice with the intent to impede the Boston Marathon bombing investigation. U.S. District Judge Douglas P. Woodlock scheduled sentencing for October 16, 2014.

In August 2013, Tazhayakov was indicted for obstructing a terrorism investigation. Tazhayakov is a national of Kazakhstan who was temporarily living in the United States on a student visa while attending the University of Massachusetts Dartmouth, but at the time of his arrest his visa had been revoked.

The evidence at trial proved that on April 18, 2013, after the release of photographs of the two men suspected of carrying out the Marathon bombings (who were later identified as Tamerlan Tsarnaev and Dzhokhar Tsarnaev), Tazhayakov and others went to Tsarnaev’s dormitory room and found items that linked Tsarnaev to the bombing, including fireworks from which “gunpowder” appeared to have been removed and a jar of Vaseline that they believed could be used to make bombs. A forensic examiner testified that Vaseline can be used to make improvised explosive devices. A month before the bombing, Tsarnaev had told Tazhayakov that it would be good to die as shaheed (martyr) and that he knew how to build a bomb. Tsarnaev also identified specific ingredients one could use to make a bomb, including “gunpowder.”

After searching Tsarnaev’s dormitory room on the evening of April 18, 2013, Tazhayakov helped remove Tsarnaev’s laptop and a backpack containing fireworks, a jar of Vaseline, and a thumb drive. Later that night while Tazhayakov was monitoring the manhunt for the Tsarnaev brothers, he discussed getting rid of the backpack containing the fireworks and agreed to get rid of it. The backpack was then placed in a garbage bag and then thrown into a dumpster outside Tazhayakov’s New Bedford apartment. The FBI recovered this backpack a week later, after 25 agents spent two days searching a landfill in New Bedford.

The charging statute provides a sentence of no greater than 20 years in prison on the obstruction of justice count and five years on the conspiracy count, three years of supervised release, and a fine of $250,000 for each charge. Tazhayakov will also be deported at the conclusion of this prosecution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

This investigation was conducted by the FBI's Boston Division and member agencies of the Boston Joint Terrorism Task Force (JTTF) which is comprised of more than 30 federal, state and local enforcement agencies. U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Massachusetts State Police, University of Massachusetts Dartmouth Department of Public Safety, New Bedford Police Department, Dartmouth Police Department, U.S. Department of Transportation – Office of Inspector General, U.S. Treasury Inspector General for Tax Administration (TIGTA), Essex County Sheriff’s Office, and Internal Revenue Service, Criminal Investigations, provided assistance to this investigation.

T he case is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and John A. Capin of Ortiz’s Anti-Terrorism and National Security Unit with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.

Jing Wang, 51, the former Executive Vice President and President of Global Business Operations for Qualcomm Inc., today pleaded guilty to insider trading in shares of Qualcomm and Atheros Communications Inc. Wang also pleaded guilty to laundering the proceeds of his insider trading using an offshore shell company.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney L aura E. Duffy of the Southern District of California made the announcement. Wang pleaded guilty today in federal court in San Diego before U.S. District Judge William Q. Hayes .

“Not satisfied with his lucrative executive position at Qualcomm, Jing Wang traded on insider information about the company’s acquisitions and earnings to gain an illegal advantage in the financial market,” said Assistant Attorney General Caldwell. “Wang then laundered close to $250,000 in insider trading profits, and created a cover-up story to hide his crimes. We will continue to prosecute those who believe they can make easy money by breaking the laws that ensure a level playing field in the financial marketplace.”

“Jing Wang blatantly and repeatedly abused the trust placed in him by Qualcomm and the company’s shareholders,” said United States Attorney Duffy. “To make matters worse, he then misused the financial system to conceal his insider trading profits and enlisted his brother and stock broker to obstruct several investigations. Wang’s obstructive acts, though ultimately unsuccessful, were serious affronts to the rule of law. We will continue to use our excellent partnerships with the Criminal Division, the FBI, IRS-CI and our other law enforcement partners to not only prosecute securities fraud, but also disrupt attempts like Wang’s to obscure criminal conduct from the eyes of government investigators.”

According to court documents, Wang committed insider trading on three separate occasions over a ten-month period in 2010 and 2011. In early 2010, Wang purchased approximately $277,739 of Qualcomm stock prior to the company’s unexpected announcement of a dividend increase and stock repurchase program. In December 2010, while in Hong Kong, Wang purchased Atheros stock hours after Qualcomm’s Board of Directors made a non-public offer to purchase Atheros. Just a few weeks later, in January 2011, Wang directed his stock broker, Gary Yin, to sell the Atheros stock in a brokerage account held in the name of an offshore entity, Unicorn Global Enterprises, and used the proceeds to purchase Qualcomm stock, one day before Qualcomm announced record earnings results. In total, Wang illegally gained approximately a quarter of a million dollars from these three illegal transactions.

Wang also pleaded guilty to money laundering resulting from transferring the illegal proceeds in the Unicorn account – over $525,000 – to another nominee brokerage account in the British Virgin Islands for Clearview Resources Ltd. Wang also admitted in his plea agreement to obstructing justice by conspiring with his brother, Bing Wang, and Yin to fabricate evidence and concoct a false cover story that Bing Wang conducted the illegal stock trades. Sentencing is scheduled for Nov. 17, 2014.

Wang was originally indicted in September 2013. Bing Wang, who is currently believed to reside in China, remains charged and is wanted on an international arrest warrant. Gary Yin pleaded guilty to conspiring with Jing Wang and Bing Wang to obstruct justice and launder money, and is currently scheduled to be sentenced on Sept. 15, 2014.

The department appreciates the substantial assistance it received from the Securities and Exchange Commission’s Los Angeles Regional Office.

This case was investigated by the FBI’s San Diego Field Office and the Internal Revenue Service-Criminal Investigation’s San Diego Field Division. The case is being prosecuted by Trial Attorney James P. McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Eric J. Beste of the Southern District of California.

Lindrith Tsoodle, 58, was sentenced today by U.S. District Judge Daniel Hovland to serve 15 months in prison for two incidents in which he used excessive force against an arrestee and for lying to a federal agent. Tsoodle was further ordered to serve two years of supervised release following completion of his prison term. On April 1, 2014, a federal jury convicted Tsoodle on these three charges.

Tsoodle was a police officer with the Three Affiliated Tribes Police Department in New Town, North Dakota, on the Fort Berthold Reservation. He was convicted of twisting the neck of a handcuffed suspect, throwing him to the ground and dropping a knee on him. He was also convicted of, on a separate occasion, excessively tightening the handcuffs of an arrestee, slamming him against the wall, using pepper spray on the arrestee and striking him with his hands and a baton. Both of these actions occurred while the suspects were restrained. Tsoodle was also convicted of telling various false statements to a U.S. Bureau of Indian Affairs Special Agent, who interviewed the defendant regarding one of the assaults.

“Our system of government requires police officers to abide by the laws they enforce and to protect the constitutional rights of all persons in their custody,” said Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division. “This officer used his official position to commit civil rights abuses and then lied about his actions. The Department of Justice will continue to prosecute vigorously law enforcement officers who use their power to violate federal law.”

“With our colleagues at the Civil Rights Division, the U.S. Attorney’s Office is committed to protecting the civil rights of the citizens on the reservations in North Dakota,” said U.S. Attorney Timothy Purdon for the District of North Dakota. “This prosecution shows that our commitment to public safety on the reservations is matched by our commitment to a vigorous enforcement of civil rights of all people.”

This case was investigated by the Minot Resident Agency of the Minneapolis Division of the FBI and was prosecuted by Trial Attorneys Gerald Hogan and Nicholas Durham of the Civil Rights Division.

Mobile, Alabama-based Infirmary Health System Inc. (IHS), two IHS-affiliated clinics and Diagnostic Physicians Group P.C. (DPG) have agreed to pay the United States $24.5 million to resolve a lawsuit alleging that they violated the False Claims Act by paying or receiving financial inducements in connection with claims to the Medicare program, the Justice Department announced today.

“Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patients’ needs,” said Assistant Attorney General for the Civil Division Stuart F. Delery. “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health programs.”

The government’s suit alleged that two IHS affiliated clinics -- IMC-Diagnostic and Medical Clinic, in Mobile, and IMC-Northside Clinic, in Saraland, Alabama -- had agreements with DPG to pay the group a percentage of Medicare payments for tests and procedures referred by DPG physicians, in violation of the Physician Self-Referral Law (commonly known as the Stark Law) and the Anti-Kickback Statute. Also named in the lawsuit was Infirmary Medical Clinics P.C. (IMC), an affiliate of IHS that directly owns and operates approximately 30 clinics in the Mobile area, including the two clinics involved in this lawsuit.

The Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare. The Stark Law forbids a hospital or clinic from billing Medicare for certain services referred by physicians who have a financial relationship with the entity.

According to the government’s complaint, in 1988, IMC purchased IMC-Diagnostic and Medical Clinic from DPG and agreed to pay DPG a share of the revenues the clinics collected, including Medicare revenues from diagnostic imaging and laboratory tests. After IMC acquired the IMC-Northside Clinic in 2008, the physicians practicing there joined DPG and entered into an agreement with the same key terms as the earlier agreement with IMC-Diagnostic and Medical Clinic. The government contended that these payments were illegal kickbacks and constituted a prohibited financial relationship under the Stark Law, and that in June 2010, an attorney for DPG warned employees of both IMC and DPG that the compensation being paid to the physicians likely violated the law. Nevertheless, the agreements allegedly were neither modified nor terminated for another 18 months.

The lawsuit was originally filed by Dr. Christian Heesch, a physician formerly employed by DPG, under the whistleblower provisions of the False Claims Act. Those provisions authorize private parties to sue on behalf of the United States and to receive a portion of any recovery. The act permits the United States to intervene and take over the lawsuit, as it did in this case with respect to some of Dr. Heesch’s allegations. Dr. Heesch will receive $4.41 million as his share of the settlement.

“Today’s settlement represents a single but significant step towards achieving integrity in the administration of public health programs in this region,” said U.S. Attorney Kenyen Brown for the Southern District of Alabama. “Physicians, physician groups and other medical entities operating illegally within public health programs will be held accountable. I also commend whistle blowers like Dr. Christian Heesch, who helped bring this particular case to light.”

As part of the settlement announced today, the settling defendants have also agreed to enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), which obligates the defendants to undertake substantial internal compliance reforms and to submit its federal health care program claims to independent review for the next five years.

“Patients must know that medical advice is based on best practices, not on their provider’s bottom line,” said HHS-OIG Special Agent in Charge Derrick L. Jackson. “We are pleased these allegations are resolved and will continue to work with the U.S. Department of Justice to investigate and pursue illegal, wasteful business arrangements.”

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 $20.2 billion through False Claims Act cases, with more than $14 billion of that amount recovered in cases involving fraud against federal health care programs.

The investigation and litigation were conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Alabama, HHS-OIG and the FBI. The claims settled by this agreement are allegations only, and there has been no determination of liability.

The case is captioned U.S. ex rel. Heesch v. Diagnostic Physicians Group, P.C. et al., Civil Action No. 11-0364-KD-B (S.D. Ala.).

WASHINGTON—Attorney General Eric Holder today released the following statement regarding the U.S. Sentencing Commission vote approving retroactivity of sentence reductions for drug offenses:

“The department looks forward to implementing this plan to reduce sentences for certain incarcerated individuals. We have been in ongoing discussions with the Commission during its deliberations on this issue, and conveyed the department's support for this balanced approach. In the interest of fairness, it makes sense to apply changes to the sentencing guidelines retroactively, and the idea of a one-year implementation delay will adequately address public safety concerns by ensuring that judges have adequate time to consider whether an eligible individual is an appropriate candidate for a reduced sentence. At my direction, the Bureau of Prisons will begin notifying federal inmates of the opportunity to apply for a reduction in sentence immediately. This is a milestone in the effort to make more efficient use of our law enforcement resources and to ease the burden on our overcrowded prison system.”

Tyree Davis Sr., 42, of Flossmoor, Illinois, pleaded guilty to two counts of obstruction of justice and two counts of filing false retaliatory liens against government officials, the Justice Department announced today.

Davis pleaded guilty earlier today before U.S. District Judge Michael M. Mihm of the Central District of Illinois. Davis faces a statutory maximum sentence of 10 years in prison for each of the obstruction of justice charges as well as a statutory maximum sentence of 10 years in prison for each of the filing false retaliatory liens charges at his sentencing on Oct. 15.

A federal grand jury in Chicago returned an eight count federal indictment on July 24, 2013, charging Davis with obstruction of justice and filing fraudulent multi-billion dollar liens against government employees. According to the court documents, Davis obstructed justice by sending correspondence threatening to arrest two federal judges, including the judge who presided over the 2010 criminal tax trial of LaShawn Littrice. Littrice, whom Davis refers to as his wife, was convicted by a jury in June 2010 and sentenced to serve 42 months in prison in December 2010. Davis also filed false liens, titled Notice of Maritime Liens, claiming that each judge owed Littrice $100 billion. Davis then notified others, including credit bureaus, that he had filed the multi-billion dollar liens. In addition, Davis filed false liens against the U.S. Attorney and Clerk of Court for the Northern District of Illinois, an Assistant U.S. Attorney and an Internal Revenue Service (IRS)-Criminal Investigation special agent. The liens were all publicly filed with the Cook County Recorder’s Office and claimed that each individual owed Littrice $100 billion. Each of the liens were re-recorded in order to add real property descriptions.

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

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

Two Aryan Brotherhood of Texas (ABT) gang members have pleaded guilty to racketeering charges related to their membership in the ABT’s criminal enterprise, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

Kenneth Michael Hancock of Dallas, Texas, pleaded guilty today before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity. James Erik Sharron, aka “Flounder,” of Houston, Texas, pleaded guilty to the same charge on July 14, 2014.

According to court documents, Hancock, Sharron and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. Hancock, Sharron and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.

By pleading guilty to racketeering charges, Hancock and Sharron admitted to being members of the ABT criminal enterprise.

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

Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violated the rules or posed a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”

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

Hancock and Sharron are both scheduled to be sentenced on Oct. 8, 2014. Each faces a maximum penalty of life in prison.

Hancock and Sharron are two of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. To date, 34 defendants have pleaded guilty.

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

The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Southern District of Texas.

The Justice Department announced today that it has reached a settlement with the Orange County Clerk of Courts in Florida to remedy violations of the Americans with Disabilities Act (ADA). The settlement resolves allegations that the Orange County Clerk of Courts failed to provide a blind attorney with electronic court documents in an accessible format readable by his screen reader technology, despite repeated requests. Indeed, a motion filed in one of his cases included over 20 exhibits, the majority of which were not provided in an accessible format for over four months.

Under the settlement agreement, the Orange County Clerk of Courts will provide individuals with disabilities with any document in the official court record in an accessible format upon request, and ensure that the Clerk of Courts’ website is accessible to individuals with disabilities, including blind individuals, in accordance with the Web Content Accessibility Guidelines (WCAG) 2.0 Level AA, available at http://www.w3.org/TR/WCAG20/. The Clerk of Courts will also pay $10,000 in damages to the complaining attorney and undergo training on the ADA and WCAG 2.0 AA accessibility requirements.

“The Civil Rights Division commends the Orange County Clerk of Courts for working with us to ensure equal access to the official court record for individuals with disabilities,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Access to court documents is critical to ensuring that individuals with vision impairments and other disabilities have full and equal access to the courts—a right fundamental to our justice system.”

Under the ADA and its implementing regulations, Florida clerks of court are required to make their programs, services and activities accessible to qualified individuals with disabilities. The official court record is a program, service and activity of the clerk of courts. Those interested in finding out more about this settlement or the obligations of state and local government entities under the ADA may call the department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website. ADA complaints may be filed by email

The Justice Department announced the filing of a lawsuit today against Entergy Corporation for violating Executive Order 11246, Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. The lawsuit alleges that the defendant violated these laws and the executive order when it refused to comply with federal contractor requirements to submit proof of required affirmative action programs to the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). Because Entergy has refused to supply documentation and cooperate with auditing attempts, OFCCP has been unable to determine if Entergy is in compliance with its affirmative action obligations.

“Government contractors that choose to accept federal funds also agree to abide by laws and regulations aimed at preventing employment discrimination,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “When a government contractor, like Entergy, refuses to adhere to the obligations it accepted as a federal contractor, that refusal undermines the public trust that taxpayers expect in ensuring that public funding is used in a manner that complies with both federal law and agency regulations.”

“This issue has been litigated and re-litigated many times, and the courts have been clear: companies that profit from federal contracts must comply with our requests for proof that they are meeting their obligations,” said OFCCP Director Patricia A. Shiu. “Entergy already earns more than $1 billion in taxpayer-funded contracts to provide services to the government. We shouldn’t have to spend more of those dollars taking them to court because they refuse to abide by the law. So, I urge Entergy Chairman and CEO Leo Denault to respect our nation’s hard-won civil rights laws.”

Entergy, as a federal contractor, is prohibited from discriminating against employees and job applicants because of race, color, sex, religion, national origin, disability or protected veteran status. The company is also required to take affirmative action to employ qualified women, minorities, people with disabilities and protected veterans. To determine compliance with those affirmative action and non-discrimination requirements, government contractors, including Entergy, are required to develop and maintain written affirmative action programs, retain personnel and employment records, and provide OFCCP access to those documents during compliance reviews or investigations. The lawsuit seeks a permanent injunction requiring Entergy to comply with its obligations, including its obligation to produce documents requested by OFCCP within 30 days of the request.

The complaint, filed in the U.S. District Court for the Eastern District of Louisiana, alleges that since May 2012, Entergy has refused OFCCP’s repeated requests to turn over its written affirmative action programs and other records requested as part of the routine compliance review of 11 Entergy locations in Texas, Mississippi and Louisiana.

The Department of Labor referred this matter to the Department of Justice when Entergy refused to submit the documents requested by OFCCP even after receiving notices to show cause why enforcement proceedings should not be initiated.

The case is being handled by Senior Trial Attorney Valerie Meyer of the Department of Justice Civil Rights Division’s Employment Litigation Section.

More information about OFCCP is available on its website. Additional information about the Employment Litigation Section is available on the division website.

An Illinois man, who previously pleaded guilty to trafficking in counterfeit goods and introducing counterfeit drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act, was sentenced today to serve 41 months in prison.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson for the Southern District of Texas and Special Agent in Charge Brian Moskowitz of Homeland Security Investigations (HSI) made the announcement.

Fayez Al-Jabri, 45, of Chicago, Illinois, was sentenced by U.S. District Court Judge Nancy F. Atlas in the Southern District of Texas. In addition to his prison term, Al-Jabri will serve three years of supervised release and ordered to pay $15,066 in restitution and forfeit $47,750.

According to court documents, Al-Jabri conspired to smuggle more than 26,000 counterfeit Viagra tablets from China into the United States for further distribution. As part of that conspiracy, between July 2011 and October 2012, Al-Jabri and his co-conspirator shipped thousands of counterfeit Viagra tablets from Chicago to an undercover agent in Houston, Texas. HSI submitted all of the tablets seized during the investigation to both the U.S. Food and Drug Administration (FDA) and Pfizer, Viagra’s manufacturer, for analysis. Both the FDA and Pfizer identified the tablets as counterfeit and misbranded Viagra.

Al-Jabri and Jamal Khattab, 49, of Katy, Texas, were indicted on Aug. 22, 2012. On March 21, 2014, Al-Jabri pleaded guilty to one count of conspiracy to traffic in counterfeit goods, to introduce misbranded prescription drugs into interstate commerce and to import such goods contrary to U.S. law; one count of trafficking in counterfeit goods; and one count of introducing counterfeit drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act. Khattab pleaded guilty on Dec. 3, 2013, to the same charges, and his sentencing is scheduled for Aug. 14, 2014.

This matter was investigated by HSI, the FDA’s Office of Criminal Investigations, the Department of State - Diplomatic Security Service and police departments in Houston and Chicago. The case is being prosecuted by Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Kebharu Smith and Jennifer Lowery of the Southern District of Texas.

WASHINGTON – The Justice Department announced today that it has filed a complaint against Midwest Neurosurgeons L.L.C. and its owner, Dr. Sanjay Fonn, M.D., and DS Medical L.L.C. and its owner, Deborah Seeger, for allegedly violating the Medicare Anti-Kickback Statute and the False Claims Act by conspiring to solicit and receive commissions from medical device manufacturers related to the purchase of spinal implants and supplies used during spinal fusion surgeries performed by Dr. Fonn.

“The Department of Justice remains committed to protecting federal healthcare programs from unscrupulous providers who seek to take advantage of those programs,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We are particularly concerned about schemes such as this one that not only waste taxpayer money but also pose a potential risk to patient safety.”

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federal healthcare programs. It is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based upon the best interests of the patient.

The government’s complaint alleges that Dr. Fonn, 46, and his fiancée, Ms. Seeger, 47, both of Cape Girardeau, Missouri, incorporated D.S. Medical L.L.C. to serve as the distributor of medical devices and supplies to Dr. Fonn and his neurosurgery practice, Midwest Neurosurgeons L.L.C., in Missouri. Through D.S. Medical, Ms. Seeger demanded and was paid exorbitant commissions by medical device manufacturers for medical devices and supplies purchased by the hospital where Dr. Fonn performed spinal fusion surgeries. The hospital’s purchases were based on Dr. Fonn’s decision to use those devices and supplies during operations he performed. According to the complaint, once DS Medical started operating, Dr. Fonn altered the way he practiced medicine, generally using more spinal implants in each of his surgeries while performing more surgeries than he typically performed before or after DS Medical was operating. The commissions paid to D.S. Medical and Ms. Seeger by the manufacturers were allegedly used to purchase a house where Dr. Fonn and Seeger cohabited, a boat, an airplane and various home improvements, which they shared.

The allegations in the U.S. complaint were originally brought in a lawsuit filed under the qui tam provisions of the False Claims Act by several physicians, a spinal implant sales person, and a former employee of Midwest Neurosurgeons. Under the False Claims Act, a person that submits false or fraudulent claims to the government is liable for three times the government’s damages, plus civil penalties for each false claim. The act permits private citizens to sue on behalf of the government and share in any recovery. The United States is entitled to intervene in such a lawsuit, as it has done in this case.

The Commercial Litigation Branch of the Justice Department’s Civil Division, together with the U.S. Attorney’s Office for the Eastern District of Missouri, filed this case on behalf of the United States with the assistance of the Department of Health and Human Services Office of Inspector General and the FBI.

The qui tam case is captioned United States ex rel. Paul Cairns, Terry Cleaver, M.D., Kyle Colle, M.D., Scott Gibbs, M.D., Paul Tolentino, M.D., Kevin Vaught, M.D., and Daniel Henson v. D.S. Medical, L.L.C., Midwest Neurosurgeons, L.L.C., Sonjay Fonn, M.D., and Deborah Seeger, No. 1:12 CV 00004 SNLJ (E.D. Mo.). The complaint filed by the government contains allegations only; there has been no determination of liability.

A former senior executive of a subsidiary of Alstom SA, the French power and transportation company, pleaded guilty today for his participation in a scheme to pay bribes to foreign government officials.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Michael J. Gustafson of the District of Connecticut and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

William Pomponi, a former vice president of regional sales at Alstom Power Inc., the Connecticut-based power subsidiary of Alstom, pleaded guilty today in federal court in New Haven, Connecticut, to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) in connection with the awarding of the Tarahan power project in Indonesia. Pomponi was charged in a second superseding indictment on July 30, 2013. Pomponi is the fourth defendant to plead guilty to charges stemming from this investigation. Frederic Pierucci, the vice president of global boiler sales at Alstom, pleaded guilty on July 29, 2013, to one count of conspiracy to violate the FCPA and one count of violating the FCPA; and, David Rothschild, a former vice president of regional sales at Alstom Power Inc., pleaded guilty to conspiring to violate the FCPA on Nov. 2, 2012. Marubeni Corporation, Alstom’s consortium partner on the Tarahan project, pleaded guilty on March 19, 2014, to one count of conspiracy to violate the FCPA and seven counts of violating the FCPA, and was sentenced to pay a criminal fine of $88 million. FCPA and money laundering charges remain pending against Lawrence Hoskins, the former senior vice president for the Asia region for Alstom, and trial is scheduled for June 2, 2015.

“Three Alstom corporate executives and Marubeni, a major Japanese corporation, have now pleaded guilty to a seven-year scheme to pay bribes to Indonesian officials to secure a $118 million power contract,” said Assistant Attorney General Caldwell. “The Criminal Division of the Department of Justice will follow evidence of corruption wherever it leads, including into corporate boardrooms and corner offices. As this case demonstrates, we will hold both companies and their executives responsible for criminal conduct.”

According to the court filings, the defendants, together with others, paid bribes to officials in Indonesia, including a member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia, in exchange for assistance in securing a $118 million contract, known as the Tarahan project, to provide power-related services for the citizens of Indonesia from facilities in Tarahan. To conceal the bribes, the defendants retained two consultants purportedly to provide legitimate consulting services on behalf of Alstom and Marubeni in connection with the Tarahan project. In reality, the primary purpose for hiring the consultants was to use the consultants to pay bribes to Indonesian officials.

The first consultant retained by the defendants allegedly received hundreds of thousands of dollars in his Maryland bank account to be used to bribe the member of Parliament. The consultant then allegedly transferred the bribe money to a bank account in Indonesia for the benefit of the official. According to court documents, emails between Hoskins, Pomponi, Pierucci, Rothschild, and their co-conspirators discuss in detail the use of the first consultant to funnel bribes to the member of Parliament and the influence that the member of Parliament could exert over the Tarahan project.

However, in the fall of 2003, Hoskins, Pomponi, Pierucci and others determined that the first consultant was not effectively bribing key officials at PLN. One email between Alstom employees described PLN officials’ “concern that if we have won the job, whether their rewards will still be satisfactory or this agent only give them pocket money and disappear.” In another email, an employee at Alstom’s subsidiary in Indonesia sent an email to Hoskins asserting that the first consultant “has no grip on the PLN Tender team at all” and “is more or less similar to [a] cashier which I feel we pay too much.”

As a result, the co-conspirators retained a second consultant to bribe PLN officials, according to the court documents. The co-conspirators deviated from Alstom’s usual practice of paying consultants on a pro-rata basis in order to make a much larger up-front payment to the second consultant so that the consultant could “get the right influence.” An employee at Alstom’s subsidiary in Indonesia sent an email to Hoskins, Pomponi, Pierucci and others asking them to finalize the consultancy agreement with the front-loaded payments but stated that in the meantime the employee would give his word to a high-level official at PLN, according to the charges. The defendants and their co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the purpose of bribing the Indonesian officials.

An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

The case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad, with assistance from the Meriden, Connecticut, Resident Agency of the FBI. Significant assistance was provided by the Criminal Division’s Office of International Affairs, and the department has also received substantial assistance from its law enforcement counterparts in Indonesia, Switzerland and Singapore and greatly appreciates their cooperation. The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut.

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

Robert Eugene Revay, 79, of Oakland Park, Florida, was sentenced to serve 15 years in prison for conspiring to produce child pornography and for possession of child pornography.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida and Inspector in Charge Ronald J. Verrochio of the U.S. Postal Inspection Service (USPIS) made the announcement. The sentence was imposed by U.S. District Judge Robert N. Scola of the Southern District of Florida. In addition to Revay’s prison term, he was sentenced to a life term of supervised release.

According to court documents and statements made at the plea hearing, in 2011, law enforcement initiated an investigation into an online chat group whose members traveled to engage in sex with prepubescent boys, and produced and distributed child pornography. Through the investigation, law enforcement obtained computer hard drives that belonged to two of the group’s members, Mark J. Newton and Peter Truong, who were sentenced to serve 40 years in prison and 30 years in prison, respectively, for their crimes. Forensic examination of the hard drives yielded images and videos of boys being sexually abused.

Revay was a member of that online chat group. In 1997, Revay and Truong were living together in an apartment in Germantown, Maryland, where they enticed a then-12-year-old child to come to their apartment. They sexually abused the victim on numerous occasions and took pictures and videos of the abuse.

On March 19, 2013, as part of the investigation, law enforcement officers executed a federal search warrant at Revay’s residence in Oakland Park, Florida. On Revay’s computer, law enforcement discovered child pornography in an encrypted container. Revay admitted that he had downloaded and possessed the child pornography. Revay also admitted that on previous occasions, he downloaded child pornography via the Internet.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc . For more information about Internet safety education, please visit www.justice.gov/psc and click on the “resources” tab on the left of the page.

The case was investigated by USPIS, and prosecuted by LisaMarie Freitas and Michael Grant of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Olivia Choe of the Southern District of Florida.

WASHINGTON – Following his recent visit to Chicago where he participated in a roundtable discussion with Mayor Emanuel on recent reductions in youth violence, Attorney General Eric Holder today announced plans to send seven additional Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), agents to the field division office in Chicago.

The new ATF agents will coordinate efforts with U.S. Attorney Zachary T. Fardon, as well as federal, state and local law enforcement and community partnerships to advance proven strategies to reduce illegal gun trafficking and gun crime. There are currently 45 ATF agents assigned to Chicago.

"The Department of Justice will continue to do everything in its power to help the city of Chicago combat gun violence,” said Attorney General Eric Holder. "These new agents are a sign of the federal government's ongoing commitment to helping local leaders ensure Chicago's streets are safe.”

The deployment of new ATF agents represents the latest step in strengthening the partnerships with the Chicago Police Department and other local law enforcement agencies. In early June, ATF opened the Chicago Crime Gun Intelligence Center. The Center combines the gun enforcement efforts of the Chicago Police Department, Illinois State Police and ATF to provide additional leads that otherwise might go unnoticed and further addresses the illegal sales and possession of firearms in the State of Illinois.

In addition, U.S. Attorney Zachary T. Fardon announced a restructuring of the Criminal Division in his office and in doing so named a team of prosecutors who will work specifically to reduce violent crime in the city. The FBI currently has over 100 agents in Chicago assigned to curb gang and violent crimes. During the summer months, the city temporarily assigned an additional 20 agents to supplement crime reduction efforts. Under the 12 current grants administered by our Office of Juvenile Justice and Delinquency Prevention alone, the City of Chicago and Cook County has access to more than $6.6 million to further these efforts to address youth violence.

Gun crime is the primary driver of homicide in Chicago, and sixty percent of the guns recovered in violent crimes in Chicago were originally sold in other states and trafficked into the city. Given the interstate nature of these crimes, it is critical that federal and local law enforcement work together to identify traffickers and enforce federal gun laws. ATF will continue to concentrate its criminal enforcement on firearms trafficking throughout the region while curbing the supply of illegal guns that end up in the hands of gang members and other violent criminals. 

“ATF’s commitment to targeting traffickers and trigger pullers in Chicago is bolstered by these additional resources,” said ATF Director B. Todd Jones. “These resources, combined with ATF’s Crime Gun Intelligence Center, will strengthen and build on our outstanding partnership with the Chicago Police Department and other local, state and regional law enforcement to bring safety and justice back to the community."

“We have enjoyed an ever-improving and increasingly productive relationship with our federal partners,” said Chicago Police Superintendent Garry McCarthy. “We look forward to continuing that relationship and welcoming additional personnel in our ongoing efforts to ensure everyone in Chicago enjoys the same sense of safety.”

The Justice Department will continue to build on this work in the months ahead through initiatives like Project Safe Neighborhoods; the National Forum on Youth Violence Prevention; and innovative community oriented policing tools in the neighborhoods across Chicago.

Sherri Davis and her son, Andre Davis, were charged in a superseding indictment with conspiring to defraud the Internal Revenue Service (IRS) and with aiding and assisting in the preparation of false individual income tax returns, the Justice Department and IRS announced today. Sherri Davis was also charged with filing her own false individual income tax returns for tax years 2007 to 2009.

According to the superseding indictment, Sherri Davis was the previous owner and operator of 2FT Fast Facts Tax Service, a tax return preparation business located in Washington, D.C. Andre Davis is the current owner and operator of Davis Financial Services (DFS), a tax return preparation business also located in Washington, D.C. From January 2006 through April 15, 2013, Sherri Davis and Andre Davis conspired with others to defraud the IRS by preparing and filing false income tax returns that contained fraudulent deductions, expenses, losses and credits to which 2FT and DFS clients were not entitled, thereby generating fraudulent income tax refunds.

The superseding indictment alleges that Sherri Davis and Andre Davis falsified tax documents for 2FT and DFS clients in order to reduce their taxable income and to get a larger refund than what the client was entitled to receive. The superseding indictment also alleges that from 2007 through 2009, Sherri Davis filed her own false individual income tax returns which underreported 2FT’s gross receipts and falsely claimed business losses for 2FT.

An indictment merely alleges that crimes have been committed and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the conspiracy charge, the defendants face a statutory maximum sentence of five years in prison and a $250,000 fine. The charges of filing a false income tax return and aiding or assisting in filing a false return carry a statutory maximum sentence of three years in prison and a fine of $250,000 for each count.

The case is being prosecuted by Trial Attorneys Jessica Moran, Tiwana Fleming and Mark McDonald of the Justice Department’s Tax Division and was investigated by special agents of IRS-Criminal Investigation.

Related Materials:

United States v. Sherri Davis, et al.
Superseding Indictment

In a settlement with the United States, Minnesota Power (MP), an ALLETE company based in Duluth, Minnesota has agreed to install pollution control technology and meet stringent emission rates to reduce harmful air pollution from the company’s three coal-fired power plants located in Cohasset, Hoyt Lakes and Schroeder, Minnesota, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. The settlement will resolve claims that the company violated the New Source Review provisions of the Clean Air Act by unlawfully constructing major modifications at its plants without obtaining required permits and installing and operating the best available air pollution control technology, as the Act requires.

EPA expects that the actions required by the settlement will reduce harmful emissions by over 13,350 tons per year, which includes approximately 8,500 tons per year of sulfur dioxide. The company estimates that it will spend over $500 million to implement the required measures.

The settlement also requires that the company pay a civil penalty of $1.4 million to resolve Clean Air Act violations and spend at least $4.2 million on environmental projects to benefit local communities. The state of Minnesota is co-plaintiff to the settlement and will receive $200,000 of the penalty.

“Today’s settlement will require system-wide controls to reduce harmful air pollution and will benefit Minnesota residents today and for years to come,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “This innovative agreement will also fund projects that contribute to renewable energy production and restore valuable wetland habitat.”

“Reducing harmful emissions from large sources of air pollution is a national priority for EPA,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “By meeting some of the lowest emission rates in the country, Minnesota Power will continue to provide energy to communities across northeastern Minnesota, while at the same time, reducing sulfur dioxide and nitrogen oxide in the air, which can pose serious health risks.”

The settlement requires that the company install pollution control technology and implement other measures to reduce sulfur dioxide ( SO2 ), nitrogen oxide (NOx ), and particulate matter emissions from its three coal-fired power plants, which include nine operating units, as well as a biomass-and-coal-fired cogeneration plant which provides power and steam to an adjacent paper mill. Among other requirements, the company must install control technologies and meet emission rates that will be among some of the lowest in the country for SO2 at its largest unit and for both SO2 and NOx at the second largest unit.

In addition, the company must retire, refuel, repower, or reroute emissions at five other units, and must meet emission rates and install additional control technologies at remaining units. The company also must comply with declining system-wide annual tonnage limits for both SO2 and NOx.

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

The settlement also requires that the company spend $4.2 million on projects that will benefit the environment and local communities, including $2 million to build a large-scale solar installation system to benefit a local tribe known as the Fond du Lac Band. In addition, the company will provide between $500,000 and $1 million to replace, retrofit, or upgrade wood burning appliances to reduce pollution, and $200,000 to the National Park Service to restore wetlands at Voyageurs National Park. For the remaining money, the company can select from the following four project types: land donation and restoration, electric vehicle charging stations, clean diesel projects, or installation of renewable energy.

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

Minnesota Power provides electric service to approximately 143,000 people and 16 municipalities within a 26,000-square-mile area in northeastern Minnesota.

The settlement was lodged with the U.S. District Court for Minnesota and is subject to a 30-day public comment period and final court approval. It will be available for viewing at http://www.justice.gov/enrd/Consent_Decrees.html .

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

Benjamin Franklin Pass, 61, and P&W Waste Oil Services Inc. (P&W), of Leland, North Carolina were sentenced today in federal court in Raleigh, North Carolina. Pass was sentenced to 42 months in prison and ordered to pay restitution in the amount of $21,373,143.38 for clean-up costs associated with the environmental contamination at his business and an additional $538,857 to the Internal Revenue Service (IRS) for federal income taxes he failed to pay between 2002 and 2011.

Pass and the company previously pleaded guilty to crimes related to the unlawful handling and dilution of used oil contaminated with polychlorinated biphenyls (PCB). Pass also pleaded guilty to failure to pay taxes and P&W pleaded guilty to material false statements.

The court also ordered P&W to pay restitution in the amount of $21,373,143.38 for losses incurred by Colonial Oil and International Paper as a result of the defendants’ mishandling of used oil contaminated with PCBs that led to widespread contamination and millions of dollars in clean-up costs. P&W was also ordered to serve a five-year term of probation and to take remedial action to address the environmental contamination at its facility and other leased property in eastern North Carolina, including but not limited to, the proper treatment and disposal of PCB-contaminated waste oil.

“Today’s sentence is just punishment for the defendant’s actions, which placed the health of North Carolina’s residents and their natural resources at risk,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “ Environmental violations such as these are serious crimes, and the Justice Department and the U.S. Attorney’s Offices will continue to vigorously prosecute those individuals and companies who ignore the laws Congress enacted to protect people and our environment from toxic substances like PCBs.”

“This disregard of environmental protections resulted in significant contamination,” said U.S. Attorney Thomas G. Walker. “The defendant’s conduct placed an economic burden on the United States and an unreasonable risk to the health and safety of the citizens of North Carolina.”

According to information in the public record, Pass owned and operated P&W’s facility in Leland, North Carolina. The facility is located approximately 500 feet to the east of the Cape Fear River and a federally recognized wetland.

As part of its business operations, P&W collected, transported, processed, and marketed used oil that it received from small and large companies, such as automotive service stations, transformer repair companies and marinas. P&W also conducted tank cleaning and waste removal.

P&W, however, was not authorized to transport, store, or handle used oil containing more than two parts per million (ppm) of PCBs. PCBs are man-made organic chemicals that were manufactured domestically from 1929 to 1979 and were used in hundreds of industrial and commercial applications, such as thermal insulation in electrical transformers and capacitors. PCBs were determined to cause cancer and have been demonstrated to cause a variety of adverse health effects on the immune system, reproductive system, nervous system, and endocrine system. Accordingly, Congress banned the production of PCBs and mandated that no person may distribute in commerce, or use any PCBs other than in a totally enclosed manner, and directed the U.S. Environmental Protection Agency (EPA) to promulgate rules phasing out the manufacture of PCBs and regulating their disposal. PCBs still exist in products produced before the 1979 ban and if mishandled and released into the environment, can remain for long periods of time in the air, water, and soil.

In July 2009, an employee of P&W transported used-oil contaminated with more than 500 ppm of PCBs from a business in Wallace, South Carolina to its Leland facility where the contaminated used oil was blended and diluted with other used oil. Testing results obtained by Pass in October 2009 revealed PCB contamination in excess of 4,925 ppm.

The contaminated product was eventually resold to Colonial Oil and International Paper. Colonial Oil discovered the contamination as part of its standard sampling and testing protocol. As a result, over three million gallons of contaminated used oil had to be transported and incinerated at a certified disposal site for PCBs. The costs to Colonial Oil for the proper disposal of the contaminated used oil exceeded $17 million in addition to significant disruption of its business operations.

The investigation further revealed that at the direction of Pass, employees of P&W continued to transport and dilute the PCB-contaminated used oil at the facility after the contamination was discovered. The EPA intervened and had the Leland facility designated a Superfund site. Superfund is the name given to the federal environmental program established to clean up the nation’s uncontrolled hazardous waste sites. Costs for the clean-up of the contaminated tanks at the facility exceeded $3.4 million.

Law enforcement also learned that in 2009 and again in 2010, Pass and P&W falsely certified that its employees had taken requisite training on the handling of hazardous wastes and that, between 2002 through 2011, Pass failed to pay his federal income taxes despite having the ability to pay.

“Today’s sentencing is a direct result of the strong collaboration between EPA-CID and its federal law enforcement partners,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in North Carolina. “In order to safeguard the environment and public health, it is essential that we hold companies and their corporate officers responsible for failing to accurately report violations to avoid penalty. We will continue to pursue those who fraudulently report information critical to human health and the environment to preserve the integrity of programs designed to protect the public.”

“Mr. Pass’s disregard to uphold his legal obligations in business and paying income taxes have come with a price,” said Chief Richard Weber of the IRS Criminal Investigation. “Today’s sentencing reinforces law enforcements collaborative efforts to enforce the law and ensure public trust.” Thomas J. Holloman, Special Agent in Charge IRS Criminal Investigation added, “A fraud of this magnitude requires a coordinated effort among law enforcement agencies to stop those involved from profiting from their wrongdoing. We are the stewards of our environment and anyone who knowingly pollutes it should be held accountable.”

Acting Assistant Attorney General Hirsch and U.S. Attorney Walker praised the continued joint efforts of the EPA’s Criminal Investigation Division and the IRS’s Office of Criminal Investigations and the U.S. Coast Guard’s Criminal Investigative Services for their diligent work in the investigation of this matter. Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina and Trial Attorney Shennie Patel of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division are the prosecutors in charge of the case. Assistant U.S. Attorney Norman Acker and the Financial Litigation Unit provided significant support to the prosecution team.

Jones Inlet Seafood Co., Inc., a federally-licensed fish dealer located in Point Lookout, New York, its company president, Michael G. Mihale, and the company vice-president, Bruce Larson, Jr. pleaded guilty today in federal court in Central Islip, New York., to federal felonies stemming from their role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside (RSA) Program, the Justice Department’s Environment and Natural Resources Division announced.

Michael G. Mihale and Bruce Larson, Jr. pleaded guilty to one count of wire fraud and one count of falsification of federal records. The two were involved in a scheme to direct unwitting subordinates to falsify and submit at least 65 fisheries dealer reports from June 2009 to December 2011, defrauding the United States of 56,000 pounds of overharvested and underreported fluke valued at $116,000. Jones Inlet Seafood Co., Inc. pleaded guilty to the falsification of federal records charge as well as one count of Lacey Act False Labeling for the knowing use of false documents in connection with approximately $100,000 worth of fluke that was shipped to customers in Connecticut and New Jersey.

As part of the plea deal, the three defendants agreed to be subject to between $222,000 and $276,000 in combined fines and restitution. The defendants also agreed to make a $30,000 community service payment to the Cornell Cooperative Extension of Suffolk County in order to pay for the enhancement of fluke habitat through the C.C.E.’s Marine Meadows Program. The jointly proposed sentence includes a ban on Mihale and Larson, Jr. from holding a federal dealer license, accessing the National Oceanic and Atmospheric Administration’s (NOAA) SAFIS computer system, participating in the RSA program, or being in a position to direct others to complete dealer reports . Jones Inlet also agreed to increased recordkeeping and auditing requirements. The court will hear sentencing recommendations regarding non-agreed terms at a hearing set for Jan. 12, 2015.

Jones Inlet Seafood is “Fish Dealer Y” as that entity is identified in the related case of U.S. v. Anthony Joseph. As a federal fish dealer, Jones Inlet Seafood had a NOAA permit to purchase fish directly from commercial fishing vessels without having to go through an intermediary. In June 2009, Mihale and Larson, Jr. learned that Anthony Joseph, captain of the F/V Stirs One, was consistently overharvesting fluke through Joseph’s abuse of the RSA Program. By June 2009, on behalf of Jones Inlet Seafood, Mihale and Larson, Jr. were making regular purchases of illegal fluke from Joseph at the Point Lookout, New York waterfront.

In order to cover his illegal fishing, Joseph would mail falsified fishing logs, known as FVTRs, to NOAA, but falsified FVTRs were just one side of the equation. This is because fish dealers are required to report their purchases to NOAA on an electronic form known as a dealer report. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price and weight. NOAA utilizes the data in the dealer reports to set quotas and implement other management measures designed to ensure a sustainable fisheries. The dealer reports also serve as a check on the information that is submitted in FVTRs. In other words, in order to effectuate his scheme, Anthony Joseph needed to ensure that corresponding false dealer reports were being submitted that contained the same false information as was contained on the falsified FVTRs. A mismatch would have indicated a serious error or fraud, and would have been a red flag for fisheries managers. Accordingly, during June 2009 to December 2011, Mihale and Larson, Jr. schemed with Anthony Joseph to file at least 65 false dealer reports with NOAA, representing a loss of 56,000 pounds of fluke valued at $116,000. The vast majority of these three defendants’ illegal activity took place in 2011.

The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.

The United States filed a complaint today to bar Victor M. Crown, individually and through his businesses Crown and Franklin Accounting and Refunds, Crown-Franklin Accounting Inc., Accurate Accounting PV, and Lourdes Theodossis Estate, from promoting two alleged tax fraud schemes and from preparing federal tax returns for others, the Justice Department announced.

The complaint alleges that Crown’s tax schemes and the tax returns and other tax documents he prepares are based, at least in part, on his customers’ employment with the city of Chicago or on his customers’ discrimination awards in the class-action case Shakman, et al., v. Democratic Organization of Cook County, et al. (Shakman). Shakman is a discrimination class-action lawsuit against the city of Chicago that alleged political patronage in the hiring and promotion of public officials. As part of the settlement, the city of Chicago agreed to set up a $12 million fund to compensate class members for injuries that allegedly arose from violations of court orders.

According to the complaint, Crown prepares federal income tax returns and other documents that claim false amounts of income tax withheld from his customers’ earnings. The government contends that Crown asserts that his customers can claim credit for false amounts of tax withheld based on his contention that the city of Chicago incorrectly calculated the income taxes it withheld from its employees’ wages. According to the complaint, Crown’s claims lack merit because an employee is not entitled to claim an income tax withholding credit for more than the amount of income taxes actually withheld from their wages.

The complaint also alleges that Crown prepares customers’ income tax returns and other documents that claim bogus net operating losses. According to the complaint, Crown asserts that his customers are entitled to claim these bogus losses because the customers sought, but did not receive, a certain award amount for their Shakman class-action claim. For example, Crown allegedly prepared a return for a Shakman claimant who sought a $100,000 award, but only received $12,500. According to the complaint, Crown falsely claimed the customer was entitled to an $87,500 net operating loss on the customer’s amended tax returns. The complaint alleges that Crown’s scheme lacks merit because nothing in the Internal Revenue Code permits a taxpayer to deduct the amount of a denied discrimination claim as a net operating loss. According to the complaint, Crown’s frivolous claims have resulted in fraudulently understated tax liabilities on his customers’ federal income tax returns.

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

Related Materials:

United States v. Victor M. Crown, et al.
Complaint for Permanent Injunction and Other Relief

The United States has asked a federal court in Waco, Texas, to permanently bar several tax preparers individually and through the business Accounting System Services, doing business as A Kind Bookkeeping and Tax Service, from preparing federal tax returns for others, the Justice Department announced today.

The individually named defendants are Patricia Foley aka Sissy Foley, Amanda Smith, April Leann Morgan aka April Leann Ercanbrack, Cassandra Egbert and Joshua Stifle.

The complaint alleges that the defendants prepared income tax returns for their customers that contain false, improper or inflated business expense deductions on Schedule F (Profit or Loss from Farming) of their returns. As a result, the government contends the defendants’ customers have repeatedly reported and paid less tax than they actually owe. The complaint alleges that the tax harm caused by these understatements could be as much as $500,000.

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

Related Materials:

United States v. Patricia Foley, etc., et al.
Complaint for Injunctive Relief

A federal court in East St. Louis, Illinois, permanently barred Ronald Manis, a certified public accountant, of Carbondale, Illinois, from engaging in certain conduct, the Justice Department announced today. This includes preparing or filing federal tax returns by improperly claiming deductions for commuting to and from work, unsubstantiated meals and entertainment expenses, or other non-deductible personal expenses.

The injunction order also bars Manis from misrepresenting his ability to practice before the Internal Revenue Service (IRS) and requires Manis to hire, and pay for, a third party monitor to review a sample of tax returns prepared by Manis each year for five years. Manis agreed to the injunction without admitting the allegations in the complaint.

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

Related Materials:

United States v. Ronald E. Manis
Stipulated Final Judgment of Permanent Injunction Against Ronald Manis

Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division and U.S. Attorney Gregory K. Davis for the Southern District of Mississippi announced today that a federal grand jury has indicted John Louis Blalack, 20, of Brandon, Mississippi, Sarah Adelia Graves, 21, of Crystal Springs, Mississippi, Robert Henry Rice, 23, of Brandon, and Shelbie Brooke Richards, 20, of Pearl, Mississippi, for their alleged roles in a conspiracy to commit federal hate crimes against African-American people in Jackson, Mississippi.

Blalack, Graves and Richards are additionally charged with a racially motivated hate crime resulting in the death of a victim run over by a truck. Blalack and Rice are charged with two additional racially motivated hate crimes involving alleged assaults, and with carrying a firearm in relation to one of those assaults. Graves and Richards are additionally charged with soliciting others to commit hate crimes against African-Americans, and Graves is charged with making false statements to the FBI. Defendants Deryl Paul Dedmon, 20; John Aaron Rice, 19; Dylan Wade Butler, 21; William Kirk Montgomery, 23; Jonathan Kyle Gaskamp, 20; and Joseph Dominick, 22, all from Brandon, have previously entered guilty pleas in connection with their roles in these offenses.

The indictment alleges that, beginning in the spring of 2011, the defendants and others conspired with one another to harass and assault African-American people in and around the Jackson area. According to the indictment, on numerous occasions, the co-conspirators used dangerous weapons, including beer bottles, sling shots and motor vehicles, to cause, and attempt to cause, bodily injury to African-American people. The co-conspirators are alleged to have specifically targeted African-American people they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault. The co-conspirators would often boast about these racially motivated assaults. The indictment details several such assaults, including the fatal assault on a victim who was intentionally run over.

The defendants face a statutory maximum sentence of life in prison.

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

The charges set forth in an indictment are merely accusations and the defendants are presumed innocent until proven guilty.

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that five more defendants who were witnesses in the U.S. v. Mateo B. Sardoma, Jr. aka “Mat”, Rudy P.H. Sablan, Maria C. Edrosa aka “Cristina”, et al. trial were sentenced by Chief Judge Frances Tydingco-Gatewood, as follows:

1. Defendant JAMES PANGELINAN, age 44, was sentenced on July 6, 2014, to time served followed by four years of supervised release.  Defendant PANGELINAN pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 846.  Defendant PANGELINAN assisted co-defendant Ana Toves in selling methamphetamine for Defendants Mateo Sardoma, Jr. and Rudy Sablan.
   

2. Defendant SYLVIA MASHBURN DUENAS, age 30, was sentenced on July 8, 2014, to
   37 months incarceration followed by five years of supervised release.  Defendant
   DUENAS pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of
   21 U.S.C. §§ 841(a)(1) and 846.  Defendant DUENAS assisted Defendant Mateo
   Sardoma, Jr. in obtaining the methamphetamine.
   

3. Defendant CHRISTOPHER A.D. MESA, age 33, was sentenced on July 9, 2014, to 51 months incarceration followed by five years of supervised release.  Defendant MESA pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C.
   §§ 841(a)(1) and 846 and aiding and abetting the brandishing of a firearm during a drug crime in aid of Defendant Mateo B. Sardoma, Jr.
   

4. Defendant ANTHONY VILLANUEVA, age 48, was sentenced on July 10, 2014, to 46 months incarceration followed by five years of supervised release.  Defendant VILLANUEVA pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 846.  Defendant VILLANUEVA assisted defendant Mateo Sardoma, Jr. by supplying a post office box for Mateo Sardoma, Jr. to bring methamphetamine into Guam.
   

5. Defendant PAUL PEREZ, age 47, was sentenced on July 10, 2014, to 48 months imprisonment and five years of supervised release.  Defendant PEREZ pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C. §§ 841 and 846. PEREZ received a shipment of methamphetamine on behalf of Defendant Mateo B. Sardoma, Jr. and mailed some of the cash profits to California.

U.S. Attorney Limtiaco stated, “Our community is not immune from the poison of methamphetamine.  These cases illustrate the hard work our partners in law enforcement do every day to stop the distribution of methamphetamine into Guam.”  These three defendants were witnesses in the U.S. v. Mateo B. Sardoma, Jr. aka “Mat”, Rudy P.H. Sablan, Maria C. Edrosa aka “Cristina”, et al., which is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.

The investigations were conducted by Special Agents and Task Force Officers at the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Department of Homeland Security-Homeland Security Investigations (DHS-HSI) and the Drug Enforcement Administration (DEA).  The cases were prosecuted by Assistant U.S. Attorney Fred Black.

A jury found a Dothan, Alabama, woman guilty of conspiring to defraud the government through the filing of false tax returns, Deputy Assistant Attorney General Ronald A. Cimino of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced today.

Nina Macena, 32, was also found guilty of three counts of wire fraud and three counts of aggravated identity theft.

According to evidence from the trial, Macena provided stolen identities to Ivory Bolen, also of Dothan, who used the identities to file false tax returns that fraudulently requested refunds from the government. Bolen would attempt to have the refunds deposited onto prepaid debit cards, which would be mailed to addresses controlled by Bolen and Macena. Macena obtained the identities from Roderick Neal, a former bail bondsman in Dothan, who had access to the personal information of individuals who had been detained at the Dothan City Jail. Both Bolen and Neal previously pleaded guilty to their involvement in the scheme.

The evidence from the trial also showed that Bolen, acting at the direction of law enforcement, made several phone calls to Macena asking her to obtain more identities. Macena agreed to do so and said she would attempt to get more identities from a “friend” at “the bonding company.” Macena also stated in the calls that she had stolen identities in a storage unit. The next day federal agents executed a search warrant at Macena’s storage unit and seizedstolen identities and prepaid debit cards in the names of victims of the scheme. Altogether, Bolen filed tax returns claiming more than $300,000 in refunds using the stolen identities provided by Macena. The Internal Revenue Service (IRS), however, successfully stopped a number of the fraudulent returns.

Macena testified in her own defense at trial and admitted that she had obtained information from Neal for Bolen, but claimed that she was unaware of the nature of the information. She also testified that she stored items for Bolen in her storage unit, but that she was unaware of what she was storing.

Macena was ultimately convicted by the jury on all counts in the indictment. At sentencing Oct. 23, she faces a statutory maximum sentence of 10 years in prison for the conspiracy count, a statutory maximum sentence of 20 years in prison for the three wire fraud convictions and a mandatory sentence of two years in prison for the aggravated identity theft convictions. Her actual sentence, however, will be decided by a federal judge after considering the federal sentencing guidelines and statutory sentencing factors.

This case was investigated by special agents of the IRS - Criminal Investigation. Trial Attorneys Jason Poole and Charles Edgar of the Tax Division prosecuted the case with the assistance of the U.S. Attorney’s Office for the Middle District of Alabama.

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

Macon Openshaw, 22, was sentenced today by U.S. District Court Judge Tena Campbell for the District of Utah to serve 60 months in prison for a bias-motivated attack at a local synagogue and for two unlawful gun possession charges. Openshaw was further ordered to pay $1,969 in restitution to the synagogue to repair the damage caused by his actions and was ordered to serve three years of supervised release following completion of his prison term.

On April 16, 2014, Openshaw pleaded guilty to the civil rights violation of damaging the synagogue and to the gun charges. As part of his plea, Openshaw admitted to firing three rounds from a Walther .22 caliber handgun at the Congregation Kol Ami synagogue in Salt Lake City in 2012. At the time of the attack, there were no congregants inside of the synagogue. Openshaw said he shot the synagogue because of its religious character. Openshaw also admitted to possessing a handgun with a destroyed serial number, which was the same handgun he used to shoot the synagogue. He also admitted to possessing several firearms and ammunition while he was subject to a protective order.

“Religiously-motivated violence cannot be tolerated by civil society,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The department stands ready to combat violence based on a person’s religion, and will continue to prosecute these hate crimes vigorously.”

“Every person living in Utah has the right to be free from intimidating and threatening conduct,” said Acting U.S. Attorney Carlie Christensen for the District of Utah. “The U.S. Attorney’s Office in Utah has a strong history of prosecuting those who violate the civil rights of others in our communities.”

This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Carlos Esqueda of the U.S. Attorney’s Office for the District of Utah and Trial Attorney Nicholas Durham of the Civil Rights Division’s Criminal Section.

The Department of Justice announced today that it will require Sinclair Broadcast Group and Perpetual Corp. to divest their interests in WHTM-TV, an ABC affiliate in Harrisburg, Pennsylvania, in order to proceed with Sinclair’s proposed $963 million acquisition of Perpetual. The department said that, without the required divestiture, prices for broadcast television spot advertising would likely increase in parts of central Pennsylvania.

The department’s Antitrust Division and the Pennsylvania Office of Attorney General filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.

“Perpetual’s WHTM-TV competes directly with WHP-TV and WLYH-TV, two stations owned or operated by Sinclair, in the sale of broadcast television spot advertising in parts of central Pennsylvania,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The rivalry between the stations has helped to constrain advertising rates, and without the divestiture, advertisers on stations in this area would likely have paid higher prices.”

The department’s complaint alleges that the proposed acquisition would lessen competition in broadcast television spot advertising in the Harrisburg-Lancaster-Lebanon-York, Pennsylvania, designated market area (DMA). According to the complaint, the merging stations are relatively close substitutes for many advertisers, with similar demographic profiles and competing independent local news operations. As a result of the acquisition, Sinclair would own or control three of the six broadcast television stations selling advertising in the area, and advertisers could be forced to accept price increases due to the loss of competition. To remedy this harm, the proposed settlement requires Sinclair and Perpetual to divest all assets primarily used in the operation of WHTM‑TV to Media General, an independent purchaser approved by the United States.

The department also analyzed the likelihood of competitive harm in Charleston, South Carolina, where Sinclair will acquire ABC affiliate WCIV-TV as part of the proposed acquisition. Cunningham Broadcasting, a company with partnership and operation agreements with Sinclair around the country, owns the Charleston FOX affiliate, WTAT-TV. Due to the close ties between Sinclair and Cunningham, the department’s competitive analysis treated the relationship between the ABC affiliate Sinclair is acquiring, WCIV-TV, and the Cunningham-owned WTAT-TV as akin to a merger of those stations. The department’s investigation and antitrust analysis of the Charleston market revealed that advertisers do not largely view the stations as close substitutes, and even a full merger would not likely result in a substantial lessening of competition.

Sinclair, a Maryland corporation with headquarters in Hunt Valley, Maryland, owns or operates more than 145 broadcast television stations nationwide. Sinclair’s WHP-TV is the CBS affiliate in the Harrisburg-Lancaster-Lebanon-York DMA. Additionally, Sinclair operates WLYH-TV, the CW affiliate for the area, under an existing agreement with Nexstar Broadcasting, which is not a party to the proposed settlement.

Perpetual, a Delaware corporation with its headquarters in Arlington, Virginia, owns and operates seven broadcast television stations in six markets throughout the United States. Perpetual’s WHTM‑TV is the ABC affiliate in the Harrisburg-Lancaster-Lebanon-York DMA.

Media General, a Virginia corporation with headquarters in Richmond, Virginia, owns or operates more than 28 broadcast television stations nationwide. Media General does not currently own or operate any broadcast television stations in the Harrisburg-Lancaster-Lebanon-York DMA.

As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60‑day comment period to Scott A. Scheele, Chief, Telecommunications and Media Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7000, Washington, D.C. 20530. At the conclusion of the 60‑day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.

The Justice Department announced today that it has released a Best Practices Guide to Reform HIV-Specific Criminal Laws to Align with Scientifically-Supported Factors . This guide provides technical assistance regarding state laws that criminalize engaging in certain behaviors without disclosing known HIV-positive status. The guide will assist states to ensure that their policies reflect contemporary understanding of HIV transmission routes and associated benefits of treatment and do not place unnecessary burdens on individuals living with HIV/AIDS.

This guide is in follow-up to the department’s March 15, 2014, article published with the Centers for Disease Control and Prevention (CDC), Prevalence and Public Health Implications of State Laws that Criminalize Potential HIV Exposure in the United States, which examined HIV-specific criminal laws. Generally, these laws do not account for scientifically-supported level of risk by type of activities engaged in or risk reduction measures undertaken. As a result, many of these state laws criminalize behaviors that the CDC regards as posing either no risk or negligible risk for HIV transmission even in the absence of risk reduction measures.

“While initially well intentioned, these laws often run counter to current scientific evidence about routes of HIV transmission, and may run counter to our best public health practices for prevention and treatment of HIV,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The department is committed to using all of the tools available to address the stigma that acts as a barrier to effectively addressing this epidemic.”

The department’s efforts to provide guidance on HIV-specific criminal laws are part of its ongoing commitment to implementation of the National HIV/AID Strategy, released in 2010. Today’s guide furthers the expectation from the Office of National AIDS Policy that we tackle misconceptions, stigma and discrimination to break down barriers to care for those people living with HIV in response to the President’s Executive Order last year on the HIV Care Continuum Initiative. For more information on the National HIV/AIDS Strategy, visit the White House website .

For more information on the ADA and HIV, visit this website . Those interested in finding out more about obligations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website .

Two West Bloomfield, Michigan, residents pleaded guilty in the U.S. District Court for the Eastern District of Michigan today, announced the Justice Department and Internal Revenue Service (IRS).

Arkan Summa, an owner of numerous Happy’s Pizza franchises, pleaded guilty to corruptly endeavoring to obstruct or impede the due administration of the internal revenue laws. Tagrid Summa Bashi, Summa’s sister and a nominee owner, pleaded guilty to willfully delivering false documents to the IRS.

A multiple count indictment was unsealed July 16, 2013 alleging that from approximately June 2004 through April 2011, Summa executed a scheme in which he diverted gross receipts, underreported wages and caused the taxable income and payroll tax information of specific Happy’s Pizza franchises to be underreported to the IRS.

According to the information filed in court, in 2009, Bashi caused false payroll information forms to be submitted to the IRS. Documents filed with the court indicate Summa’s obstruction of the IRS resulted in a tax loss of approximately $199,847, and Bashi caused approximately $55,000 in wages to be underreported to the IRS through her false submission.

For the obstruction charge, Summa faces a statutory maximum sentence of three years in prison and a fine of up to $250,000. Bashi faces a statutory maximum sentence of 12 months in prison and a fine of up to $100,000. Sentencing for both defendants is scheduled for Oct. 23.

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

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

Thair Alwan and his son Saill Fadhil, owners and operators of Raleigh, North Carolina, area pizza stores, pleaded guilty today to willfully filing false tax returns in the U.S. Court for the Eastern District of North Carolina, the Justice Department and Internal Revenue Service (IRS) announced today.

According to court documents and statements made in court, Alwan, of Garner, North Carolina, and Fadhil, of Raleigh, own and operate a number of pizza stores in and around Raleigh called I Love NY Pizza. During the tax years 2008 and 2009, Alwan and Fadhil willfully skimmed almost all of the company’s cash receipts from their various stores and filed false federal income tax returns which failed to report the flow-through income, resulting in substantial tax underpayments. The skimmed receipts – estimated at $1.34 million – were used for personal expenditures or deposited into their personal bank accounts. When making cash deposits, the defendants structured the transactions under $10,000 and avoided the filing of Currency Transaction Reports.

According to court documents and statements made in court, I Love NY Pizza had two stores locations in Raleigh and one store location in Knightdale by 2008, and in 2009 another location in Apex was added. Fadhil eventually assumed management responsibility for a location after he graduated from college. Although employees stated that the business was at least 40 percent cash sales, cash deposits into the corporate bank account, as a percentage of total deposits, were 1.3 percent in 2008 and 2.3 percent in 2009. Between 2007 and 2010, Alwan made or caused 73 currency deposits into his personal accounts. Of the 73 deposits, 50 were at least $9,000, and the majority of these were in the amount of $9,980. None of the deposits were more than $10,000.

Alwan and Fadhil each face a statutory maximum sentence of three years in prison, one year of supervised release and a maximum fine of $250,000 per count at their sentencings, which have not yet been scheduled. Alwan and Fadhil have also agreed to pay restitution to the IRS.

The case was investigated by special agents from IRS-Criminal Investigation and prosecuted by Trial Attorney Todd Ellinwood of the Justice Department's Tax Division and Assistant U.S. Attorney Adam Hulbig of the Eastern District of North Carolina.

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

The Justice Department, along with federal and state partners, today announced a $7 billion settlement with Citigroup Inc. to resolve federal and state civil claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) prior to Jan. 1, 2009. The resolution includes a $4 billion civil penalty – the largest penalty to date under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). As part of the settlement, Citigroup acknowledged it made serious misrepresentations to the public – including the investing public – about the mortgage loans it securitized in RMBS. The resolution also requires Citigroup to provide relief to underwater homeowners, distressed borrowers and affected communities through a variety of means including financing affordable rental housing developments for low-income families in high-cost areas. The settlement does not absolve Citigroup or its employees from facing any possible criminal charges.

This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered $20 billion to date for American consumers and investors.

“This historic penalty is appropriate given the strength of the evidence of the wrongdoing committed by Citi,” said Attorney General Eric Holder. “The bank's activities contributed mightily to the financial crisis that devastated our economy in 2008. Taken together, we believe the size and scope of this resolution goes beyond what could be considered the mere cost of doing business. Citi is not the first financial institution to be held accountable by this Justice Department, and it will certainly not be the last.”

The settlement includes an agreed upon statement of facts that describes how Citigroup made representations to RMBS investors about the quality of the mortgage loans it securitized and sold to investors. Contrary to those representations, Citigroup securitized and sold RMBS with underlying mortgage loans that it knew had material defects. As the statement of facts explains, on a number of occasions, Citigroup employees learned that significant percentages of the mortgage loans reviewed in due diligence had material defects. In one instance, a Citigroup trader stated in an internal email that he “went through the Diligence Reports and think[s] [they] should start praying . . . [he] would not be surprised if half of these loans went down. . . It’s amazing that some of these loans were closed at all.” Citigroup nevertheless securitized the loan pools containing defective loans and sold the resulting RMBS to investors for billions of dollars. This conduct, along with similar conduct by other banks that bundled defective and toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.

“Today, we hold Citi accountable for its contributing role in creating the financial crisis, not only by demanding the largest civil penalty in history, but also by requiring innovative consumer relief that will help rectify the harm caused by Citi's conduct,” said Associate Attorney General Tony West. “In addition to the principal reductions and loan modifications we've built into previous resolutions, this consumer relief menu includes new measures such as $200 million in typically hard-to-obtain financing that will facilitate the construction of affordable rental housing, bringing relief to families pushed into the rental market in the wake of the financial crisis.”

Of the $7 billion resolution, $4.5 billion will be paid to settle federal and state civil claims by various entities related to RMBS: Citigroup will pay $4 billion as a civil penalty to settle the Justice Department claims under FIRREA, $208.25 million to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $102.7 million to settle claims by the state of California, $92 million to settle claims by the state of New York, $44 million to settle claims by the state of Illinois, $45.7 million to settle claims by the Commonwealth of Massachusetts, and $7.35 to settle claims by the state of Delaware.

Citigroup will pay out the remaining $2.5 billion in the form of relief to aid consumers harmed by the unlawful conduct of Citigroup. That relief will take various forms, including loan modification for underwater homeowners, refinancing for distressed borrowers, down payment and closing cost assistance to homebuyers, donations to organizations assisting communities in redevelopment and affordable rental housing for low-income families in high-cost areas. An independent monitor will be appointed to determine whether Citigroup is satisfying its obligations. If Citigroup fails to live up to its agreement by the end of 2018, it must pay liquidated damages in the amount of the shortfall to NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development.

The U.S. Attorney’s Offices for the Eastern District of New York and the District of Colorado conducted investigations into Citigroup’s practices related to the sale and issuance of RMBS between 2006 and 2007.

“The strength of our financial markets depends on the truth of the representations that banks provide to investors and the public every day,” said U.S. Attorney John Walsh for the District of Colorado, Co-Chair of the RMBS Working Group. “Today's $7 billion settlement is a major step toward restoring public confidence in those markets. Due to the tireless work by the Department of Justice, Citigroup is being forced to take responsibility for its home mortgage securitization misconduct in the years leading up to the financial crisis. As important a step as this settlement is, however, the work of the RMBS working group is far from done, we will continue to pursue our investigations and cases vigorously because many other banks have not yet taken responsibility for their misconduct in packaging and selling RMBS securities.”

“After nearly 50 subpoenas to Citigroup, Trustees, Servicers, Due Diligence providers and their employees, and after collecting nearly 25 million documents relating to every residential mortgage backed security issued or underwritten by Citigroup in 2006 and 2007, our teams found that the misconduct in Citigroup’s deals devastated the nation and the world’s economies, touching everyone,” said U.S. Attorney of the Eastern District of New York Loretta Lynch. “The investors in Citigroup RMBS included federally-insured financial institutions, as well as a host of states, cities, public and union pension and benefit funds, universities, religious charities, and hospitals, among others. These are our neighbors in Colorado, New York and around the country, hard-working people who saved and put away for retirement, only to see their savings decimated.”

This settlement resolves civil claims against Citigroup arising out of certain securities packaged, securitized, structured, marketed, and sold by Citigroup. The agreement does not release individuals from civil charges, nor does it release Citigroup or any individuals from potential criminal prosecution. In addition, as part of the settlement, Citigroup has pledged to fully cooperate in investigations related to the conduct covered by the agreement.

Michael Stephens, Acting Inspector General for the Federal Housing Finance Agency said, “Citigroup securitized billions of dollars of defective mortgages, after which investors suffered enormous losses by purchasing RMBS from Citi not knowing about those defects. Today’s settlement is another significant step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit in the lead up to the financial crisis, and is a necessary step toward reviving a sound RMBS market that is crucial to the housing industry and the American economy. We are proud to have worked with the Department of Justice, the U.S. Attorneys’ Offices in the Eastern District of New York and the District of Colorado. They have been great partners and we look forward to our continued work together.”

The underlying investigation was led by Assistant U.S. Attorneys Richard K. Hayes, Kevin Traskos, Lila Bateman, John Vagelatos, J. Chris Larson and Edward K. Newman, with the support of agents from the Office of the Inspector General for the Federal Housing Finance Agency, in conjunction with the President’s Financial Fraud Enforcement Task Force’s RMBS Working Group.

The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state Attorneys General offices around the country.

The RMBS Working Group is led by its Director Geoffrey Graber and its five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Assistant Attorney General for the Criminal Division Leslie Caldwell, Director of the SEC’s Division of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.

Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov

Related Materials:

SOF
Settlement Agreement
Appendix 1
Annex 2
Annex 3

A Crozet, Virginia man who previously pleaded guilty to child pornography charges was sentenced today in the U.S. District Court for the Western District of Virginia in Charlottesville for distribution and possession of child pornography.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Timothy J. Heaphy for the Western District of Virginia and Special Agent in Charge Adam S. Lee of the FBI’s Richmond Field Office made the announcement.

Michael G. Morris, who used the screen name “funshooter2006,” age 50, of Crozet, Virginia was indicted in 2013 and pleaded guilty on April 21, 2014 to two counts of distributing or receiving images of child pornography and one count of possessing child pornography. During the offenses charged, Morris was employed as an associate dean at the University of Virginia’s McIntyre School of Commerce. Morris was sentenced today before U.S. District Judge Norman K. Moon to 106 months in prison followed by 20 years of supervised release.

“Michael Morris was an associate dean at one of our country’s top universities, but instead of inspiring young minds academically, he was sharing and viewing pornographic images of young children,” said Assistant Attorney General Caldwell. “Today’s sentence demonstrates that those who trade and possess child pornography, no matter what positions of authority they may hold, will face the consequences for fueling an industry that causes immense damage to children.”

“Each and every time defendants like Mr. Morris download and share images depicting child pornography the children in those images suffer re-victimization,” U.S. Attorney Timothy J. Heaphy said today. “The Department will continue to use all available resources to seek out those who trade in this lurid material and bring them to justice.”

“The Richmond-based Child Exploitation Task Force will pursue and bring to justice anyone who produces, distributes, or possesses child pornography,” said Special Agent Lee. “The Morris case is an example of the FBI’s commitment to Virginia’s communities to keep our kids safe. I would like to thank the United States Attorney’s Office for achieving a positive conclusion to this case, the Charlottesville Police Department for their commitment to the Task Force, and the Task Force officer and FBI agent who led the case for their outstanding investigative work.”

According to evidence presented during the plea hearing and in court documents, a law enforcement officer, acting in an undercover capacity, successfully downloaded videos depicting minors engaged in sexually explicit conduct that Morris had made available to him on a publicly available file-sharing site on Jan. 6, 2012 and March 19, 2013. Morris also admitted that on Nov. 6, 2013, he possessed images or videos depicting prepubescent minors who the defendant knew had not attained 12 years of age. Investigators recovered computers and other items that contained child pornography during a search of Morris’s home.

The case was investigated by the FBI, with the assistance of the Charlottesville Police Department and the Department of Justice’s High Technology Investigative Unit. The case was prosecuted by Trial Attorney Herbrina Sanders of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Nancy Healey of the Western District of Virginia.

Dwayne A. Hardman, 44, co-founder of two government contracting companies that sought business from the United States Navy Military Sealift Command (MSC), and Adam C. White, 40, former vice president and co-owner of one of Hardman’s government contracting companies, were sentenced for bribery and conspiracy. On July 9, 2014, Hardman was sentenced to 96 months in prison, followed by three years of supervised release. White was sentenced today to serve 24 months in prison, followed by three years of supervised release. Hardman was ordered to forfeit $144,000, and White was ordered to forfeit $57,000.

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

According to court documents, Hardman and White participated in a five-year bribery scheme in which they and several co-conspirators provided more than $265,000 in cash bribes, among other things, to two public officials working for MSC, in an illegal effort to influence those public officials to provide favorable treatment to Hardman and White’s companies in connection with United States government contracting work.

On Feb. 18, 2014, Hardman pleaded guilty to a criminal information charging him with bribery. According to the plea documents, Hardman was the co-founder of two government contracting companies, referred to as Company A and Company B, located in Chesapeake, Virginia that sought contracting business from MSC, which is the leading provider of transportation for the United States Navy. At his plea hearing, Hardman admitted that beginning in March 2005, he and other Company A employees, provided approximately $3,000 in cash bribes per month to two MSC public officials, Kenny E. Toy, the former Afloat Programs Manager for the MSC’s N6 Command, Control, Communication, and Computer Systems Directorate, and Scott B. Miserendino Sr., a former government contractor who performed work for the MSC. Those Company A employees included Roderic J. Smith, the former president, co-owner and co-founder of Company A; Adam C. White, a former vice president and co-owner of Company A; and Michael P. McPhail a former project manager and co-owner of Company A. Hardman also admitted that in May 2009, he and Timothy S. Miller, co-founder of Company B, provided $50,000 in cash bribes to Toy and Miserendino. In addition to the cash bribes, Hardman stated that he and his co-conspirators provided Toy and Miserendino flat screen televisions, a paid vacation to Nags Head in North Carolina, a personal loan and installation of hardwood floors in Toy’s residence.

In exchange for these bribes, Toy and Miserendino provided favorable treatment in connection with MSC-related business to both Company A and Company B. During the bribery scheme, Company A received approximately $3 million in MSC-related business, and Company B received approximately $2.4 million in MSC-related business.

As part of his guilty plea, Hardman also admitted that, in approximately November or December 2010, Hardman threatened to report the bribery activities to law enforcement authorities if his co-conspirators did not provide him money. In total, Hardman admitted that he received approximately $85,000 from his co-conspirators, including Smith, Toy and Miserendino, in exchange for not reporting the bribery scheme to law enforcement authorities.

On April 4, 2014, White pleaded guilty to a criminal information charging him with conspiracy to commit bribery. At his plea hearing, White admitted that from approximately April 2005 until approximately March 2006, he personally contributed approximately $26,000 in cash bribe payments for Toy and Miserendino, and White was aware that other co-conspirators, including Hardman, Smith and McPhail, were also contributing cash and other things of value to be provided to Toy and Miserendino in exchange for their official assistance in providing MSC-related business.

Earlier this year, three other individuals pleaded guilty in connection with the bribery scheme. On Feb. 12, 2014, Toy, the former Afloat Programs Manager, pleaded guilty to accepting bribes from Hardman, White, and others. On Feb. 19, 2014, McPhail pleaded guilty to conspiracy to commit bribery. On March 5, 2014, Smith pleaded guilty to conspiracy to bribe public officials.

On June 23, 2014, United States District Judge Henry Coke Morgan of the Eastern District of Virginia sentenced Smith to 48 months in prison followed by 1 year of supervised release and ordered him to forfeit $175,000.

On May 23, 2014, a grand jury in the Eastern District of Virginia indicted Miserendino and Miller. The indictment charges Miserendino with one count of conspiracy to commit bribery, one count of bribery, one count of conspiracy to commit obstruction of criminal investigations and to commit tampering with a witness, and one count of obstruction of criminal investigations. The indictment charges Miller with one count of conspiracy to commit bribery and two counts of bribery. Trial is set for Sept. 30, 2014, before Chief Judge Rebecca Beach Smith of the Eastern District of Virginia.

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

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