District Not Recorded

The United States and private plaintiffs announced today that it has reached an agreement with the state of Ohio, under which the State Department of Youth Services (DYS) will dramatically reduce, and eventually eliminate, its use of seclusion on young people in its custody.  DYS will also ensure that young people in its juvenile facilities receive individualized mental health treatment to prevent and address the conditions and behaviors that led to seclusion.  The order resolves allegations that the state subjects young people with mental health needs in its custody to harmful seclusion and withholds treatment and programming, in violation of their constitutional rights. 

“Overreliance on solitary confinement for young people, particularly those with disabilities, is unsafe and counterproductive,” said Attorney General Eric Holder.  “This agreement will help ensure that incarceration in Ohio's state facilities is humane and that appropriate treatment is provided for young people with mental illness.  The Justice Department will continue to evaluate the use of solitary confinement so that it does not become a new normal for incarcerated juveniles.”

The department first investigated conditions at Ohio juvenile correctional facilities in 2007 and found constitutional deficiencies in the state’s use of physical force, mental health care, grievance investigation and processing and use of seclusion.  The department entered into a consent decree with the state in June 2008 to remedy these violations at the Scioto Juvenile Correctional Facility and the since-closed Marion Juvenile Correctional Facility.  Simultaneously, private plaintiffs in the case S.H. v. Reed entered into a consent decree with the state regarding similar deficiencies at all of the state’s juvenile correctional facilities.  However, between November 2013 and January 2014, data from the monitoring of both consent decrees revealed that Ohio had continued to use unlawful seclusion on youth at Scioto and in the other facilities. 

On March 12, 2014, the department moved to supplement its original complaint by including the state’s use of unlawful seclusion at all of its juvenile correctional facilities.  The court granted the motion on March 28, 2014, and the department filed the supplemental complaint on March 31, 2014.  The department also sought a temporary restraining order requiring immediate measures to curb the state’s excessive seclusion of youth with mental health disorders.  The agreed order resolves the United States’ claims in its motion for a temporary restraining order, as well as a motion for specific performance filed by the S.H. plaintiffs. 

As an interim measure prior to the elimination of disciplinary seclusion for youth, the state will dramatically reduce the conditions under which seclusion is allowed and the duration of seclusion.  The state will also reduce the potential harms caused by seclusion by increasing access to therapeutic, educational and recreational services while a young person is in seclusion.

The order requires the state to implement quality assurance measures to verify mental health treatment integrity, develop comprehensive assessments of youth, eliminate the use of disciplinary seclusion on youth with mental health needs, except for the most serious offenses, limit the amount and duration of disciplinary seclusion in the limited circumstances when it is permissible, conduct regular checks on youth who are secluded for safety concerns in order to release youth as soon as possible and perform individualized treatment plan reviews and modifications to address violent behaviors.  The order includes performance standards to measure compliance with these requirements, which will be jointly overseen by the monitors in the existing United States and S.H. consent decrees. 

Because the order also reflects the state’s commitment to eliminate all disciplinary seclusion, the department agreed to withdraw its remaining claims regarding the state’s seclusion of youth who do not have an identified mental health disorder.  The department can renew those claims later if the state makes insufficient progress in eliminating all forms of disciplinary seclusion. 

“The state of Ohio, the administrators of the Department of Youth Services and their counsel are to be commended for their commitment to reforming Ohio’s juvenile correctional facilities,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “Ohio’s commitments in this agreement will go a long way toward reducing the harm young people are experiencing in the state’s juvenile correctional facilities, especially young people with mental health needs.”  

“This agreement will provide significant relief to youth in DYS custody by ensuring they receive appropriate mental health treatment and are not subject to excessive seclusion,” said U.S. Attorney Carter Stewart for the Southern District of Ohio.  “Today, the state has taken an important step in rectifying the unconstitutional conditions in its juvenile correctional facilities.”

“We applaud the state for its commitment to rectifying the overuse of seclusion on youth in its custody,” stated U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio.  “The agreement we are announcing today – which is the result of the collective efforts of the Justice Department, the private plaintiffs and the state of Ohio – will put in place reforms that will drastically improve outcomes for these youth.” 

The Violent Crime Control and Law Enforcement Act of 1994 authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional or federal statutory rights of youth in juvenile justice institutions.  Please visit the division website to learn more about this act and other laws enforced by the Civil Rights Division.

This agreement is due to the efforts of the Special Litigation Section of the Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Ohio, and the U.S. Attorney’s Office for the Northern District of Ohio.  This agreement is also due to the work of plaintiffs’ counsel in S.H., Alphonse Gerhardstein of Gerhardstein & Branch Co. LPA, and Kim Tandy of the Children’s Law Center Inc., and to the leadership of the Ohio DYS.

Fifteen individuals were arrested today in South Africa, Canada, California, Wisconsin and Indiana, pursuant to an eight-count federal indictment on fraud charges filed in the Southern District of Mississippi. A total of 19 individuals were arrested across the United States and internationally on charges brought by federal prosecutors in Mississippi, South Carolina and Georgia.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Gregory K. Davis for the Southern District of Mississippi, Raymond Parmer Jr., Special Agent in Charge of Immigration Customs Enforcement (ICE), Homeland Security Investigations (HSI) in New Orleans and Robert Wemyss, U.S. Postal Inspection Service Inspector in Charge made the announcement.

Another individual was arrested today in New York on a related Southern District of Mississippi complaint. Three defendants in South Carolina were arrested in Charleston, pursuant to a nine-count indictment, and the U.S. Attorney’s Office for the Northern District of Georgia has filed related criminal complaints in Atlanta against two additional defendants. All of the indictments and complaints were unsealed yesterday.

The indictments allege the involvement of a West African transnational organized crime enterprise engaged in numerous complex financial fraud schemes over the internet. This mass marketing fraud includes romance scams, re-shipping scams, fraudulent check scams and work-at-home scams, along with bank, financial and credit card account take-overs.

The investigation was initiated in October 2011, by HSI agents in Gulfport, Mississippi, after U.S. law enforcement officers were contacted by a female victim who was the victim of a sweetheart scam. The victim received a package in the mail requesting that she reship the merchandise to an address in Pretoria, South Africa.  The investigation later revealed that the merchandise was purchased using stolen personal identity information and fraudulent credit card information of persons in the United States.  Investigators have identified hundreds of victims of this scam in the United States, resulting in the loss of millions of U.S. dollars.

Today’s arrests were the result of an investigation led by the HSI Gulfport office in partnership with the U.S. Postal Inspection Service, South African Police Service, Toronto Police, HSI Cyber Crimes Center, Treasury Executive Office of Asset Forfeiture, HSI Ontario, HSI Charleston, Interpol South Africa, HSI Pretoria and HSI Atlanta.

The Department of Justice Office of International Affairs assisted in the provisional arrests of ten defendants in Pretoria, South Africa. Another defendant was arrested in Toronto, Canada, and the remaining defendants were arrested in the United States.

The case in Mississippi will be prosecuted by Assistant U.S. Attorneys Annette Williams and Scott Gilbert, and will be scheduled for trial after extradition of the defendants to Mississippi. The South Carolina prosecution will be handled by Department of Justice Organized Crime and Gang Section trial attorneys Leshia Lee-Dixon and Robert Tully. The Georgia cases will be prosecuted by Assistant U.S. Attorney Shanya J. Dingle of the Northern District of Georgia.

An indictment is a formal charge against a defendant. Under the law, an indictment is merely an accusation and a defendant is presumed innocent until proven guilty.

U.S. Navy Petty Officer First Class Daniel Layug pleaded guilty in the Southern District of California today to accepting more than $10,000 in cash, consumer electronics and travel expenses from a foreign defense contractor in exchange for classified and internal Navy information.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Laura Duffy of the Southern District of California, Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General for Investigations James B. Burch of the U.S. Department of Defense Office of the Inspector General made the announcement.

Layug, 27, entered his plea before U.S. Magistrate Judge Karen S. Crawford to one count of conspiracy to commit bribery. He is the sixth defendant charged – and the third to plead guilty – in the alleged bribery scheme involving Singapore-based defense contractor Glenn Defense Marine Asia (GDMA), which provided port services to U.S. Navy ships in the Asia Pacific region.

“Today, U.S. Navy Petty Officer First Class Dan Layug admitted that he swapped classified U.S. Navy information for cash, luxury travel perks and electronic gadgets from a defense contractor,” said Acting Assistant Attorney General O’Neil.  “In taking these under-the-table bribes, Layug put his own financial interests above those of the Navy and the country he vowed to serve.  The Criminal Division, with our law enforcement partners, is committed to holding responsible those who were part of this massive fraud and bribery scheme that cost the U.S. Navy more than $20 million.”

“Every service member is entrusted with the enormous responsibility of protecting this country at all costs,” said U.S. Attorney Duffy. “Because of greed, Daniel Layug fell woefully short of that high calling, and this guilty plea holds him accountable for a painful betrayal.”

“The guilty plea of U.S. Navy Petty Officer First Class Dan Layug is part of an ongoing effort by the Defense Criminal Investigative Service and its law enforcement partners to bring to justice individuals who seek to enrich themselves at the expense of U.S. taxpayers,” said Deputy Inspector General Burch. “While the conduct of the vast majority of service members is beyond reproach, Defense Criminal Investigative Service will vigorously pursue individuals who betray the trust bestowed upon them.”

“Petty Officer Layug sold sensitive Navy information for monetary gain,” said NCIS Director Traver. “In doing so, he compromised the integrity of his position and the safety of his shipmates. NCIS will continue to work with DCIS and the U.S. Attorney's Office in investigating and prosecuting these crimes to the fullest extent possible.”

According to allegations in court documents, GDMA owner and CEO Leonard Glenn Francis and his cousin, GDMA executive Alex Wisidigama, enlisted the clandestine assistance of Navy personnel – including Layug, Commander Michael Vannak Khem Misiewicz, Commander Jose Luis Sanchez, and Naval Criminal Investigative Service Special Agent John Beliveau – to provide classified ship schedules and other sensitive U.S. Navy information in exchange for cash, travel expenses, and consumer electronics. GDMA allegedly overcharged the Navy under its contracts and submitted bogus invoices for more than $20 million in port services.

Court records state that Layug worked secretly on behalf of GDMA, using his position as a logistics specialist at a U.S. Navy facility in Yokosuka, Japan, to gain access to classified U.S. Navy ship schedules and then provided this information to GDMA’s vice president of global operations. Layug admitted he also provided pricing information from one of GDMA’s competitors.

In return, according to the plea agreement, GDMA gave Layug envelopes of cash on a regular basis. Layug admitted that he accepted a $1,000 monthly allowance from GDMA. On May 21, 2012, GDMA’s vice president of global operations instructed a GDMA accountant that “at the end of each month, we will be providing an allowance to Mr. Dan Layug. Total of US $1,000. You may pay him the equivalent in Yen. He will come by the office at the end of each month to see you.” Layug also admitted that he received luxury hotel stays for himself and others in Malaysia, Singapore, Indonesia, Hong Kong and Thailand.

Further according to the plea agreement, Layug asked GDMA for consumer electronics. In an email on March 9, 2012, Layug asked the vice president of global operations, “What are the chances of getting the new iPad 3? Please let me know.” In the plea agreement, Layug admitted that GDMA then provided him with an iPad 3.

In another email exchange on May 28, 2013, Layug asked the vice president of global operations for a “bucket list” of items including a high end camera, an iPhone5 cellular phone, a Samsung S4 cellular phone, and an iPad Mini. Shortly after sending his “bucket list” to the vice president of global operations, Layug stated in an email that “the camera is awesome bro! Thanks a lot! Been a while since I had a new gadget!”

Francis was previously charged with conspiring to bribe U.S. Navy officials. Wisidagama pleaded guilty on March 18, 2014, to defrauding the U.S. Navy.

Two other senior Navy officials – Commander Michael Vannak Khem Misiewicz, 46, and Commander Jose Luis Sanchez, 41 – have been charged separately with bribery conspiracies involving GDMA. On Dec. 17, 2013, NCIS Supervisory Special Agent John Bertrand Beliveau II, 44, pleaded guilty to conspiracy and bribery charges for regularly tipping off Francis to the status of the government’s investigation into GDMA.

The ongoing investigation is being conducted by NCIS, the Defense Criminal Investigative Service and the Defense Contract Audit Agency.

The case is being prosecuted by Director of Procurement Fraud Catherine Votaw and Trial Attorneys Brian Young and Wade Weems of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Robert Huie of the Southern District of California.

Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil, the DOD Hotline at www.dodig.mil/hotline , or call (800) 424-9098.

A Texas man pleaded guilty today to conspiring to smuggle and to traffic in counterfeit and misbranded pharmaceuticals, including Viagra tablets, from China, announced Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

Nasif Baqla, 26, of Houston, pleaded guilty before U.S. District Judge Nancy F. Atlas in the Southern District of Texas 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.

Baqla was indicted on Aug. 22, 2012, as were two other individuals – Jamal Khattab, 49, of Katy, Texas, and Fayez Al-Jabri, 45, of Chicago – in a separate, but related case.  Khattab and Al-Jabri each pleaded guilty on Dec. 3, 2013, and March 21, 2014, respectively, to the same conspiracy charge as Baqla, as well as trafficking in counterfeit goods and introducing counterfeit drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act.

According to court documents, in July 2010, a package of counterfeit Viagra tablets was shipped from China to Houston, intended for Baqla and Khattab. The package was intercepted by Customs and Border Protection officers. Baqla claimed the pills were his and that he received them on behalf of a friend.  Although the tablets were marked with trademarks substantially indistinguishable from the genuine marking on a legitimate Viagra pill, the drugs in the package were counterfeit and misbranded.

This matter was investigated by Homeland Security Investigations, the Food and Drug Administration - Office of Criminal Investigations, Diplomatic Security Service and police departments in Houston and Chicago. The case is being prosecuted by Assistant Deputy Chief for Litigation John Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Kebharu Smith of the Southern District of Texas.

Today a federal grand jury in Milwaukee returned a two count indictment charging Paul Carter, aka Pimpin’ Paul, with sex trafficking offenses dating from 2012 through 2013, the Justice Department announced. 

Carter, 44, of Milwaukee, is charged with one count of sex trafficking of an adult female by force, threats of force, fraud and coercion.  Carter is also charged with one count of sex trafficking of a minor.  Carter allegedly used force, threats of force, fraud and coercion to cause the victim to engage in a commercial sex act while knowing that the victim was under the age of 18.  If convicted, Carter faces a statutory maximum sentence of life in prison on each charge.  

The case was investigated by the Human Trafficking Task Force for the Eastern District of Wisconsin, which includes law enforcement officers from the FBI, Homeland Security Investigations, Wisconsin Division of Criminal Investigation and the Milwaukee Police Department.  The case is being prosecuted by Assistant U.S. Attorney Karine Moreno-Taxman of the Eastern District of Wisconsin and Trial Attorney Daniel H. Weiss of the Civil Rights Division's Human Trafficking Prosecution Unit.

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

The Justice Department filed a joint motion today for entry of a landmark consent decree to resolve allegations that the Law School Admission Council (LSAC) engaged in widespread and systemic discrimination in violation of the Americans with Disabilities Act (ADA).  Under the proposed consent decree, LSAC will pay $7.73 million in penalties and damages to compensate over 6,000 individuals nationwide who applied for testing accommodations on the Law School Admission Test (LSAT) over the past five years.  The decree also requires comprehensive reforms to LSAC’s policies and ends its practice of “flagging,” or annotating, LSAT score reports for test takers with disabilities who receive extended time as an accommodation.  These reforms will impact tens of thousands of test takers with disabilities for years to come. 

The United States intervened in DFEH v. LSAC Inc., which was originally brought on behalf of California test takers in the U.S. District Court for the Northern District of California.  The United States’ intervention expanded the case to ensure comprehensive and nationwide relief under Title III of the ADA for individuals with disabilities who request testing accommodations for the LSAT – a required examination for anyone seeking admission to an American Bar Association approved law school in the United States.  The allegations in the complaint detail LSAC’s routine denial of testing accommodation requests, even in cases where applicants have a permanent physical disability or submitted thorough supporting documentation from qualified professionals and demonstrated a history of testing accommodations since childhood.  Without the necessary accommodations, test takers with disabilities are denied an equal opportunity to demonstrate their aptitude and achievement level.  The lawsuit further alleged that LSAC engages in discrimination prohibited by the ADA through its practice of flagging the LSAT score reports of individuals who received extended time as a testing accommodation, thereby identifying to law schools that the test taker is a person with a disability.

“This landmark agreement compels systemic reforms to LSAC’s treatment of test takers with disabilities and brings an end to LSAC’s stigmatizing practice of flagging the score reports of individuals with disabilities who require certain testing accommodations,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “If entered by the court, this decree will impact tens of thousands of Americans with disabilities, opening doors to higher education that have been unjustly closed to them for far too long.  We congratulate LSAC for signing this agreement, which will compensate victims of past discrimination and provide a model for the provision of testing accommodations to test takers with disabilities on standardized examinations.”

“The participation of the U.S. Attorney’s Office in this important litigation sends a strong message that no discrimination of any kind will be tolerated in this district,” said U.S. Attorney Melinda Haag for the Northern District of California.  “We are fully committed to ensuring equal access to all opportunities society has to offer, including education.”

Under the consent decree, LSAC has agreed to:

• put a permanent end to the practice of flagging the LSAT score reports of individuals with disabilities who take the LSAT with the common testing accommodation of extended time;

• pay $7.73 million to be allocated for a civil penalty, compensation to individuals named in the United States’ and other plaintiffs’ complaints, and a nationwide victims’ compensation fund;

• streamline its evaluation of requests for testing accommodations by automatically granting most testing accommodations that a candidate can show s/he has previously received for a standardized exam related to post-secondary admissions (such as the SAT, ACT or GED, among others); and

• implement additional best practices for reviewing and evaluating testing accommodation requests as recommended by a panel of experts (to be created by the parties). 

Individuals who applied for testing accommodations from LSAC between Jan. 1, 2009, and May 20, 2014, may be eligible to receive a monetary award from a nationwide victims’ compensation fund.  The claims administrator for the fund has not yet been determined; this information will be posted on LSAC’s website following entry of the consent decree by the court.  Questions about the victims’ compensation fund should be directed to the claims administrator.

For more information or for a copy of the consent decree, please visit the ADA website.  Those interested in finding out more about the ADA may also call the Justice Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD). 

The Department of Justice announced today that it will require ConAgra Foods Inc., Cargill Inc., CHS Inc., and Horizon Milling LLC to divest four competitively significant flour mills in order to proceed with the formation of Ardent Mills, a flour milling joint venture.  The department said that the divestitures will preserve flour milling competition in four regions of the country encompassing large cities such as Los Angeles, Dallas, Minneapolis and the San Francisco/Oakland Bay Area, resulting in more competitive prices for wheat flour purchasers and ultimately lower prices for consumers who purchase wheat flour-based products, such as bread, cookies and crackers.

Ardent Mills would combine the flour milling assets of ConAgra Mills, a subsidiary of ConAgra Foods, and Horizon Milling, a joint venture between Cargill and CHS. 

 
The department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed joint venture.  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.  The department was assisted in its investigation by the California Attorney General’s Office. 

 
“Without the Antitrust Division’s required divestitures, the creation of Ardent Mills would have resulted in less competition in the sale of wheat flour, resulting in customers, such as industrial bakers and food service companies, paying higher prices for wheat flour and ultimately consumers paying more for products they enjoy in their everyday lives, such as bread, cookies and crackers,” said Deputy Assistant Attorney General for the Antitrust Division Renata B. Hesse.  “The divestitures will ensure that competition for hard and soft wheat flour sales is preserved in regions surrounding Los Angeles, Dallas, Minneapolis and the Bay Area.”

The department said that, without the divestitures, hard wheat flour prices would be higher in Northern and Southern California, as well as Northern Texas and the Upper Midwest.  Hard wheat, which has high gluten content, is well suited for baking bread, rolls, bagels, pizza dough and similar hearty baked goods. 

The department also said that prices would be higher for soft wheat flour in Southern California and Northern Texas if the deal proceeded unchanged.  Soft wheat flour, which has low gluten content, is well suited for baked goods that are lighter and flakier, such as cakes, cookies and crackers.  Both types of flour are made and sold by flour millers – including ConAgra Mills and Horizon Milling – to industrial bakers, food processors, food service companies, distributors and retail sellers of flour for home use.   

The department’s complaint alleges that, in the relevant markets, the proposed joint venture would eliminate head-to-head competition between ConAgra Mills and Horizon Milling, increase the likelihood that flour milling capacity would be closed, and increase the likelihood of anticompetitive coordination among flour millers, which would raise flour prices for customers in the relevant markets.  The proposed settlement requires the companies to divest to Miller Milling Company LLC, four mills: ConAgra Mills’ Oakland, California; Saginaw, Texas; and New Prague, Minnesota mills; and Horizon Milling’s Los Angeles mill.  Miller Milling has only a minimal presence in the regions of concern; its acquisition of the divestiture mills will create a substantial, independent and economically viable competitor in each relevant market.  The proposed settlement also prohibits the companies from exchanging information related to wheat purchases or use by customers to which the companies have sold wheat.

ConAgra Foods is a Delaware corporation with its principal place of business in Omaha, Nebraska.  ConAgra Mills is one of the three largest flour millers in the country, operating 21 mills in the United States.  In 2012, ConAgra reported revenues of $13.3 billion; ConAgra Mills reported revenues of $1.8 billion. 

Horizon Milling is a joint venture that is 76 percent owned by Cargill and 24 percent owned by CHS.  It is headquartered in Wayzata, Minnesota, and is one of the three largest flour millers in the country, operating 20 wheat flour mills in the United States.  In 2012, Horizon reported revenues of approximately $2.5 billion.

Cargill is a privately held company incorporated in Delaware, with its headquarters in Wayzata.  Cargill produces agricultural products and food ingredients; it also markets wheat to flour mills.  Horizon Milling currently operates 15 former Cargill wheat flour mills, which Cargill contributed to Horizon when it was formed in 2002.  In 2012, Cargill reported revenues of $133.8 billion.

CHS is a Delaware corporation headquartered in Inver Grove Heights, Minnesota. Its lines of business include the sale of grains and grain marketing services, animal feed, and food and food ingredients; it also markets wheat to flour mills.  CHS owns five wheat flour mills in the United States, which it leases to the Horizon Milling joint venture.  In 2012, CHS reported revenues of $40.1 billion.

Miller Milling Company LLC, which is headquartered in Minneapolis, is a subsidiary of Nisshin Seifun Group Inc., which is headquartered in Tokyo. 

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 this proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530.  At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon a finding that it is in the public interest.

Jordan-based Arab Ship Management Ltd. pleaded guilty today in federal court in Wilmington, Delaware, to one count of violating the Act to Prevent Pollution from Ships, the Justice Department and the U.S. Coast Guard announced.

In accordance with the terms of the plea agreement, Arab Ship Management Ltd. was sentenced to pay a criminal penalty totaling $500,000 and be placed on probation for two years, during which time ships operated by the company will be banned from calling on ports of the United States.

“The defendant violated environmental laws that protect our marine environment from harmful pollution,” said U.S. Attorney for the District of Delaware Charles M. Oberly III. “This conviction ensures that the defendant is held accountable with a criminal fine and a contribution to conservation efforts in coastal Delaware, as well as a two-year ban from United States ports. The message to the shipping industry is clear: environmental crimes at sea will not be tolerated.”

“This case demonstrates one way the Coast Guard acts to protect the environment,” said Captain Kathy Moore, U.S. Coast Guard Commander of Sector Delaware Bay. “Marine Inspectors detected serious problems with the ship’s operations. They dove into the details and worked with the Department of Justice and the Coast Guard Investigative Service to bring this case to an appropriate resolution.”

According to court documents and statements made in court, Arab Ship Management Ltd. operated the M/V Neameh, a 6,398 gross ton ocean-going livestock carrier. On March 28, 2013, the U.S. Coast Guard boarded the vessel in the Delaware Bay Big Stone Anchorage to conduct an inspection. The inspection and subsequent criminal investigation revealed heavy oil sludge inside the piping on the discharge side of the pollution prevention equipment leading directly overboard, where no oil sludge should be if the pollution prevention equipment is operated properly. Inspectors also discovered that the vessel’s piping arrangement had been modified in a prohibited manner so as to allow oil sludge to be pumped directly overboard. This prohibited piping arrangement was removed prior to the vessel’s arrival in Delaware. Also during the inspection, Coast Guard officers were presented with two oil record books which are required by law to be accurately maintained onboard the vessel. These two oil record books contained different and contradictory entries for the time period of Nov. 30, 2011, through Jan. 2, 2012, as well as fake oily waste disposal receipts.

This case was investigated by the U.S. Coast Guard Sector Delaware Bay, Coast Guard Marine Safety Detachment Lewes and the Coast Guard Investigative Service. The case is being prosecuted by Trial Attorney Stephen Da Ponte in the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice and Assistant U.S. Attorney Edmond Falgowski from the U.S. Attorney’s Office for the District of Delaware.

A grand jury in the Western District of Pennsylvania (WDPA) indicted five Chinese military hackers for computer hacking, economic espionage and other offenses directed at six American victims in the U.S. nuclear power, metals and solar products industries. 

The indictment alleges that the defendants conspired to hack into American entities, to maintain unauthorized access to their computers and to steal information from those entities that would be useful to their competitors in China, including state-owned enterprises (SOEs).  In some cases, it alleges, the conspirators stole trade secrets that would have been particularly beneficial to Chinese companies at the time they were stolen.  In other cases, it alleges, the conspirators also stole sensitive, internal communications that would provide a competitor, or an adversary in litigation, with insight into the strategy and vulnerabilities of the American entity.

“This is a case alleging economic espionage by members of the Chinese military and represents the first ever charges against a state actor for this type of hacking,” U.S. Attorney General Eric Holder said.  “The range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response.  Success in the global market place should be based solely on a company’s ability to innovate and compete, not on a sponsor government’s ability to spy and steal business secrets.  This Administration will not tolerate actions by any nation that seeks to illegally sabotage American companies and undermine the integrity of fair competition in the operation of the free market.”

“For too long, the Chinese government has blatantly sought to use cyber espionage to obtain economic advantage for its state-owned industries,” said FBI Director James B. Comey.  “The indictment announced today is an important step.  But there are many more victims, and there is much more to be done.  With our unique criminal and national security authorities, we will continue to use all legal tools at our disposal to counter cyber espionage from all sources.”

“State actors engaged in cyber espionage for economic advantage are not immune from the law just because they hack under the shadow of their country’s flag,” said John Carlin, Assistant Attorney General for National Security.  “Cyber theft is real theft and we will hold state sponsored cyber thieves accountable as we would any other transnational criminal organization that steals our goods and breaks our laws.”

“This 21st century burglary has to stop,” said David Hickton, U.S. Attorney for the Western District of Pennsylvania.  “This prosecution vindicates hard working men and women in Western Pennsylvania and around the world who play by the rules and deserve a fair shot and a level playing field.”

Summary of the Indictment

Defendants :  Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui, who were officers in Unit 61398 of the Third Department of the Chinese People’s Liberation Army (PLA).  The indictment alleges that Wang, Sun, and Wen, among others known and unknown to the grand jury, hacked or attempted to hack into U.S. entities named in the indictment, while Huang and Gu supported their conspiracy by, among other things, managing infrastructure (e.g., domain accounts) used for hacking.

Victims : Westinghouse Electric Co. (Westinghouse), U.S. subsidiaries of SolarWorld AG (SolarWorld), United States Steel Corp. (U.S. Steel), Allegheny Technologies Inc. (ATI), the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) and Alcoa Inc.

Time period : 2006-2014.

Crimes : Thirty-one counts as follows (all defendants are charged in all counts).

Count(s)

Charge

Statute

Maximum Penalty

1

Conspiring to commit computer fraud and abuse

18 U.S.C. § 1030(b).

10 years.

2-9

Accessing (or attempting to access) a protected computer without authorization to obtain information for the purpose of commercial advantage and private financial gain.

18 U.S.C. §§ 1030(a)(2)(C), 1030(c)(2)(B)(i)-(iii), and 2.

5 years (each count).

10-23

Transmitting a program, information, code, or command with the intent to cause damage to protected computers.

18 U.S.C. §§ 1030(a)(5)(A), 1030(c)(4)(B), and 2.

10 years (each count).

24-29

Aggravated identity theft.

18 U.S.C. §§ 1028A(a)(1), (b), (c)(4), and 2

2 years (mandatory consecutive).

30

Economic espionage.

18 U.S.C. §§  1831(a)(2), (a)(4), and 2.

15 years.

31

Trade secret theft.

18 U.S.C. §§ 1832(a)(2), (a)(4), and 2.

10 years.

Summary of Defendants’ Conduct Alleged in the Indictment

Defendant

Victim

Criminal Conduct

Sun

Westinghouse

In 2010, while Westinghouse was building four AP1000 power plants in China and negotiating other terms of the construction with a Chinese SOE (SOE-1), including technology transfers, Sun stole confidential and proprietary technical and design specifications for pipes, pipe supports, and pipe routing within the AP1000 plant buildings. 

Additionally, in 2010 and 2011, while Westinghouse was exploring other business ventures with SOE-1, Sun stole sensitive, non-public, and deliberative e-mails belonging to senior decision-makers responsible for Westinghouse’s business relationship with SOE-1.

Wen

SolarWorld

In 2012, at about the same time the Commerce Department found that Chinese solar product manufacturers had “dumped” products into U.S. markets at prices below fair value, Wen and at least one other, unidentified co-conspirator stole thousands of files including information about SolarWorld’s cash flow, manufacturing metrics, production line information, costs, and privileged attorney-client communications relating to ongoing trade litigation, among other things.  Such information would have enabled a Chinese competitor to target SolarWorld’s business operations aggressively from a variety of angles.

Wang and Sun

U.S. Steel

In 2010, U.S. Steel was participating in trade cases with Chinese steel companies, including one particular state-owned enterprise (SOE-2).  Shortly before the scheduled release of a preliminary determination in one such litigation, Sun sent spearphishing e-mails to U.S. Steel employees, some of whom were in a division associated with the litigation.  Some of these e-mails resulted in the installation of malware on U.S. Steel computers.  Three days later, Wang stole hostnames and descriptions of U.S. Steel computers (including those that controlled physical access to company facilities and mobile device access to company networks).  Wang thereafter took steps to identify and exploit vulnerable servers on that list.

Wen

ATI

In 2012, ATI was engaged in a joint venture with SOE-2, competed with SOE-2, and was involved in a trade dispute with SOE-2.  In April of that year, Wen gained access to ATI’s network and stole network credentials for virtually every ATI employee.

Wen

USW

In 2012, USW was involved in public disputes over Chinese trade practices in at least two industries.  At or about the time USW issued public statements regarding those trade disputes and related legislative proposals, Wen stole e-mails from senior USW employees containing sensitive, non-public, and deliberative information about USW strategies, including strategies related to pending trade disputes.  USW’s computers continued to beacon to the conspiracy’s infrastructure until at least early 2013. 

Sun

Alcoa

About three weeks after Alcoa announced a partnership with a Chinese state-owned enterprise (SOE-3) in February 2008, Sun sent a spearphishing e-mail to Alcoa.  Thereafter, in or about June 2008, unidentified individuals stole thousands of e-mail messages and attachments from Alcoa’s computers, including internal discussions concerning that transaction.

Huang

Huang facilitated hacking activities by registering and managing domain accounts that his co-conspirators used to hack into U.S. entities.  Additionally, between 2006 and at least 2009, Unit 61398 assigned Huang to perform programming work for SOE-2, including the creation of a “secret” database designed to hold corporate “intelligence” about the iron and steel industries, including information about American companies.

Gu

Gu managed domain accounts used to facilitate hacking activities against American entities and also tested spearphishing e-mails in furtherance of the conspiracy.

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

The FBI conducted the investigation that led to the charges in the indictment.  This case is being prosecuted by the U.S. Department of Justice’s National Security Division Counterespionage Section and the U.S. Attorney’s Office for the Western District of Pennsylvania.

Related Materials:

Indictment

Attorney General Eric Holder issued the following statement today in response to a federal jury in Manhattan unanimously reaching a guilty verdict against Abu Hamza al-Masri:

“In both word and deed, Abu Hamza supported the cause of violent extremism. His conviction is as just as it was swift. This case is all the more noteworthy since it continues a trend of successful prosecutions of top terrorism suspects in our federal court system. With each efficiently delivered guilty verdict against a top al Qaeda-linked figure, the debate over how to best seek justice in these cases is quietly being put to rest.”

After an exhaustive, multi-year investigation into the use of illegal offshore bank accounts at Credit Suisse, today we have announced an historic guilty plea by the bank and the largest monetary penalty of any criminal tax case ever.

Today's guilty plea is an appropriate resolution, given the duration and breadth of Credit Suisse's conduct. Credit Suisse engaged in serious wrongdoing, first, when it aided and abetted U.S. tax evasion, and then when it failed to take immediate steps to remedy this conduct and cooperate in our investigation. Today Credit Suisse has admitted that conduct and faces significant consequences for it. Its agreement to pay fines and restitution in excess of 2 and a half billion dollars reflects both the significance of the problem at the bank and the bank's acceptance of responsibility for it.

Credit Suisse is taking the appropriate steps to put its criminal conduct behind it and move toward a new era of compliance. Through this guilty plea and Credit Suisse's civil resolutions with the Securities and Exchange Commission, the Federal Reserve, and the New York Department of Financial Services, Credit Suisse has committed to working with U.S. law enforcement and banking regulators in order to ensure that its wrongdoing remains in the past. We acknowledge Credit Suisse's efforts in this regard, and I expect that as the Bank moves forward, it will continue on its new path of compliance with U.S. tax laws.

In coming to today's resolution, we are mindful that guilty pleas by a bank can have impacts far beyond the parties to the plea. This plea demonstrates that the Department of Justice and bank regulators are prepared hold banks and their relevant employees accountable while being mindful of the impacts on depositors and the American public. The coordination required for this result can take considerable time, as in this case, but it is work that we deem important.

In several public statements, I have promised additional public developments with respect to the Department's investigations into the use of secret offshore bank accounts in Switzerland and elsewhere, and one of those developments has come to pass with today's plea. But there have been many other notable actions in the past few months in our ongoing efforts to combat the use of foreign bank accounts to evade U.S. taxes. Eight individuals affiliated with Credit Suisse have been indicted by the United States Attorney's office for the Eastern District of Virginia for their role in conspiring to assist U.S. clients in concealing their income and assets from the IRS. Two of them have pleaded guilty in recent weeks. In January 2013, Wegelin Bank, another Swiss bank, pled guilty to conspiracy to evade taxes. We have targeted 13 other Swiss banks for similar conduct. Just recently, a Swiss asset management firm, Swisspartners Group, entered into a multi-million-dollar settlement with the U.S. Attorney's Office for the Southern District of New York, and produced account files of its clients. We have also had over 100 Swiss banks come forward as part of a program we put in place with the support of the Swiss government. Under this program, these banks, which were not under investigation, will pay penalties for the violations of US law that were committed at their institutions, and provide us with information that will lead to the identification of their US clients who evaded paying their taxes. We also have had over 43,000 US taxpayers enter into the IRS voluntary disclosure program and pay over $6 billion in back taxes and penalties to the United States Treasury.

The Department is committed to robust enforcement in the offshore area, not just in Switzerland, but wherever in the world it is found. We have taken public actions in India, Israel, Luxembourg, the Cayman Islands and several other Caribbean countries. And we are engaged in law enforcement actions around the world that are not yet public. The Department's approach to investigating and prosecuting these cases is multi-faceted, and we are committed to using the many law enforcement tools at our disposal - from grand jury subpoenas to John Doe summonses, to whistleblowers and cooperating witnesses - to gather information and evidence to identify wrongdoers and hold them to account.

While today's action is a significant milestone in our law enforcement efforts, our work in the offshore area is far from done, and we expect additional public actions in this area in the coming months.

Today I commend the efforts of the Tax Division led by Assistant Attorney General Kathryn Keneally, and the U.S. Attorney's Office for the Eastern District of Virginia, led by U.S. Attorney Dana Boente. I also applaud the work and support of the Internal Revenue Service, especially intensive investigative efforts of the Criminal Investigation Division, led by Chief Richard Weber. We also appreciate the efforts of the Swiss government and banking regulators in reaching a just result and bringing the Credit Suisse matter to a close.

I would now like to turn things over to Assistant Attorney General of the Tax Division, Kathryn Keneally, who will provide additional comments on today's action and our law enforcement efforts in the offshore area.

Good afternoon – and thank you all for being here. I am joined today by Deputy Attorney General Jim Cole; Assistant Attorney General for the Tax Division Kathryn Keneally; U.S. Attorney Dana Boente, from the Eastern District of Virginia; and Commissioner John Koskinen of the Internal Revenue Service. We are here to announce a major step forward in our ongoing effort to protect the American people from financial misconduct – and to hold accountable any individual, bank, or other institution that violates our laws and abuses the public trust.

Today, the Department of Justice filed a criminal information against Credit Suisse AG –a bank that is one of the largest wealth managers in the world. In the course of our painstaking, years-long investigation, the Department discovered that Credit Suisse and its subsidiaries engaged in an extensive and wide-ranging conspiracy to help U.S. taxpayers evade taxes. The bank actively helped its account holders to deceive the IRS by concealing assets and income in illegal, undeclared bank accounts. These secret offshore accounts were held in the names of sham entities and foundations. This conspiracy spanned decades. In the case of at least one wholly-owned subsidiary, the practice of using sham entities to conceal funds began more than a century ago. Credit Suisse not only knew about this illegal, cross-border banking activity; they willfully aided and abetted it. Hundreds of Credit Suisse employees, including at the manager level, conspired to help tax cheats dodge U.S. taxes.

In the course of these activities, Credit Suisse deceived the IRS, the Federal Reserve, the Securities and Exchange Commission, and the Department of Justice. The bank went to elaborate lengths to shield itself, its employees, and the tax cheats it served from accountability for their criminal actions. They subverted disclosure requirements, destroyed bank records, and concealed transactions involving undeclared accounts by limiting withdrawal amounts and using offshore credit and debit cards to repatriate funds. They failed to take even the most basic steps to ensure compliance with tax laws. And when the bank finally began to feel pressure to correct illegal practices and comply with the law – as a result of the Justice Department's investigation, of which they were notified in 2010 – Credit Suisse failed to retain key documents, allowed evidence to be lost or destroyed, and conducted a shamefully inadequate internal inquiry.

Today, I can announce that Credit Suisse has agreed to plead guilty to criminal charges related to this pervasive illegal activity. This is the largest bank to plead guilty in 20 years. The bank will pay a total of $1.8 billion in the form of a fine of over $1.13 billion and nearly $670 million in restitution to the IRS. They have admitted criminal wrongdoing in a detailed Statement of Facts filed alongside the information in this case. And they have stopped these activities, fundamentally changed their business operations, and agreed to provide critical information that will aid in our enforcement efforts - so the bank can move forward in full compliance with the law.

This plea agreement caps a years-long investigation that has already led to law enforcement actions with respect to several individual employees Credit Suisse. Since 2011, the Department has indicted eight employees at the bank, including some at the manager level; two of these have so far pleaded guilty.

This announcement should send a firm and unequivocal message to anyone who would engage in dishonest or illegal financial activity that the Justice Department does not, and we will not, tolerate such activities. When a bank engages in misconduct this brazen, it should expect that the Justice Department will pursue criminal prosecution to the fullest extent possible, as has happened here.

This case shows that no financial institution, no matter its size or global reach, is above the law. When the Department of Justice conducts investigations, we will always follow the law and the facts wherever they lead. We will never hesitate to criminally sanction any company or individual that breaks the law. A company's profitability or market share can never and will never be used as a shield from prosecution or penalty. And this action should put that misguided notion definitively to rest.

This resolution, and today's announcement, were conducted in close coordination with the bank's financial regulators - in this case, the Board of Governors of the Federal Reserve, which today announced a $100 million penalty; the New York State Department of Financial Services, which announced a resolution totaling $715 million; and the SEC, to which Credit Suisse paid $196 million this past February.

Because criminal charges involving a financial institution have the potential to trigger serious follow-on actions by regulatory agencies, this coordination was imperative. As the regulators have conveyed this afternoon, notwithstanding this plea agreement, the bank will move forward. And although I cannot comment on, or specify the targets of, other ongoing investigations, I am confident that this robust cooperation will serve us well in the weeks and months ahead.

I'd like to thank everyone who made today's announcement possible – particularly Assistant Attorney General Keneally, her colleagues in the Tax Division, and U.S. Attorney Boente and his colleagues in the Eastern District of Virginia. Thank you for your tireless work on this important matter. At this time it's my privilege to introduce Deputy Attorney General James Cole, who will provide additional details on today's announcement.

The central mission of the Tax Division is to enforce our nation's tax laws fairly and consistently. This is a responsibility that we owe to every honest taxpayer who pays his or her fair share.

As part of this mission, we are committed to using all enforcement tools against those who seek to avoid their legal obligations, and their responsibilities to their fellow citizens and taxpayers, by hiding their assets in foreign bank accounts. We are also committed to investigating and holding responsible financial institutions, bankers, and other professionals who facilitate this conduct.

Credit Suisse has now acknowledged that it acted in both the United States and Switzerland to aid and abet the use of secret Swiss bank accounts for the evasion of U.S. taxes. As set out in the statement of facts, Credit Suisse assisted its clients in using sham entities, soliciting IRS forms that falsely stated that those sham entities were the beneficial owners of assets in accounts with the bank, and facilitating access to the funds in those accounts in a manner designed to keep the accounts secret. It also failed to preserve documents that would have aided in our investigation. The plea agreement that has been announced today imposes serious consequences on Credit Suisse for this conduct.

We appreciate that Credit Suisse has taken this significant step to accept the consequences of these acts. We also recognize that Credit Suisse has ceased this conduct, and has changed its business operations to ensure that U.S. taxpayers will no longer be able to hide their assets at Credit Suisse. Also, through the information that Credit Suisse has agreed to provide, the Internal Revenue Service and the Department of Justice will be able to make treaty requests to Switzerland for account records. For those account holders who closed their accounts knowing that our investigations were focusing on Credit Suisse, we are obtaining information that is enabling us to follow the funds to other Swiss banks or to banks in other tax haven and bank secrecy countries. By its plea today, Credit Suisse has addressed its past conduct, and is in a position to move beyond these criminal activities.

We also appreciate that Switzerland has taken important steps to ensure that its banking community will no longer be a haven for U.S. tax evasion. Switzerland's ratification, in September 2009, of the Protocol amending U.S.-Swiss tax treaty, and its inter-govermental agreement with the United States concerning FATCA implementation, were significant steps toward this goal. We are also grateful for the support of the Swiss Financial Market Supervisory Authority, FINMA, and the Swiss government for the Swiss Bank Program that the Department announced in August 2013. Through this program, Swiss banks are cooperating to provide valuable information that will further our global investigations, and those Swiss banks in turn have a path to resolution for past activities.

I also take this opportunity to thank the Attorney General and the Deputy Attorney General for the support and assistance that the Tax Division received throughout this investigation and in all our our enforcement activities, to recognize and thank United States Attorney Dana Boente for the excellent work by his office in the Eastern District of Virginia, to recognize and thank the IRS Commissioner John Koskinen and the IRS Criminal Investigation Division for the important work of the IRS in this law enforcement priority, and to recognize and thank all of the prosecutors and investigative agents who have done excellent work throughout this investigation, and in particular to recognize Mark Lytle, Assistant United States Attorney for the Eastern District of Virginia, Mark Daly, Senior Litigation Counsel, and Nanette Davis, Assistant Chief, with the Tax Division, and IRS Special Agent James O'Leary.

I would like now to turn to IRS Commissioner John Koskinen for additional comments.

James Everett Dutschke, 41, of Tupelo, Mississippi., was sentenced today by United States District Judge Sharion Aycock, in Aberdeen, Mississippi., to a 300 month prison sentence for developing and possessing the biological agent ricin and subsequently mailing ricin-laced, threatening letters including one that threatened bodily harm to the President of the United States. Dutschke was also sentenced to serve a term of 5 years supervised release.

The sentence was announced by John Carlin, Assistant Attorney General for the Justice Department’s National Security Division, Felicia Adams, U.S. Attorney for the Northern District of Mississippi, Daniel McMullen, Special Agent in Charge of the FBI’s Jackson Field Office, and Craig Caldwell, Special Agent in Charge of the Secret Service’s Birmingham, AL, District Field Office.

Following an investigation, Dutschke was arrested on April 27, 2013, and indicted by a federal grand jury on June 3, 2013. A superseding indictment was filed on Nov. 20, 2013. Dutschke pled guilty on Jan. 17, 2014 to one count of developing and possessing ricin, and three subsequent counts of mailing threatening letters laced with the substance to the President of the United States, U.S. Senator Roger Wicker, and Lee County, Mississippi, Justice Court Judge Sadie Holland. According to the plea agreement between Dutschke and the U.S. Attorney’s Office that was filed in U.S. District Court in Oxford, Dutschke had agreed to serve a 300 month prison sentence and had waived his right to appeal.

The investigation was conducted by the FBI’s Jackson and Memphis Joint Terrorism Task Forces, the U.S. Secret Service, the U. S. Postal Inspection Service, the U. S. Capitol Police and was assisted by the following state and local agencies: Mississippi National Guard 47th Civil Support, Mississippi Office of Homeland Security, Lee County Sheriff’s Office, Prentiss County Sheriff’s Office, Corinth Police Department, Tupelo Police Department and Booneville Police Department.  The case is being prosecuted by Assistant U.S. Attorneys Chad Lamar, Clay Joyner and Clyde McGee of the Northern District of Mississippi, and Andrew Sigler of the Department of Justice, National Security Division.

Former WellCare Chief Executive Officer Todd S. Farha, 45, of Tampa, Florida, was sentenced today in the Middle District of Florida to serve 36 months in prison for defrauding the Florida Medicaid program.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and United States Attorney A. Lee Bentley III of the Middle District of Florida made the announcement after Farha was sentenced by U.S. District Judge James S. Moody Jr.

Farha was convicted by a federal jury in the Middle District of Florida on June 10, 2013, of two counts of health care fraud.

According to court records and evidence at trial, Farha and others orchestrated a scheme to defraud the Florida Medicaid program from the summer of 2003 through the fall of 2007 by making fraudulent statements relating to expenditures for behavioral health care services.

WellCare operates health maintenance organizations (HMOs) in several states providing services through government-sponsored health care benefit programs like Medicaid. Two WellCare HMOs operating in Florida, StayWell and Healthease, contracted with the Agency for Health Care Administration (AHCA), the Florida agency that administers the Medicaid program, to provide Florida Medicaid program recipients with an array of services, including behavioral health services.

In 2002, Florida enacted a statute that required Florida Medicaid HMOs to expend 80 percent of the Medicaid premium paid for certain behavioral health services upon the provision of those services. In the event that the HMO expended less than 80 percent of the premium, the difference was required to be returned to AHCA. As part of the scheme, Farha and others fraudulently submitted inflated expenditure information in the company’s annual reports to AHCA to reduce the WellCare HMOs’ contractual repayment obligations for behavioral health care services.

On May 5, 2009 the government filed related charges in an information and a deferred prosecution agreement (DPA) against WellCare. Pursuant to that DPA, WellCare was required to pay $40 million in restitution, forfeit another $40 million to the United States and cooperate with the government’s criminal investigation. The company complied with all of the requirements of the DPA. As a result, the information was later dismissed by the court following a government motion. In a related civil qui tam case, Wellcare agreed to pay $137.5 million in civil fines and penalties.

This case was investigated by the U.S. Department of Health and Human Services Office of Inspector General, the FBI, and the Florida Attorney General's Medicaid Fraud Control Unit. The case was prosecuted by Senior Trial Attorney John Michelich of the Criminal Division’s Fraud Section and Assistant United States Attorneys Jay Trezevant and Cherie Krigsman and Special Assistant United States Attorney John Bowers of the Middle District of Florida.

Barry V. Voss of St. Paul, Minnesota, pleaded guilty today to failure to pay over employment taxes , announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division Justice, U.S. Attorney Andrew M. Luger for the District of Minnesota and Special Agent in Charge Kelly R. Jackson of the St. Paul Field Office of the Internal Revenue Service (IRS)- Criminal Investigation.  Voss pleaded guilty to one count of failure to pay over employment taxes for the fourth quarter of 2008.

According to the plea agreement, Voss filed quarterly employment tax returns with the IRS from July 2007 through December 2010 which reflected taxes withheld from the salaries of the employees of his law firm, Barry V. Voss P.A., including Voss’ own salary.  However, Voss failed to timely pay over to the IRS the full amount of the taxes due and owing.  Voss admitted that he intentionally failed to pay these taxes to the IRS, which totaled approximately $160,000. 

Voss faces a statutory maximum prison term of five years in prison, a fine of $250,000 and payment of back taxes owed to the IRS.  A sentencing hearing has not yet been scheduled.

This case was investigated by special agents of IRS-Criminal Investigation.  It is being prosecuted by Trial Attorneys Lori A. Hendrickson and Adam R. Smart of the Tax Division and Assistant U.S. Attorney Karen Schommer of the District of Minnesota.

At midnight on April 12, 2014, the Executive Office for Immigration Review experienced a catastrophic hardware failure that rendered inaccessible many of its applications. Immediately after identifying the problem, our staff began around-the-clock efforts to recover the hardware. We soon began working with data recovery service experts to preserve our data and restore our applications. Included in the inaccessible information were our backup systems.

We are happy to announce that the data recovery team was able to recover the data and create new drives for those which had failed. To date, we have not lost any data, and we are continuing to finalize restoration of those applications most critical to our internal and external stakeholders. As of 9:00 a.m. on May 19, 2014, our electronic databases are again functional. Although the case information hotline (800-898-7180) is also functional, the hotline is limited to providing information recorded in the electronic database, which our staff will continue to update until all case information is current. We are continuing recovery efforts on other applications, including eRegistration.

We appreciate the patience of our stakeholders through this frustrating time. Please know that our information technology staff has worked very hard to make sure that our system has been rebuilt, but we have also worked smart. Our system was reconstructed in a way that provides more and better redundancies and monitoring that will result in a greater assurance such issues will not again present.

Credit Suisse AG pleaded guilty today to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the Internal Revenue Service (IRS).  The guilty plea by the Swiss corporation is the result of a years-long investigation by U.S. law enforcement authorities that has also produced indictments of eight Credit Suisse executives since 2011; two of those individuals have pleaded guilty so far.

The plea agreement, along with agreements made with state and federal partners, provides that Credit Suisse will pay a total of $2.6 billion - $1.8 billion to the Department of Justice for the U.S. Treasury, $100 million to the Federal Reserve, and $715 million to the New York State Department of Financial Services.  The plea agreement was filed in the Eastern District of Virginia today.  Earlier this year, Credit Suisse paid approximately $196 million in disgorgement, interest and penalties to the Securities and Exchange Commission (SEC) for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC.  That settlement with the SEC is also reflected in today’s plea agreement.  Together, these actions by U.S. law enforcement and state and federal partners appropriately punish Credit Suisse for its past behavior in these matters.

The announcement was made by Attorney General Eric H. Holder, Deputy Attorney General James M. Cole, Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, and Commissioner John Koskinen of the IRS.

“This case shows that no financial institution, no matter its size or global reach, is above the law,” said Attorney General Holder.  “Credit Suisse conspired to help U.S. citizens hide assets in offshore accounts in order to evade paying taxes.  When a bank engages in misconduct this brazen, it should expect that the Justice Department will pursue criminal prosecution to the fullest extent possible, as has happened here.”

As part of the plea agreement, Credit Suisse acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS.

“Credit Suisse’s guilty plea is just the latest effort by the department to slam the door shut on undeclared bank accounts, phony trusts and other foreign schemes used by U.S. taxpayers to evade taxes,” said Deputy Attorney General Cole.  “We will continue to hold to account the bankers, the brokers and other professionals in Switzerland and around the world as well as the institutions that trained and directed them to use bank secrecy laws to protect U.S. tax cheats.”

According to the statement of facts filed with the plea agreement, Credit Suisse employed a variety of means to assist U.S. clients in concealing their undeclared accounts, including by:

•          assisting clients in using sham entities to hide undeclared accounts;

•          soliciting IRS forms that falsely stated, under penalties of perjury, that the sham entities were the beneficial owners of the assets in the accounts;

•          failing to maintain in the United States records related to the accounts;

•          destroying account records sent to the United States for client review;

•          using Credit Suisse managers and employees as unregistered investment advisors on undeclared accounts;

•          facilitating withdrawals of funds from the undeclared accounts by either providing hand-delivered cash in the United States or using Credit Suisse’s correspondent bank accounts in the United States;

•          structuring transfers of funds to evade currency transaction reporting requirements; and

•          providing offshore credit and debit cards to repatriate funds in the undeclared accounts.

As part of the plea agreement, Credit Suisse further agreed to make a complete disclosure of its cross-border activities, cooperate in treaty requests for account information, provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed, and to close accounts of account holders who fail to come into compliance with U.S. reporting obligations.  Credit Suisse has also agreed to implement programs to ensure its compliance with U.S. laws, including its reporting obligations under the Foreign Account Tax Compliance Act and relevant tax treaties, in all its current and future dealings with U.S. customers.

“Today’s plea by Credit Suisse is a significant step in our global enforcement against those who would avoid their tax obligations by hiding their assets in foreign bank accounts, and those financial institutions, bankers, and other professionals who facilitate this conduct,” said Assistant Attorney General Keneally for the Tax Division. “Credit Suisse has also changed its business operations to ensure that U.S. taxpayers will no longer be able to hide their assets at Credit Suisse, and provided the government with valuable information that will further our investigations.” 

“This prosecution and plea should serve notice that secret accounts and assisting the evasion of income taxes has a high cost,” said U.S. Attorney Boente.  “Concealing financial accounts from the U.S. government is not a legitimate part of wealth management or private banking services.” 

“Pursuing international tax evasion is a priority area for IRS Criminal Investigation, and we will continue to follow the money here in the United States and around the world” said IRS Commissioner Koskinen.  “I want to commend the special agents in IRS-Criminal Investigation for all of their hard work in this area and the close cooperation with the Department of Justice.  Today's guilty plea is another important milestone in ongoing law enforcement efforts to investigate the use of offshore accounts to evade taxes.  People should no longer feel comfortable hiding their assets and income from the IRS.”

The Board of Governors of the Federal Reserve System is also announcing today that it has reached a resolution with Credit Suisse, by which Credit Suisse has agreed to a cease and desist order, certain remedial steps to ensure its compliance with U.S. law in its ongoing operations, and a civil monetary penalty of $100 million.  Additionally, the New York State Department of Financial Services is announcing a similar resolution by which Credit Suisse has agreed to a cease and desist order and a monetary penalty of $715 million.

On Feb. 23, 2011, a grand jury in the Eastern District of Virginia returned an indictment charging four Credit Suisse employees - Marco Parenti Adami, a former Credit Suisse manager; Emanuel Agustino, a former Credit Suisse banker; Michele Bergantino. a former Credit Suisse banker; and Roger Schaerer, Credit Suisse’s former Representative Officer in its Representative Office in New York - with conspiring with other Swiss bankers and U.S. taxpayers to defraud the United States.  On July 21, 2011, the grand jury returned a superseding indictment adding four additional defendants charged with the conspiracy to defraud the United States.  The four new defendants were: Markus Walder, the former head of North America Offshore Banking at Credit Suisse; Süsanne D. Rüegg Meier, a former Credit Suisse manager; Andreas Bachmann, a former banker at Credit Suisse Fides, a subsidiary of Credit Suisse; and Josef Dörig, a former Credit Suisse Fides employee and owner/operator of a trust company.  On March 12, 2014, Bachmann pleaded guilty to the superseding indictment in connection with his work as a banker at Credit Suisse Fides.  On April 30, 2014, Dörig pleaded guilty to conspiring to defraud the IRS in connection with his role managing offshore entities used by U.S. taxpayers to conceal their accounts at Credit Suisse.  Those pleas were accepted by U.S. District Judge Gerald Bruce Lee.  Bachmann and Dörig each face maximum penalties of five years in prison when they are sentenced on Aug. 8, 2014.

This case was prosecuted by Assistant U.S. Attorney Mark D. Lytle and Trial Attorneys Mark F. Daly and Nanette L. Davis of the Tax Division.  The case was investigated by IRS-Criminal Investigation. 

The Department of Justice expressed gratitude to the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the U.S. Securities and Exchange Commission, and the New York State Department of Financial Services for their significant and valuable assistance.

Related Materials:

Plea Agreement
Statement of Facts
Waiver of Indictment
Criminal Information

Attorney General Eric Holder, Deputy Attorney General James Cole, Assistant Attorney General for the Tax Division Kathryn Keneally and IRS Commissioner John Koskinen will hold a press conference TODAY, MONDAY, MAY 19, 2014 at 6:00 p.m. to announce a major law enforcement action.

WHO:             Attorney General Eric Holder

Deputy Attorney General James Cole

Assistant Attorney General for the Tax Division Kathryn Keneally

IRS Commissioner John Koskinen

U.S. Attorney for the Eastern District of Virginia Dana Boente

IRS Criminal Investigation Chief Richard Weber

WHAT:          Press conference to announce law enforcement action

WHEN:          TODAY, 6:00 p.m. EDT, MAY 19, 2014

WHERE:        Department of Justice

                        7th Floor Conference Room

                        950 Pennsylvania Ave., N.W.

                        Washington, D.C.

                        OPEN PRESS

NOTE:  All media must present government-issued photo I.D. (such as driver’s license) as well as valid media credentials.  Media must enter the department at the visitor’s entrance on Constitution Avenue between 9th and 10th Streets.  Media may begin arriving at 5:00 p.m. EDT and cameras must be pre-set by 5:45 p.m. EDT.  Press inquiries regarding logistics should be directed to the Office of Public Affairs at 202-514-2007.

Today, that tool is an indictment backed by the independence and credibility of our criminal justice system.

The threat is from members of unit 61398 of the Chinese military, who have targeted the U.S. private sector for commercial advantage.

We allege that members of unit 61398 conspired to hack into computers of six U.S. victims to steal information that would provide an economic advantage to the victims’ competitors, including Chinese state-owned enterprises.

In the past, when we brought concerns such as these to Chinese government officials, they responded by publicly challenging us to provide hard evidence of their hacking that could stand up in court.

Well today, we are.

For the first time, we are exposing the faces and names behind the keyboards in Shanghai used to steal from American businesses.

This indictment describes, with particularity, specific actions on specific days by specific actors to use their computers to steal information from across our economy.

It describes how they targeted information in industries ranging from nuclear, to steel, to renewable energy.

It shows that – while the men and women of our American businesses spent their business days innovating, creating, and developing strategies to compete in the global marketplace – these members of unit 61398 spent their business days in Shanghai stealing the fruits of our labor.

And it shows that the business information these individuals stole, including trade secrets, would have been particularly beneficial to Chinese companies.

Let me give you some examples of allegations from the indictment:

Right about the time SolarWorld was rapidly losing its market share to Chinese competitors that were pricing exports well below costs, these hackers were stealing cost, pricing, and strategy information from SolarWorld’s computers.

And while Westinghouse was negotiating with a Chinese state-owned enterprise over the construction of nuclear power plants, the hackers stole trade secret designs for components of those plants. 

To be clear, this conduct is criminal. 

And it is not conduct that most responsible nations within the global economic community would tolerate.

At the Department of Justice, we have repeatedly pledged that we would do more to hold accountable those that engage in these actions. 

Today, we begin to fulfill that pledge. 

And we will continue using all of the tools at our disposal to pursue those who steal our intellectual property, no matter who they are or where they reside. 

Now I’d like to turn it over to David Hickton, the U.S. Attorney for the Western District of Pennsylvania, whose office has been a crucial partner in this investigation.  David?

Six Miami-area residents, including three former loan officers, pleaded guilty in the Southern District of Florida this week to participating in a fraudulent scheme designed to enrich real estate developers by selling condominium units to straw buyers.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Special Agent in Charge Phyllis Robinson of the Department of Housing and Urban Development’s Office of the Inspector General (HUD-OIG) in Miami and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency (FHFA) made the announcement.

Today, Leidy Masvidal, 42, of Miami, pleaded guilty before U.S. District Court Judge Marcia G. Cooke to conspiring to commit bank fraud. Sentencing is scheduled for Sept. 24, 2014. Alfredo Jesus Chacon, 48, of Orange Park, Florida, and Francisco Martos, 63, and Dorian Wong Magarino, 49, both of Miami, also pleaded guilty today to conspiring to commit wire fraud and mail fraud before U.S. District Court Judge Ursula Ungaro. Sentencing is scheduled for Aug. 1, 2014.

On May 14, 2014, Tania Masvidal, 49, and Douglas Ponce, 40, both of Miami, each pleaded guilty before Judge Cooke to conspiring to commit bank fraud. Sentencing is scheduled for July 30, 2014.

According to the defendants’ plea agreements and other court documents, the defendants participated in a scheme to pay straw buyers to submit false loan applications to lending institutions to purchase condominiums owned by co-conspirators. Leidy Masvidal and Tania Masvidal used a mortgage brokerage they owned, EZY Mortgage Inc., to arrange financing for the purchases. Because the straw buyers were not credit-worthy, the Masvidals secured loans in their names by submitting to lending institutions loan applications and other fraudulent documents containing false statements about the buyers’ income, employment and assets, and falsely stating that the buyers intended to reside in the properties. Additionally, the Masvidals enabled their co-conspirators to secretly fund the buyers’ obligations to pay money at closing (known as “cash to close” obligations) by establishing shell corporations, which the co-conspirators used to funnel cash from conspirators to the escrow account used at closing, as well as paying the straw buyers. The co-conspirators compensated the Masvidals for their role in the scheme by sending kickback payments taken from the loan proceeds to the Masvidals’ shell corporations for every straw buyer identified.

According to admissions in court records, Martos was a former loan officer at a mortgage company known as State Lending who helped secure financing for straw buyers in exchange for kickbacks by procuring false employment documents and by including false information in buyers’ loan applications. Chacon and Ponce recruited straw buyers to purchase properties owned by co-conspirators in exchange for kickbacks paid from the sales proceeds. Chacon also allowed a company that he controlled to be used as a false employer for the straw buyers. Magarino accepted payments to act as one of Chacon’s straw buyers and recruited other straw buyers into the scheme. For the properties in which Margarino acted as the straw buyer, he represented to the lender that he personally met his cash-to-close obligations when in fact he knowingly paid these costs with funds supplied by conspirators.

Many of the straw buyers defaulted on their loans after the conspirators stopped making their mortgage payments on their behalf, causing millions of dollars in losses to lenders.

On March 31, 2014, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo were indicted in the Southern District of Florida for their alleged participation in this scheme. They have pleaded not guilty and trial is currently set for Sept. 8, 2014. The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case is being investigated by HUD-OIG and FHFA-OIG. The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.

A Phoenix man convicted after a jury trial last December of conspiracy and racketeering offenses for his involvement in a sophisticated cybercrime organization was sentenced today to serve 20 years in prison.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Special Agent in Charge Claude Arnold of Homeland Security Investigations (HSI) in Los Angeles made the announcement.

David Ray Camez, 22, also known as “Bad Man” and “doctorsex,” was sentenced by U.S. District Judge Andrew P. Gordon. Camez was convicted on Dec. 6, 2013, of one count of participating in a racketeer influenced corrupt organization and one count of conspiracy to participate in a racketeer influenced corrupt organization. In addition to his prison term, he was also sentenced to serve three years of supervised release and ordered to pay $20 million in restitution.

“Camez was a member of a vast criminal organization that facilitated rampant cyber fraud throughout the world,” said Acting Assistant Attorney General O’Neil.  “This organization is the new face of organized crime – a highly structured cyber network operated like a business to commit fraud on a global scale.  Members, like Camez, paid to tap into the network and gain control of highly sensitive information, like compromised credit card numbers and stolen identities.  Thanks to sophisticated law enforcement efforts, Camez will now pay for his crimes with decades in prison.”

“As shown in this case, cybercrime has grown into an industry and is rapidly overtaking traditional crime such as bank robbery,” said U.S. Attorney Bogden.  “Cybercrime was once viewed as the crime wave of the future but in reality, that threat is here now.  We will continue working with our international law enforcement partners on cases such as this to track and prosecute this new wave of thieves.”

“As this sentence demonstrates, cyber-criminals who purposely harm innocent Americans and compromise the world’s economic stability will be aggressively pursued, investigated and prosecuted – and ultimately receive the justice they deserve,” said HSI Special Agent in Charge Arnold.  “This case is a stellar example of how interagency law enforcement cooperation and teamwork can successfully bring down an entire organized criminal conspiracy.”

Camez was one of 39 charged in an indictment returned in January 2012. Seven others have pleaded guilty, two are scheduled for trial in June, and the rest are fugitives. Sixteen other defendants were also charged in the scheme in three separate indictments, and 14 have pleaded guilty to date.

The target of the investigation was an organization that called itself “Carder.su.” Investigation of the Carder.su organization began in March 2007, after the United States Secret Service, operating in conjunction with Homeland Security Investigations (HSI) and other federal, state and local law enforcement agencies who participate in the Southwestern Identity Theft and Fraud Task Force (SWIFT), began investigating a pattern of credit and debit card fraud. A special agent initiated an undercover investigation called Open Market and assumed the identity as a member of the organization when it was in its infancy.

The investigation determined that members of the Carder.su organization, known as “carders,” were involved in large scale trafficking of compromised credit card account data and counterfeit identifications and credit cards, as well as money laundering, narcotics trafficking and various types of computer crime. The organization operated an Internet web portal called a forum, where members could purchase the illicitly obtained data and share knowledge of various fraud schemes. A second forum was also created to vet incoming new members. The forums were generally hosted within the former Soviet Union and the upper echelon of the organization resides within the former Soviet Union. In July 2011, the organization had an estimated 5,500 members.

Members of the organization had different roles, including moderators who directed other members in carrying out activities; reviewers who examined and tested products, services and contraband; vendors who advertised and sold products, services and contraband; and members. Members were required to successfully complete a number of security features designed to protect the organization from infiltration by law enforcement or members of rival criminal organizations. Camez became a member of the organization under the name “Bad Man” on June 22, 2008. Camez also used the name “doctorsex.” During 2009 and 2010, the undercover special agent had multiple contacts with Camez in which Camez purchased counterfeit Nevada and Arizona driver’s licenses. Investigators also intercepted and seized a package shipped to Camez from Pakistan which contained counterfeit credit and gift cards. During a search of Camez’ home in Phoenix in May 2010, agents recovered counterfeit credit cards, equipment used to manufacture counterfeit credit cards, counterfeit U.S. currency and counterfeit identification documents. A search of Camez’ computer revealed software used to encode counterfeit credit cards and stolen identity information.

In addition to the U.S. Secret Service, HSI and members of the SWIFT Task Force in Las Vegas, NASA’s Jet Propulsion Laboratory’s Computer Crimes Division also provided assistance in the investigation. The case was prosecuted by Trial Attorney Jonathan Ophardt of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Kimberly M. Frayn and Andrew W. Duncan of the District of Nevada.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov .

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Marubeni Corporation, a Japanese trading company involved in the handling of products and provision of services in a broad range of sectors around the world, including power generation, was sentenced today for its participation in a scheme to pay bribes to high-ranking government officials in Indonesia to secure a lucrative power project.

Acting Assistant Attorney General David A. O’Neil 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.

Marubeni was sentenced by U.S. District Judge Janet B. Arterton in the District of Connecticut. Marubeni pleaded guilty on March 19, 2014, to one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and seven counts of violating the FCPA. The company signed a plea agreement in which it admitted its criminal conduct, agreed to maintain and implement an enhanced global anti-corruption compliance program and to cooperate with the department’s ongoing investigation, and agreed to pay an $88 million fine, which the court accepted in imposing the sentence. The plea agreement cites Marubeni’s refusal to cooperate with the department’s investigation when given the opportunity to do so, its lack of an effective compliance and ethics program at the time of the offense, and its failure to timely remediate as several of the factors considered by the department in determining the resolution.

According to the court filings, Marubeni and its employees, together with others, paid bribes to officials in Indonesia – including a high-ranking 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, for the company and its consortium partner to provide power-related services for the citizens of Indonesia. To conceal the bribes, Marubeni and its consortium partner retained two consultants purportedly to provide legitimate consulting services on behalf of the power company and its subsidiaries in connection with the Tarahan project. The primary purpose for hiring the consultants, however, was to use the consultants to pay bribes to Indonesian officials.

Also according to court filings, the first consultant retained by Marubeni and its co-conspirators received hundreds of thousands of dollars in his U.S. 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. E-mails between the 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.

As admitted in court documents, in the fall of 2003, Marubeni and its co-conspirators determined that the first consultant was not effectively bribing key officials at PLN. As a result, Marubeni and its consortium partner decided to reduce the first consultant’s commission from three percent of the total contract value to one percent, and pay the remaining two percent to a second consultant who could more effectively bribe officials at PLN. In an e-mail between two employees of Marubeni’s consortium partner, they discussed a meeting between Marubeni, an executive from the consortium partner, and the first consultant, stating that the consultant “committed to convince [the member of Parliament] that ‘one’ [percent] is enough.” Marubeni and its co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the purpose of bribing the Indonesian officials.

Frederic Pierucci, a current executive at Marubeni’s consortium partner, pleaded guilty on July 29, 2013, to one count of conspiring to violate the FCPA and one count of violating the FCPA. David Rothschild, a former vice president of regional sales at the consortium partner, pleaded guilty on Nov. 2, 2012 to one count of conspiracy to violate the FCPA. Lawrence Hoskins, a former senior vice president for the Asia region for the consortium partner, and William Pomponi, a former vice president of regional sales at the consortium partner, were charged in a second superseding indictment on July 30, 2013.

This 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. In addition, the department greatly appreciates the significant cooperation provided by its law enforcement counterparts in Indonesia at the Komisi Pemberantasan Korupsi (Corruption Eradication Commission), the Office of the Attorney General in Switzerland and the Serious Fraud Office in the United Kingdom.

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 .

The United States filed a complaint today to bar Laquanda O. Gilmore (aka Laquanda Garrott) and her company, L&g Associates LLC, from preparing federal tax returns for others, the Justice Department announced.  The complaint alleges that Gilmore has prepared returns that falsely claim fuel-tax and earned income tax credits.

According to the complaint, Gilmore has repeatedly and intentionally claimed bogus fuel-tax credits for her customers.  The fuel-tax credit is available only to taxpayers who operate farm equipment or off-highway business vehicles.  It is not available for vehicles driven on highways , nor is it available for fuel used for commuting to and from work.  The complaint alleges that Gilmore prepared returns that claimed absurdly large fuel-tax credits for taxpayers who worked at national retail businesses. 

The complaint also alleges that Gilmore repeatedly prepared tax returns that improperly claimed the earned income tax credit (EITC).  To claim the EITC, a taxpayer must have “earned income.”  According to the complaint, Gilmore repeatedly claimed that her customers earned income from wages or salaries, even though Gilmore did not attach any Forms W-2, which provide information about an employee’s income and tax withholdings, to those customers’ returns.  According to the complaint, Internal Revenue Service (IRS) records indicate that no Forms W-2 were issued to those customers in the years at issue.

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. 

WASHINGTON – The United States filed a complaint today to bar Laquanda O. Gilmore (aka Laquanda Garrott) and her company, L&g Associates LLC, from preparing federal tax returns for others, the Justice Department announced. The complaint alleges that Gilmore has prepared returns that falsely claim fuel-tax and earned income tax credits.

According to the complaint, Gilmore has repeatedly and intentionally claimed bogus fuel-tax credits for her customers. The fuel-tax credit is available only to taxpayers who operate farm equipment or off-highway business vehicles. It is not available for vehicles driven on highways, nor is it available for fuel used for commuting to and from work. The complaint alleges that Gilmore prepared returns that claimed absurdly large fuel-tax credits for taxpayers who worked at national retail businesses.

The complaint also alleges that Gilmore repeatedly prepared tax returns that improperly claimed the earned income tax credit (EITC). To claim the EITC, a taxpayer must have "earned income." According to the complaint, Gilmore repeatedly claimed that her customers earned income from wages or salaries, even though Gilmore did not attach any Forms W-2, which provide information about an employee's income and tax withholdings, to those customers' returns. According to the complaint, Internal Revenue Service (IRS) records indicate that no Forms W-2 were issued to those customers in the years at issue.

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.

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Four businessmen involved in the development, operation and ownership of restaurants, including Cadillac Ranch restaurants, in Ohio and elsewhere in the United States, pleaded guilty today to tax charges, the Justice Department and Internal Revenue Service (IRS) announced.

Joel Field from Marion, Ohio, Jon Field from Dublin, Ohio, Eric Schilder, of Marion, and Paul Butler, of Dublin, all pleaded guilty before Judge Edmund A. Sargus Jr. in U.S. District Court for the Southern District of Ohio today. 

Joel Field, 58, pleaded guilty to tax evasion, in which he admitted that he had an unpaid tax liability that exceeded $130,000 from tax years 1997 through 2001.  Joel Field was an owner and operator of Cadillac Ranch restaurants and bars.  From March 2004 through May 2009, when the IRS attempted to collect the outstanding amount of taxes owed by Joel Field, he provided false information to the IRS by failing to report assets and income.  Further, according to publicly filed documents, Joel Field transferred his rental properties, car and business into the names of his relatives in an effort to conceal his ownership from the IRS and to prevent the IRS from seizing assets.  Despite transferring these assets to nominees, Joel Field continued to control them and the income they generated. 

According to documents filed with the court, in 2008, the government initiated foreclosure proceedings against Joel Field’s personal residence in an effort to collect the approximately $319,000 he then owed the IRS.  After the government initiated foreclosure proceedings, Joel Field submitted more false information to the IRS, including the filing of false tax returns for tax years 2006 through 2009.  Furthermore, Joel Field caused his son to file false income tax returns for two years by causing his son to report income that actually belonged to Field in order to conceal his own income from the IRS.  Finally, Joel Field caused his attorney to send correspondence to the government wherein representations were made that falsely underreported the value of Joel Field’s restaurant.  In 2009, based on the false information provided, the government agreed to settle its foreclosure lawsuit against Joel Field’s home for $149,000 less than the amount he then owed the IRS in taxes, penalties and interest.  As part of the plea agreement, Joel Field agreed to pay $349,777 in restitution to the IRS. 

According to documents filed with the court, Jon Field, 58, pleaded guilty to a conspiracy to file false income tax returns for the years 2006 through 2010.  According to court documents, in 2003, Jon Field created JHF Property Holdings LLC, which was purportedly owned by his son, but which Jon Field used to operate the Cadillac Ranch and other restaurants.  For the years 2006 through 2010, Jon Field agreed with others to prepare and file false income tax returns with the IRS for Jon Field which falsely underreported the amount of income that he earned from his business ventures.  His tax returns for these five years failed to report at least $220,000 in income earned through JHF Property Holdings funds and other companies.  According to publicly filed documents, Jon Field diverted business funds for personal expenditures, including to make payments on his vehicles, to pay his taxes, to pay personal charges on credit cards and for cash withdrawals.  Jon Field’s false filings resulted in a tax loss of $174,458, and he agreed to pay restitution to the IRS according to his plea agreement. 

Eric Schilder, 52, pleaded guilty to filing a false income tax return for 2008.   According to publicly filed documents, Schilder participated in the design, construction and, ultimately, the marketing and management of several Cadillac Ranch restaurants and bars.  Schilder’s conduct caused a tax loss to the IRS of approximately $95,000.  

Paul Butler, 46, pleaded guilty to a conspiracy to defraud the United States.  Butler participated in the design, development, building and operation of Cadillac Ranch restaurants and bars.  According to public filings, Butler admitted that he amassed over $150,000 in unpaid taxes for the years 1996 through 2001.  When the IRS attempted to collect the funds in 2005, Butler admitted that, among other things, he and others created and provided to a false promissory note to the IRS.  Butler engaged in conduct, and caused others to engage in conduct, intended to obstruct the IRS from collecting the outstanding taxes that Butler owed. 

Joel Field faces a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release for his tax evasion charge.  Jon Field also faces a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release for his conspiracy charge.  Paul Butler also faces a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release for his conspiracy charge.  Eric Schilder faces a maximum sentence of three years in prison, a $250,000 fine and one year of supervised release for filing a false income tax return. 

The case was investigated by the IRS-Criminal Investigation Division and is being handled by Trial attorney Richard M. Rolwing for the Justice Department’s Tax Division.  Additional information about the Tax Division and its enforcement efforts may be found at the division website .  Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation website . 

A former owner and operator of a Florida-based airline fuel supply service company was sentenced today to serve 50 months in prison for participating in a scheme to defraud Illinois-based Ryan International Airlines, the Department of Justice announced.

Sean E. Wagner, the former owner and operator of Aviation Fuel International Inc. (AFI), was sentenced in the U.S. District Court for the Southern District of Florida in West Palm Beach to serve 50 months in prison and to pay $202,856 in restitution.  On Aug. 13, 2013, a grand jury returned an indictment against Wagner and AFI, charging them for their roles in a conspiracy to defraud Ryan. On March 6, 2014, Wagner pleaded guilty to one count of conspiracy to commit honest services wire fraud.   According to court documents, from at least as early as December 2005 through at least August 2009, Wagner and others at AFI made kickback payments to Wayne Kepple, a former vice president of ground operations for Ryan, totaling more than $200,000 in the form of checks, wire transfers, cash and gift cards in exchange for awarding business to AFI.  The charges against AFI were dismissed on Feb. 21, 2014.

 
Ryan provided air passenger and cargo services for corporations, private individuals and the U.S. government – including the U.S. Department of Defense and the U.S. Department of Homeland Security.

 
“Awarding government contracts in exchange for payoffs is a crime the Antitrust Division takes seriously,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Today’s sentence reaffirms the division’s commitment to vigorously prosecute individuals who engage in this behavior.”

“This sentencing highlights the continuing commitment of the DCIS to thoroughly investigate and bring to justice any companies or individuals who engage in fraudulent and corrupt practices that undermine the integrity of Department of Defense procurement programs,” said John F. Khin, Special Agent in Charge of the Defense Criminal Investigative Service Southeast Field Office.

As a result of the ongoing investigation, five individuals, including Wagner, have pleaded guilty and have been ordered to serve sentences ranging from 16 to 87 months in prison and to pay more than $780,000 in restitution.  An additional individual has pleaded guilty to obstructing the investigation and is currently awaiting sentencing. 

The investigation is being conducted by the Antitrust Division’s Washington Criminal I office and the U.S. Department of Defense’s Office of Inspector General’s Defense Criminal Investigative Service, with assistance from the U.S. Attorney’s Office for the Southern District of Florida.  Anyone with information concerning anticompetitive conduct in the airline charter services industry is urged to call the Antitrust Division’s Washington Criminal I office at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm.

U.S. District Judge James K. Bredar sentenced Reginald Martin, formerly an officer at Roxbury Correctional Institution (RCI) in Hagerstown, Maryland, to serve 12 months and one day in prison for his role in the assault of inmate Kenneth Davis.  RCI officers from three different shifts assaulted Davis in March 2008, in retaliation for a prior incident in which Davis struck an officer.  

Martin pleaded guilty on Jan. 9, 2014, to a deprivation of rights under color of law.  According to court documents filed in connection with his guilty plea, Martin acknowledged that he witnessed other RCI officers unlawfully assaulting Davis and that he failed to intervene and stop the assault.  Martin also admitted that this assault on March 9, 2008, was consistent with practices at RCI, where officers would use force to punish inmates who had engaged in misconduct.  Finally, Martin admitted that he and other officers tried to cover up their involvement in the assault of Davis.

“Every person in America has the right to be free from cruel and unusual punishment,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “The Justice Department will continue to protect this right by prosecuting correctional officers who violate the rights of inmates.”

To date, 16 current or former officers at RCI have been convicted in connection with the series of assaults that Davis suffered on March 8-9, 2008.  Lanny Harris, Philip Mayo, Jeremy McCusker, Walter Steele, Robert Harvey, Keith Morris, Dustin Norris, Ryan Lohr, Tyson Hinckle, Michael Morgan and Josh Hummerhave already been sentenced by U.S. District Judge Bredar.

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, with the assistance of Assistant U.S. Attorney Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.

Steven Joshua Dinkle, 28, former Exalted Cyclops of the Ozark, Alabama, chapter of the International Keystone Knights of the Ku Klux Klan (KKK), was sentenced today by Chief U.S. District Judge W. Keith Watkins to serve 24 months in prison to be followed by three years of supervised release for his role in a cross burning in 2009, announced the Justice Department and the U.S. Attorney’s Office for the Middle District of Alabama.

On Feb. 3, 2014, Dinkle pleaded guilty to hate crime and obstruction of justice charges related to the cross burning.  Specifically, he pleaded guilty to one count of conspiracy to violate housing rights, one count of criminal interference with the right to fair housing and two counts of obstruction of justice. 

According to documents filed with the court, Dinkle and one of his KKK recruits, Thomas Windell Smith, met at Dinkle’s home on May 8, 2009, and decided to burn a cross in a local African-American neighborhood.  Dinkle constructed a wooden cross about six feet tall, wrapped jeans and a towel around it to make it more flammable and loaded it into Smith’s truck.  Around 8:00 p.m., Dinkle and Smith drove to the African-American neighborhood in Ozark.  Dinkle unloaded the cross at the entrance to the community and dug a hole in the ground.  He poured fuel on the cross, stood it up in the hole in view of several houses and set it on fire.  Dinkle and Smith then drove away.

During sentencing, Chief U.S. District Judge Watkins said that it was clear that the purpose of Dinkle’s conduct was “to terrorize people in the community” and that his “message was one of intimidation and violence.”

When questioned by local investigators, Dinkle falsely denied his involvement in the incident and said that he had resigned his office and withdrawn from the KKK months before the cross burning.  When approached by the FBI, Dinkle again lied and told a special agent that he had been at home with his girlfriend when the cross burning occurred.  He further claimed that he did not know a person who was, in fact, one of his superiors in the KKK at the time of the cross burning. 

During the plea hearing, Dinkle admitted that in burning the cross, he intended to scare and intimidate residents of the African-American community by threatening the use of force against them.  He further admitted that he burned the cross because of the victims’ race and color and because they were occupying homes in that area.

“Defendant Dinkle chose to burn the cross at the very entrance to an African-American neighborhood so that anyone coming or going would see the fiery cross,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “He intended to intimidate the community’s residents in their own homes and neighborhood.  There is no place for such conduct in our society and the department will continue to prosecute these violent acts of hate.”

“It is sad that, in this day and age, people are still filled with such hate,” said U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.  “To act on such hate and burn a cross turns that hate into a crime which should not, and will not, be tolerated.  Prosecuting these type crimes will continue to be a priority of my office.”

Dinkle’s co-conspirator, Smith, pleaded guilty to one count of conspiracy to violate housing rights in December 2013, and he is scheduled to be sentenced on Aug. 19, 2014.  Dinkle’s mother, Pamela Morris, is charged with two counts of perjury arising out of the investigation into the cross burning.  Her trial is scheduled to begin Aug. 4, 2014.

This case was investigated by the FBI with the assistance of the Dale County Sheriff’s Office and the Ozark Police Department.  The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the Civil Rights Division.

ALICIA A.G. LIMTIACO, United States Attorney for Guam and the Northern Mariana Islands, announced that MICHAEL SAN NICOLAS SANTOS, aged 54, was sentenced today in the District Court of Guam, to serve 18 months in federal prison followed by three years of supervised release for transmitting bomb threats in interstate commerce.  Defendant was also ordered to pay a $100 special assessment fee and total restitution of $2,389.48 for distribution in part to Pho Saigon Restaurant, the Judiciary of Guam and the Guam Police Department.

Defendant pled guilty on November 14, 2013, to the offense of Maliciously Conveying False Information by Telephone in violation of 18 U.S.C. § 844(e).  On the mornings of September 26, 2013, October 10, 2013, and October 29, 2013, the defendant called the Guam Emergency 911 Center and stated to the effect that there was a bomb going to explode in the Dededo Mall.  On the last phone call, the defendant threatened and stated, “There is a bomb going down in Dededo Mall right now.  It is going to be going off.  Get those people out of the building.  In Dededo Mall right now.”

On the morning of each of the calls, the defendant purchased a new prepaid cellular phone and/or SIM card in the Mobil gas stations in Ysengsong Road, Dededo, and Route 16. The defendant made the September 26, 2013 and October 10, 2013 bomb threats from a park across the street from the Dededo Mall.  On the morning of October 29, 2013, federal law enforcement agents surveilled the defendant when he left his Yigo residence.  He was observed buying a prepaid cellular phone in the Mobil gas station in Route 16 in the vicinity of the Guam Revenue & Taxation building, driving around the park directly across the street from the Dededo Mall, and driving up Carnation Road and Villagomez Road where he made the third bomb threat. Special Agents from the Federal Bureau of Investigation (“FBI”) arrested the defendant later that morning when he returned to the Dededo Mall.  The defendant told them, among other things, that he called in the bomb threats on those days to avoid attending a small claims court hearing in the Small Claims Division, Superior Court of Guam, Northern Court Satellite which is located in the Dededo Mall.

The Dededo Mall also accommodates one restaurant, several food concession stands and retail businesses.

U.S. Attorney Limtiaco states, “All bomb threats are taken seriously.  To ensure the public's safety and security, law enforcement agencies will use their resources to determine the validity of each bomb threat. Offenders will be held accountable and prosecuted.”

The investigation was conducted by the FBI Joint Terrorism Task Force-Pacific (comprised of the FBI, Guam Police Department, U.S. Coast Guard Investigative Service), Guam Police Department, Guam Fire Department, Judiciary Courts of Guam Marshals Office, Guam Homeland Security/Office of Civil Defense, U.S. Navy Explosive Ordnance Disposal Mobile Unit 5, Detachment Marianas and the Department of Defense Joint Region Marianas. The case was handled by Assistant U.S. Attorney Marivic David.

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that ANTONETTE ELATICO PARR (“PARR”) was sentenced on Monday, May 12, 2014, by Chief Judge Frances Tydingco-Gatewood, in the District Court of Guam, to 21months incarceration, and three years of supervised release.

Co-defendants David Taimanglo Quichocho, Jr. and Dominica Bato Quichocho both pled guilty in December, 2012 to Conspiracy to Distribute Methamphetamine Hydrochloride in violation of Title 21 U.S.C. Section 841(a)(1). Defendant David Taimanglo Quichocho, Jr. ordered over five grams of methamphetamine hydrochloride from his sister, PARR, a California resident.  PARR concealed small amounts of methamphetamine hydrochloride in letters sent via First Class mail to Guam.   The letters containing the drug were picked up by David Taimanglo Quichocho, Jr. or his spouse, Dominica Bato Quichocho.  Notably, the letters, each containing approximately 1.88 grams of the drug were detected and intercepted by the United States Postal Investigative Service.

U.S. Attorney Limtiaco thanks the United States Postal Investigative Service for their thoroughness and vigilance in detecting drugs which are being mailed to Guam through the United States Postal System.

Jonathan Lynn Henery, 28, and Beau Edward Hansen, 30, both of Boise, Idaho, were indicted May 13, 2014, on federal hate crime charges for their racially motivated assault of an African-American man, the Justice Department’s Civil Rights Division and U.S. Attorney Wendy J. Olson for the District of Idaho announced.  An initial appearance date has not been set.

The indictment alleges that on or about Oct. 20, 2013, both men willfully caused bodily injury to an African American man based on the victim’s actual and perceived race and color.

The charge of hate crime based on race is a violation of the Matthew Shepard and James Byrd Jr. Hate Crime Prevention Act signed into law by President Barack Obama in 2009.  A violation of that statute is punishable by up to 10 years in prison, a maximum fine of $250,000 and up to three years of supervised release.

The case was investigated by the FBI and the Boise City Police Department.  The case is being jointly prosecuted by the U.S. Attorney’s Office for the District of Idaho and the Justice Department’s Civil Rights Division.

An indictment is a means of charging a person with criminal activity.  The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A federal grand jury returned a two count indictment against Brice Johnson, 19, of Springtown, Texas, charging him with willfully causing bodily injury to a person because of the actual or perceived sexual orientation of that person and with kidnapping, the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office of the Northern District of Texas and the FBI Dallas Division announced today.

On Feb. 19, 2014, a federal criminal complaint was unsealed charging Johnson with a hate crime.  The indictment charges Johnson with the same hate crime offense and further charges that Johnson’s actions included kidnapping.

According to the affidavit filed with the criminal complaint, in the early morning hours of Sept. 2, 2013, the adult male victim, identified as A.K., connected with Johnson through the cell phone application for MeetMe.com.  A.K.’s MeetMe.com page indicated he was a gay man, while Johnson’s page indicated he was not gay.  During their chat communications, Johnson said that he was interested in engaging in sexual activity with A.K. and he invited A.K. to his home.   Johnson gave A.K. his cell phone number and address and they exchanged text messages planning their sexual activity.

After A.K. showed up at the house, Johnson severely beat him, then put him into the trunk of A.K.’s car and drove him to a friend’s house.  Based on ligature marks on A.K.’s wrists, it appears that he was bound while he was in the trunk of the car.  Individuals at the home told Johnson to take A.K. to the hospital or they would call the police, and Johnson eventually drove A.K. to an Emergency Medical Services station in Springtown. 

A.K. was hospitalized for 10 days in Fort Worth, and he was diagnosed and treated for multiple skull and facial fractures.  The investigation revealed that on the night of the incident, Johnson saved A.K.’s cell phone number using a gay slur as a contact name and Johnson later stated that he was playing a prank on A.K. because of A.K.’s sexual orientation, again using a gay slur when referring to A.K.  According to the affidavit, A.K. said that he had no physical contact with Johnson prior to the attack.  

An indictment merely establishes probable cause and Johnson is presumed innocent unless proven guilty.  Each count carries a maximum statutory sentence of life in prison and a $250,000 fine. 

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

The owner and operator of a Tennessee salvage and demolition company, A&E Salvage Inc., pleaded guilty today in federal court in Greeneville, Tennessee, for conspiring to violate the Clean Air Act.

Mark Sawyer pleaded guilty before U.S. District Court Judge Greer for the Eastern District of Tennessee to one criminal felony count for conspiring to violate the Clean Air Act’s “work practice standards” salient to the proper wetting, stripping, bagging and disposal of asbestos. According to the charges, Sawyer, along with other co-conspirators, engaged in a multi-year scheme in which substantial amounts of regulated asbestos containing materials were improperly removed from components of the former Liberty Fibers Plant or were illegally left in place during demolition.

Sawyer faces up to five years in prison and a fine of up to $250,000 or twice the gross gain or loss to the victims.  Sawyer is the last of five charged co-defendants to plead guilty.  Sawyer, Eric Gruenberg, Nick Smith, Armida DiSanti and Milto DiSanti are due to be sentenced on Nov. 19, 2014.

Asbestos has been determined to cause lung cancer, asbestosis and mesothelioma, an invariably fatal disease.  The Environmental Protection Agency has determined that there is no safe level of exposure to asbestos.

This case was investigated by Special Agents of the Environmental Protection Agency’s Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Morris of the U.S. Attorney’s Office for the Eastern District of Tennessee and Senior Trial Attorney Todd W. Gleason of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division. 

WASHINGTON—Today, the Department of Justice and Office of the Director of National Intelligence released, in redacted form, a previously classified series of Foreign Intelligence Surveillance Court filings and orders from 2009-2010 concerning the collection of bulk telephony metadata under Section 215 of the USA Patriot Act. These documents relate to a robust interaction that occurred between the Department of Justice and a telecommunications service provider that included the provider’s review of prior FISC applications, orders and opinions, regarding lawful compliance with those orders. 

Motion to Unseal Records (Jan. 7, 2010) including prior FISC applications, orders and opinions, for the purpose of disclosing and discussing with the recipient the Section 215 order.

Joint Motion for Enlargement of Time (Jan. 8, 2010) allowed under FISC rules for the recipient if the Section 215 secondary order to file a petition challenging that order pursuant to 50 U.S.C. § 1861(f), filed by the government and the recipient of the secondary order.

FISC Order Granting Enlargement of Time (Jan. 8. 2010).

FISC Order Granting Motion to Unseal Records (Jan. 8, 2010).

Motion for Amended Secondary Order (Jan. 11, 2010) requesting that the FISC amend a secondary order to the recipient to expressly incorporate the findings of the FISC in three specific respects as described in the motion. This motion was granted Jan. 12, 2010, when the court issued an amended secondary order in the form proposed by the government.

Attorney General Eric Holder issued the following statement today on the planned departure of Deputy Director of Public Affairs Gina Talamona, who will begin work as the Communications Director of the Securities and Exchange Commission next month:

 
“For 27 years, Gina Talamona has been a tremendous asset to the Department of Justice and an exceptionally dedicated public servant. She’s been the backbone of our dedicated Office of Public Affairs team, providing leadership and sound guidance to Attorneys General and other leaders from administrations of both parties. Although I join my colleagues in congratulating Gina on her important new role at the Securities and Exchange Commission – and wish her nothing but the best – I will miss her wise counsel, her sense of humor, and her considerable contributions on behalf of the American people. She is a dear friend upon whom I have relied during all my time at the Department.”

Today, Attorney General Eric Holder met with campus leadership from eight Washington, D.C.-area colleges and universities: American University; Catholic University of America; Gallaudet University; Georgetown University; George Washington University; Howard University; Trinity University; and University of the District of Columbia, to discuss how administrations are addressing sexual assault on campus.

In recognition of the 20th anniversary of the Violence Against Women Act, the department’s Office of Violence Against Women (OVW) launched a campus tour from April 23-May 1 for Sexual Assault Awareness Month.  Senior officials from the Departments of Justice and Education visited 11 campuses across the country, including public and private universities, community colleges, historically black colleges, and faith-based and tribal-affiliated institutions.

During today’s discussion, convened at the Department of Justice, officials shared lessons learned and feedback from the campus tour.  Campus leaders shared their achievements and challenges in implementing effective prevention and intervention strategies and responses to address sexual assault, including student engagement, public education efforts, strong collaborations and a focus on campus culture. Justice officials also encouraged school leaders to take advantage of the assistance being provided by the government.  Department of Justice campus assistance includes specialized training for school officials and guidance on how to improve their investigative and adjudicative protocols.

President Obama and Vice President Biden took an unprecedented step this year in the Administration’s effort to address campus sexual assault by establishing the “White House Task Force to Protect Students from Sexual Assault.”  The Task Force was charged with sharing best practices, and increasing transparency, enforcement, public awareness and interagency coordination to prevent violence and support survivors.  At the end of April, the Task Force issued their first report, reflecting what they had heard in the many listening sessions that were held this year, and what the government can do in the short-term to better partner with academic institutions.

Since 1999, OVW has funded approximately 400 campus-based projects, totaling more than $139 million, to address domestic violence, dating violence, sexual assault and stalking on campuses.

Associate Attorney General Tony West, Acting Assistant Attorney General for Civil Rights Jocelyn Samuels, and OVW Principal Deputy Director Bea Hanson, as well as the Department of Education’s Jamienne Studley, Deputy Under Secretary of Education, and Seth Galanter, Principal Deputy Assistant Secretary, Office for Civil Rights, also participated in today’s meeting.  The roundtable discussion was organized in partnership with the DC Coalition Against Domestic Violence (DCCADV) University Leadership Initiative.

A patient recruiter who participated in a Medicare fraud scheme that totaled almost $14.5 million was sentenced in Detroit yesterday to serve 86 months in prison.

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

Richard Shannon, 41, was sentenced by U.S. District Judge Denise Page Hood in the Eastern District of Michigan. In addition to his prison term, Shannon was sentenced to serve three years of supervised release and was ordered to pay more than $1.6 million in restitution, jointly and severally with his co-defendants.

On Oct. 26, 2012, Shannon, a patient recruiter for a network of fraudulent home health care companies, was found guilty at trial of one count of conspiracy to commit health care fraud.

According to evidence presented at trial, Shannon and his co-conspirators caused the submission of false and fraudulent claims to Medicare through All American and Patient Choice, two Oak Park-based home health care companies, which purported to provide skilled nursing and physical therapy services to Medicare beneficiaries in the greater Detroit area.

The evidence showed that Shannon acted as a patient recruiter, paying Medicare beneficiaries to sign blank documents for physical therapy services that were never provided and/or medically unnecessary. The owners of Patient Choice and All American then paid physicians to sign referrals and other therapy documents necessary to bill Medicare. Physical therapists and physical therapist assistants would then create fake medical records using the blank, pre-signed forms obtained by Shannon and other patient recruiters to make it appear as if physical therapy services had actually been rendered.

Shannon recruited destitute beneficiaries from housing projects and soup kitchens in the Detroit area, obtaining their patient information in exchange for cash and promises of prescription narcotics prescribed by co-conspirator physicians.

This case was investigated by the FBI, HHS-OIG and the Internal Revenue Service and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case was prosecuted by Deputy Chief Gejaa Gobena, Assistant Chief Catherine Dick and Trial Attorney Niall O’Donnell of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged almost 1,900 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, has removed over 17,000 providers from the Medicare program since 2011.

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

Jeffrey Wayne Scott, 48, of Wilmington, North Carolina, pleaded guilty to tax evasion in Raleigh, North Carolina, the Justice Department and Internal Revenue Service (IRS) announced today.  Scott was indicted on Nov. 25, 2013, for five counts of personal income tax evasion and one count of filing a false corporate tax return.  He pleaded guilty to one count of willfully attempting to evade his personal income tax for tax year 2007.

According to court documents and court proceedings, Scott has owned and operated Greenville Loop Seafood (GLS), a seafood distribution company located in Wilmington, since 1995.  For tax years 2006 through 2010, Scott and his wife filed joint individual income tax returns.  Scott provided his return preparer with handwritten summaries of gross receipts and categorized expense items for the wholesale and retail fish distribution businesses as well as tax documents provided by financial institutions.  Scott, under penalty of perjury, reported that his taxable income for these five years ranged between $23,934 and $92,999, and paid only $91,800 in federal income taxes for this time period.  During these five years, however, the Scotts spent far in excess of this reported taxable income on personal expenditures.

According to court documents and court proceedings, between 2006 and 2010, the Scotts paid for nearly all of their living expenses with checks from GLS.  This included, among other things, utilities, insurance premiums, landscaping, home improvements, school fees and a country club membership.  They also purchased five vehicles totaling more than $200,000, a $100,000 boat and a $2.1 million waterfront home.  Scott also made a monthly transfer of $10,000 from GLS’ business account into a personal brokerage account.  After the purchase of their home in June 2009, Scott stopped transferring funds to the brokerage account, but instead used funds from GLS’ business account to pay the mortgage and related expenses.  Through a bank deposit and expenditure analysis, the IRS calculated that Scott failed to report taxable income for these five years in excess of $1,151,642 and owed at least $390,678 in additional taxes.  For the 2007 tax year, Scott failed to report $328,754 in taxable income with an additional tax due and owing of $113,967.

­­­­­­­­­­­­­­­­­­According to court documents and court proceedings, when first contacted by IRS-Criminal Investigation agents in June 2011, Scott falsely stated that he was letting friends stay in his second home rent free.  Furthermore, despite being aware that he was under criminal investigation, in November 2012, Scott filed a false 2011 GLS corporate income tax return claiming the painting of his personal residence, repair work by a plumber at his personal residence, and health bills related to his family dog as business expenses.

Chief U.S. District Judge James C. Dever III scheduled the sentencing for the term of court to begin Aug. 18, 2014.  Scott faces a statutory maximum prison term of five years and a maximum fine of $250,000.

This case was investigated by special agents of IRS-Criminal Investigation.  Assistant U.S. Attorney Susan B. Menzer and Trial Attorney Todd A. Ellinwood of the Justice Department’s Tax Division are prosecuting the case.

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

WASHINGTON – Jeffrey Wayne Scott, 48, of Wilmington, North Carolina, pleaded guilty to tax evasion in Raleigh, North Carolina, the Justice Department and Internal Revenue Service (IRS) announced today. Scott was indicted on Nov. 25, 2013, for five counts of personal income tax evasion and one count of filing a false corporate tax return. He pleaded guilty to one count of willfully attempting to evade his personal income tax for tax year 2007.

According to court documents and court proceedings, Scott has owned and operated Greenville Loop Seafood (GLS), a seafood distribution company located in Wilmington, since 1995. For tax years 2006 through 2010, Scott and his wife filed joint individual income tax returns. Scott provided his return preparer with handwritten summaries of gross receipts and categorized expense items for the wholesale and retail fish distribution businesses as well as tax documents provided by financial institutions. Scott, under penalty of perjury, reported that his taxable income for these five years ranged between $23,934 and $92,999, and paid only $91,800 in federal income taxes for this time period. During these five years, however, the Scotts spent far in excess of this reported taxable income on personal expenditures.

According to court documents and court proceedings, between 2006 and 2010, the Scotts paid for nearly all of their living expenses with checks from GLS. This included, among other things, utilities, insurance premiums, landscaping, home improvements, school fees and a country club membership. They also purchased five vehicles totaling more than $200,000, a $100,000 boat and a $2.1 million waterfront home. Scott also made a monthly transfer of $10,000 from GLS' business account into a personal brokerage account. After the purchase of their home in June 2009, Scott stopped transferring funds to the brokerage account, but instead used funds from GLS' business account to pay the mortgage and related expenses. Through a bank deposit and expenditure analysis, the IRS calculated that Scott failed to report taxable income for these five years in excess of $1,151,642 and owed at least $390,678 in additional taxes. For the 2007 tax year, Scott failed to report $328,754 in taxable income with an additional tax due and owing of $113,967.

According to court documents and court proceedings, when first contacted by IRS-Criminal Investigation agents in June 2011, Scott falsely stated that he was letting friends stay in his second home rent free. Furthermore, despite being aware that he was under criminal investigation, in November 2012, Scott filed a false 2011 GLS corporate income tax return claiming the painting of his personal residence, repair work by a plumber at his personal residence, and health bills related to his family dog as business expenses.

Chief U.S. District Judge James C. Dever III scheduled the term of court to begin Aug. 18, 2014. Scott faces a statutory maximum prison term of five years and a maximum fine of $250,000.

This case was investigated by special agents of IRS-Criminal Investigation. Assistant U.S. Attorney Susan B. Menzer and Trial Attorney Todd A. Ellinwood of the Justice Department's Tax Division are prosecuting the case.

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

Louisiana-Pacific Corp. (LP) abandoned its plan to acquire Ainsworth Lumber Co. Ltd., its close competitor in the sale of a type of manufactured wood-based panel called oriented strand board (OSB), after the Department of Justice expressed concerns about the transaction’s likely anticompetitive effects.  The department said that the transaction likely would have substantially lessened competition in the market for the production of OSB sold to customers in the Pacific Northwest and Upper Midwest regions of the United States.

 
According to the department, OSB is widely used in the construction and remodeling of homes and other buildings.  An increase in the price of OSB would likely result in significant harm to consumers in the Pacific Northwest and Upper Midwest by making it more expensive to purchase or remodel homes, the department said.

“The companies’ decision to abandon the transaction, which would likely have resulted in less competition and higher OSB prices, is a win for customers in the Pacific Northwest and the Upper Midwest,” said Renata B. Hesse, Deputy Assistant Attorney General of the Department of Justice’s Antitrust Division.  “As a result of the abandonment of this transaction, consumers will continue to benefit from Ainsworth’s presence as an independent competitive force in the OSB industry.”

 
LP and Ainsworth are two of only four principal producers selling OSB into the Pacific Northwest, and two of only three principal producers selling OSB into the Upper Midwest.  The proposed merger would have given the combined firm a 63 percent market share in the Pacific Northwest region of the United States and a 55 percent market share in the Upper Midwest. 

 
According to the department, the merger would have allowed LP to substantially increase its market share by acquiring one of the largest suppliers of OSB in the Pacific Northwest and Upper Midwest, while also eliminating the significant head-to-head competition between LP and Ainsworth in these regions, thereby enabling LP to better target its customers in these areas for price increases.  By gaining control over Ainsworth’s mills, LP would have been in a better position to restrict the amount of OSB supply available in these regions, and to coordinate output and price decisions with its few remaining principal competitors, driving prices above competitive levels.

 
During the course of its investigation of the transaction, the department’s Antitrust Division closely coordinated its investigation of the transaction with the merger review conducted by Canada’s Competition Bureau. 

 
“Cooperation among competition agencies around the world enables our agencies to more efficiently and effectively achieve our shared goals of enhancing competition and protecting consumers,” said Deputy Assistant Attorney General Hesse.  “The Antitrust Division and the Canadian Competition Bureau have a long history of working closely together, as reflected by the recent issuance of best practices for coordinating, among the Antitrust Division, the Canadian Competition Bureau and the Federal Trade Commission, the review of mergers affecting both the United States and Canada.”

LP is a Delaware corporation with headquarters in Nashville, Tennessee. In 2013, LP had net sales of $2.1 billion, with $1.1 billion coming from its OSB business.  Ainsworth is a Canadian corporation with its headquarters in Vancouver, British Columbia.  In 2013, Ainsworth had sales of $488 million CAD, all of which came from OSB production.

A California man pleaded guilty today in the District of Massachusetts for his role in a conspiracy to hack into the computerized cash registers of a number of Subway restaurants to fraudulently obtain more than $40,000 in gift cards.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Resident Agent in Charge Holly Fraumeni of the U.S. Secret Service in Manchester, New Hampshire, made the announcement.

Shahin Abdollahi, aka Sean Holdt, 46, of Lake Elsinore, California, pleaded guilty before U.S. District Judge Richard G. Stearns to one count of conspiracy to commit computer intrusion and wire fraud and one count of wire fraud. Sentencing is scheduled for Aug. 6, 2014. Abdollahi, along with his co-conspirator, Jeffrey Wilkinson, 37, of Rialto, California, was indicted on March 6, 2013. Wilkinson pleaded guilty on Feb. 27, 2014, and is scheduled for sentencing on May 28, 2014.

Prosecutors informed the court that had the case proceeded to trial, the government would have proven that Abdollahi owned Subway franchises in Southern California from 2005 to 2008 and later operated a California company called “POS Doctor,” which sold and installed point-of-sale (POS) computer systems to Subway restaurant franchises around the country.  POS systems are a type of computerized checkout register that allows merchants to manage customer purchases made by credit, debit and gift cards.

Beginning in approximately 2011, Abdollahi and Wilkinson conspired to remotely hack into POS systems in Subway restaurant franchises around the country.  Members of the conspiracy hacked into at least 13 Subway POS systems that Abdollahi sold through POS Doctor and fraudulently added at least $40,000 in value to Subway gift cards.  Abdollahi and Wilkinson used the fraudulent gift cards to make purchases at Subway, and Wilkinson also sold fraudulent gift cards to others using eBay and Craigslist.

The case is being investigated by the U.S. Secret Service. The case is being prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam J. Bookbinder of the District of Massachusetts.

The Justice Department’s Civil Division announced today that Electrolux Home Products Inc. (Electrolux), of Charlotte, North Carolina, has agreed to pay a civil penalty of $750,000 to settle allegations that it knowingly failed to report immediately to the U.S. Consumer Product Safety Commission (CPSC) a safety hazard associated with certain wall ovens sold to consumers.  Electrolux has also agreed to establish and maintain a compliance program with internal recordkeeping and monitoring systems to keep track of information about product safety hazards.

 
“Manufacturers and distributors of consumer products are required to report product defects and hazards to the Consumer Product Safety Commission immediately and there are penalties for those who fail to do so,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “We will continue to work with our partners at the CPSC to ensure that they can act promptly to protect consumers from injuries.”        

 
In a complaint filed on behalf of the CPSC in U.S. District Court for the Southern District of Georgia, the United States alleged that Electrolux became aware of incidents in which gas could build up in the oven during broiling and escape and ignite, causing burn and fire hazards to consumers.  Electrolux imported and distributed approximately 7,800 of the Kenmore ovens that were sold by Sears and other stores throughout the United States.

 
“CPSC will vigorously enforce the immediate reporting requirement found in the Consumer Product Safety Act,” said CPSC Acting Chairman Bob Adler.  “The federal reporting rules are aimed at protecting the safety of the American public.  Delay in reporting of product defects and hazards by manufacturers, distributors or retailers can result in civil penalties and other measures designed to ensure consumer safety.”

 
Under the Consumer Product Safety Act (CPSA), manufacturers, distributors, and retailers are required to report product hazards to the CPSC.  A knowing violation of the CPSA subjects a firm to civil penalties.  The United States alleged that between February 2006 and November 2007, Electrolux knew of 22 consumer reports of flames shooting out of the oven when the broiler was on.  The incidents resulted in consumer injuries ranging from singed hair to facial burns.  The United States alleged that Electrolux failed to immediately report hazards with the oven, despite the fact that Frigidaire Canada, Electrolux’s sister company, identified the defective and hazardous nature of the ovens in January 2005 and implemented a design change to fix the defect in March 2006. 

 
“Public safety is a paramount concern,” said United States Attorney, Southern District of Georgia Edward J. Tarver.  “The United States Attorney’s Office must and will continue to work together with the CPSC to protect consumers.”

During the relevant time period, Electrolux’s principal place of business was in Augusta, Georgia.  A recall of the ovens was announced in 2008.  In agreeing to settle this matter, Electrolux has not admitted that it knowingly violated the CPSA.

 
The matter is being handled by the Department of Justice’s Consumer Protection Branch and the U.S. Attorney’s Office for the Southern District of Georgia, on behalf of the Consumer Product Safety Commission.

Titanium Metals Corporation (TIMET), one of the world’s largest producers of titanium parts for jet engines, has agreed to pay a record $13.75 million civil penalty and perform an extensive investigation and cleanup of potential contamination stemming primarily from the unauthorized manufacture and disposal of PCBs (polychlorinated biphenyls) at its manufacturing facility in Henderson, Nevada, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.

The penalty is the largest ever imposed for violations of the Toxic Substances Control Act (TSCA) at a single facility. TIMET will pay an additional $250,000 for violations related to illegal disposal of hazardous process wastewater, in violation of the Resource Conservation and Recovery Act (RCRA).

Under the settlement, EPA expects that the settlement will result in the removal of approximately 84,000 pounds of PCB-contaminated waste from the environment each year, and will prevent the improper disposal of 56 million pounds of hazardous waste each year.

“This settlement holds TIMET fully accountable for the period of its unauthorized manufacture and handling of harmful PCBs at the Henderson facility,” said Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division. “It will also result in substantial environmental cleanup and protection for the benefit of residents of the area , now and in the future .”

“This record penalty reflects EPA’s commitment to protect communities by reducing pollution from the mineral sector,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement ensures TIMET complies with the law and takes important steps to build transparency in the investigation and remediation of this facility.”

In addition to paying the penalty and performing the investigation and cleanup, the settlement requires TIMET to electronically submit monitoring data biannually to EPA for three years showing that it is appropriately managing any PCBs it generates. TIMET has also agreed to allow the Nevada Division of Environmental Protection (NDEP) to make public TIMET’s EPA-approved work plans and completed work reports through a dedicated website.

The company has already spent approximately $6 million on investigation, site cleanup and compliance measures to address the potential contamination. This work has included extensive sampling; draining and relining of a surface impoundment; analyzing the extent of PCB contamination in its solid waste landfill; removing PCB waste from that landfill; and decontaminating processing equipment. In addition, TIMET estimates that it will spend at least $1 million to complete the work required by the settlement.

TIMET processes titanium from rutile ore at its 108-acre manufacturing facility at the Black Mountain Industrial (BMI) Complex in Henderson. This process generates hazardous waste and PCBs. In the complaint, the government alleged that EPA inspections conducted in 2005, 2006 and 2008 revealed that TIMET had been unlawfully manufacturing PCBs as a by-product of its titanium manufacturing process, without an exclusion from TSCA’s ban. The 2008 EPA inspection also revealed that the company had disposed of PCB-contaminated waste in a solid waste landfill and a trench at the plant. The complaint further alleges that, on several occasions during 2005 and 2007, the company had unlawfully disposed of acidic, corrosive hazardous process wastewater into an unpermitted surface impoundment at the facility, in violation of RCRA.

Since 2007, the company has been working with EPA to bring the facility into compliance. TIMET has taken steps to reduce significantly the amount of PCBs it generates, manage appropriately the PCBs it does generate, and TIMET already has corrected the other regulatory violations cited in the complaint. TIMET is now in the process of documenting that it qualifies for an exclusion from TSCA’s ban on the manufacture of PCBs. As a part of that process, TIMET will provide required documentation to certify to EPA that it is in compliance with TSCA requirements governing the manufacture and disposal of PCBs.

TIMET was purchased by Precision Castparts Corporation in 2012. Both companies have worked with EPA to achieve compliance and to clean up the operations. The EPA and NDEP will continue to oversee multiple cleanup efforts at the facility and in the BMI Complex.

PCBs are human-made organic chemicals that were widely used in paints, construction materials, plastics, and electrical equipment prior to 1978. PCBs, which are probable carcinogens, have been banned in the United States for the last 30 years, except for specific uses authorized by regulations. When released into the environment, PCBs can persist for decades because they do not break down through natural processes. Exposure to PCBs has been demonstrated to cause cancer, as well as a variety of other adverse health effects on the immune system, reproductive system, nervous system, and endocrine system.

This settlement is part of EPA’s nationwide enforcement initiative to reduce pollution from mineral processing operations. Because mining and mineral processing facilities have the potential to generate large volumes of toxic and hazardous waste, the agency’s goal is to reduce the risk to human health and the environment by ensuring wastes from these facilities are properly managed.

TIMET, headquartered near Philadelphia, has been supplying nearly one-fifth of the world’s titanium demand since 1950. The company’s Henderson plant, which has been in operation since 1950, is one of the largest industrial facilities in the state. TIMET is a wholly-owned subsidiary of Precision Castparts Corporation, a worldwide manufacturer of complex metal components and products based in Portland, Oregon.

The consent decree, lodged in the U.S. District Court for the District of Nevada, is subject to a 30-day public comment period and approval by the federal court. The consent decree can be viewed at www.justice.gov/enrd/Consent_Decrees.html .

For more information on the settlement: http://www2.epa.gov/enforcement/timet-settlement

# # #
 

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that RAMACHANDRAN VADIVELLO aka VICRAAMA SARADA aka VIC RAMA (“VIC RAMA”), was sentenced today in the District Court of Guam by Chief Judge Frances Tydingco-Gatewood, to six months home confinement followed by five years probation.  VIC RAMA was also ordered to pay restitution to the victims in this case in the amount of $117,197.29.

Defendant VIC RAMA pled guilty on March 26, 2013, to the offenses of Mail Fraud, in violation of 18 U.S.C. § 1341, Visa Fraud, in violation of 18 U.S.C. § 1546(a), and Conspiracy to Commit Money Laundering, in violation of 18 U.S.C. § 371.

Defendant VIC RAMA is the owner of Transrama Guam, Inc., a construction company on Guam.   VIC RAMA petitioned the Guam Department of Labor to hire ten (10) highly skilled H-2B alien workers from Malaysia and Indonesia.  VIC RAMA misrepresented to the Guam Department of Labor that the H-2B alien workers would work as heavy equipment mechanics and carpenters on Guam, and that they would be paid the prevailing wage rates.  Based on VIC RAMA’S representations, the Department of Labor and the Governor of Guam approved the employment of the H-2B workers.  The U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services then issued visas permitting the H-2B workers entry to work on Guam for one year.

Rather than employing the H-2B alien workers as heavy equipment mechanics and carpenters, VIC RAMA assigned the workers to perform manual labor which included irrigation work, landscaping and painting at the Leo Palace Resort.  VIC RAMA also withheld full salaries from the alien workers and farmed the workers out to another local construction company, in violation of the terms of their admission to Guam.

U.S. Attorney Limtiaco states, “The U.S. Attorney’s Office is committed to holding accountable those defendants who attempt to erode the public’s trust in our government.   Cases involving the abuse of H-2B alien workers and the H-2B approval process, are frauds committed against both local and federal government agencies.  The U.S. Attorney’s Office will prosecute these cases and will make all efforts to restore the victim’s losses.”

The investigation was conducted by Special Agents with the U.S. Department of Homeland Security, Homeland Security Investigations, and the Internal Revenue Service – Criminal Investigation Section.  The case was handled by Assistant U.S. Attorney Rosetta SanNicolas.

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that DAVID QUICHOCHO UNCANGCO, JR., was sentenced today by Chief Judge Frances Tydingco-Gatewood in the District Court of Guam, to 117 months incarceration followed by five years of supervised release.  Defendant was also ordered to pay restitution to Submarina California Subs and Imma Mart.

Defendant UNCANGCO pled guilty on December 11, 2013, to the offenses of Hobbs Act Robbery in violation of Title 18 U.S.C. § 1951, and to Use of a Firearm During a Crime of Violence, in violation of Title 18 U.S.C. § 924(c)(1)(a).

On July 10, 2012, UNCANGCO entered Imma Mart, a retail store in Yigo, Guam.  He pointed a silver Smith and Wesson .38 caliber revolver at the cashier and demanded money.  The cashier handed over approximately $100 in cash to UNCANGCO who then fled the store.  The robbery was captured on video surveillance.

Three days later, UNCANGCO approached a cashier at the Submarina California Subs store in Hagatña.  He pointed a Smith and Wesson .38 caliber firearm at the cashier and demanded money.   UNCANGCO forcibly took a Bank of Guam money bag containing approximately $1,200 cash and receipts from the cashier.  Defendant then fled the scene in a Toyota pickup truck.

Law enforcement recovered the Smith and Wesson .38 caliber firearm, fifty rounds of .38 caliber ammunition and the Bank of Guam money bag from the Toyota pickup truck.

U.S. Attorney Limtiaco states, “The use of firearms to commit violent crimes places innocent civilians and the community at great risk of harm.  People who use firearms to commit crimes of violence will face aggressive prosecution and will receive significant jail time.”

U.S. Attorney Limtiaco noted that this prosecution is part of the U.S. Department of Justice’s Project Safe Neighborhood (PSN) Initiative, a nationwide commitment to aggressively prosecute defendants who engage in violent crime, drug distribution and gang involvement. The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Guam Police Department. The case was handled by Assistant U.S. Attorney Rosetta San Nicolas.

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Defendant BRIAN LEON GUERRERO, age 25, from Tamuning, was sentenced on May 13, 2014, in the District Court of Guam by Chief Judge Ramona Manglona, for the offense of Dealing in Counterfeit United States Obligations and Securities, for his role in passing a counterfeit fifty dollar bill on October 24, 2013.  LEON GUERRERO was sentenced to a three-year probationary period, and ordered to get substance abuse treatment and obtain a high school diploma or GED.  Defendant was also ordered to pay $500 restitution, a $100 special assessment fee, and to perform 200 hours of community service. Three co-defendants remain to be sentenced.

Credit for the investigation of this case is given to the U.S. Secret Service, Guam Police Department and the Micronesia Mall Security.  The case was prosecuted by Assistant U.S. Attorney Clyde Lemons.

WASHINGTON—Speaking in a video message posted on the Justice Department’s website, Attorney General Eric Holder on Wednesday called for an end to the excessive use of solitary confinement for youth that suffer from mental illness.  Attorney General Holder said the practices can have lasting, substantial effects on young people that could result in self-harm or, in some cases, even suicide. 

“Solitary confinement can be dangerous, and a serious impediment to the ability of juveniles to succeed once released,” Attorney General Holder said.  “At a minimum, we must work to curb the overreliance on seclusion of youth with disabilities.”
As a result of these unhealthy practices that violate the Violent Crime Control and Law Enforcement Act and the Civil Rights of Institutionalized Persons Act (CRIPA), the Justice Department’s Civil Rights Division sought a federal court order temporarily restraining the Ohio Department of Youth Services (DYS) from unlawfully secluding boys with mental health needs in its juvenile correctional facilities.

Last February, the Civil Rights Division also took the rare but necessary step of filing a statement of interest addressing the use of excessive reliance on solitary confinement for disabled youth in Contra Costa County, California.  Young people in these detention centers, including those with disabilities, were allegedly held in solitary confinement for up to 23 hours a day, often with no human interaction at all.

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

“Across the country, far too many juvenile detention centers see isolation and solitary confinement as an appropriate way to handle challenging youth, in particular youth with disabilities.  But solitary confinement can be dangerous, and a serious impediment to the ability of juveniles to succeed once released.

“In a study released last year by the Office of Juvenile Justice and Delinquency Prevention, 47 percent of juvenile detention centers reported locking youth in some type of isolation for more than four hours at a time.  We have received reports of young people who have been held in solitary confinement for up to 23 hours a day, often with no human interaction at all.  In some cases, children were held in small rooms with windows that were barely the width of their own hands.

“This is, to say the least, excessive.  And these episodes are all too common.

“This practice is particularly detrimental to young people with disabilities – who are at increased risk under these circumstances of negative effects including self-harm and even suicide.  In fact, one national study found that half of the victims of suicides in juvenile facilities were in isolation at the time they took their own lives, and 62 percent of victims had a history of solitary confinement. 

“Let me be clear, there may be times when it becomes necessary to remove a detained juvenile from others in order to protect staff, other inmates, or the juvenile himself from harm.  However, this action should be taken only in a limited way where there is a valid reason to do so, and for a limited amount of time; isolated juveniles must be closely monitored, and every attempt must be made to continue educational and mental health programming while the youth is in isolation. 
“At a minimum, we must work to curb the overreliance on seclusion of youth with disabilities.  And at the Department of Justice, we are committed to working with states to do this going forward.

“We must ensure in all circumstances – and particularly when it comes to our young people – that incarceration is used to rehabilitate, and not merely to warehouse and forget.  Our nationwide effort to end the unnecessary or excessive seclusion of youth with disabilities will not be completed solely with one settlement or court filing.  But as a department, we are dedicated – and as Attorney General, I am committed – to doing everything possible to ensure the effectiveness and integrity of our criminal and juvenile justice system.  In the days ahead, we will continue to make good on our commitment to the best practices of law enforcement and the highest ideals of our nation.”

The full video message is available at http://www.justice.gov/agwa.php. 

Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in six cities has resulted in charges against 90 individuals, including 27 doctors, nurses and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $260 million in false billings.

Attorney General Holder and Secretary Sebelius were joined in the announcement by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, FBI Assistant Director Joseph Campbell, U.S. Department of Health and Human Services (HHS) Inspector General Daniel R. Levinson and Deputy Administrator and Director of the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity Shantanu Agrawal.

This coordinated takedown is the seventh national Medicare fraud takedown in Strike Force history. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, Strike Force operations in nine locations have charged almost 1,900 defendants who collectively have falsely billed the Medicare program for almost $6 billion.  In addition, CMS, working in conjunction with HHS-OIG, has suspended enrollments of high-risk providers in five Strike force locations and has removed over 17,000 providers from the Medicare program since 2011.

The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Almost 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units and other federal, state and local law enforcement agencies participated in the takedown.

“Medicare is a sacred compact with our nation’s seniors, and to protect it, we must remain aggressive in combating fraud,” said Attorney General Holder. “This nationwide Medicare Strike Force takedown represents another important step forward in our ongoing fight to safeguard taxpayer resources and to ensure the integrity of essential health care programs. Department of Justice will not tolerate these activities.  And we will continue working alongside the Department of Health and Human Services – as well as federal, state, and local partners – to use every appropriate tool and available resource to find, stop, and punish those who seek to take advantage of their fellow citizens.”

“The Affordable Care Act has given us additional tools to preserve Medicare and protect the tens of millions of Americans who rely on it each day,” said Secretary Sebelius.  “By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars.  Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price. We will protect a sacred trust and an earned guarantee.”

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment and pharmacy fraud.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided. In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit approximately $260 million in fraudulent billings.

“Today, across the nation, scores of defendants were arrested for engaging in hundreds of millions of dollars in health care fraud,” said Acting Assistant Attorney General O’Neil.  “Among the defendants charged were 27 medical professionals, including 16 doctors. The crimes charged represent the face of health care fraud today – doctors billing for services that were never rendered, supply companies providing motorized wheelchairs that were never needed, recruiters paying kickbacks to get Medicare billing numbers of patients.  The fraud was rampant, it was brazen, and it permeated every part of the Medicare system.  But law enforcement continues to strike back.  Using cutting-edge, data-driven investigative techniques, we are bringing fraudsters to justice and saving the American taxpayers billions of dollars.  Overall, since its inception, the Department of Justice’s Medicare Fraud Strike Force has charged nearly 1,900 individuals involved in approximately $6 billion of fraud.  We are committed to using every tool at our disposal to prevent, deter, and prosecute health care fraud.”

“We all feel the effects of health care fraud,” said FBI Assistant Director Campbell.  “It leads to higher health care costs and makes it harder for seniors and those who are ill to get the care they need.  The FBI and our law enforcement partners are committed to preventing and prosecuting health care fraud at all levels.  But we need the public’s help.  Take the time to be aware of fraud and call law enforcement if you see anything suspicious included in the billings to your insurance, Medicare, or Medicaid or have any unusual encounters with health care providers.  We can work together to ensure your hard-earned dollars are used to care for the sick and not to line the pockets of criminals.”

“ Today's arrests demonstrate the effectiveness of our Strike Forces in combating Medicare and Medicaid fraud,” said HHS Inspector General Levinson.  “Through seamless teamwork, our agents and law enforcement partners bring lawbreakers to justice, protect beneficiaries and recover stolen taxpayer funds.”

“ Fraud can inflict real harm on Medicare beneficiaries and CMS is committed to working with our law enforcement partners to get criminals behind bars and out of the Medicare program as swiftly as possible,” said CMS Program Integrity Deputy Administrator Agrawal. “Today’s actions represent further consequences for bad actors, many of whom CMS had already stopped paying, or even kicked out of the program. Fundamentally, this is about protecting the well-being of our beneficiaries and the investment of taxpayer dollars.”

In Miami, a total of 50 defendants were charged today and yesterday for their alleged participation in various fraud schemes involving approximately $65.5 million in false billings for home health care and mental health services, and pharmacy fraud. In one case, two defendants were charged in connection with a $23 million pharmacy kickback and laundering scheme. Court documents allege that the defendants solicited kickbacks from a pharmacy owner for Medicare beneficiary information, which was used to bill for drugs that were never dispensed. The kickbacks were concealed as bi-weekly payments under a sham services contract and were laundered through shell entities owned by the defendants.

Eleven individuals were charged by the Houston Medicare Strike Force. Five Houston-area physicians were charged with conspiring to bill Medicare for medically unnecessary home health services. According to court documents, the defendant doctors were paid by two co-conspirators to sign off on home health care services that were not necessary and often never provided.

Eight defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $32 million. In one case, a doctor was charged for causing almost $24 million in losses to Medicare through his own fraudulent billing and referrals for durable medical equipment, including over 1,000 expensive power wheelchairs, and home health services that were not medically necessary and frequently not provided.

In Detroit, seven defendants were charged for their roles in fraud schemes involving approximately $30 million in false claims for medically unnecessary services, including home health services, psychotherapy and infusion therapy. In one case, four individuals, including a doctor, were charged in a sophisticated $28 million fraud scheme, where the physician billed for expensive tests, physical therapy and injections that were not necessary and not provided. Court documents allege that when the physician’s billings raised red flags, he was put on payment review by Medicare. He was allegedly able to continue his scheme and evade detection by continuing to bill using the billing information of other Medicare providers, sometimes without their knowledge.

In Tampa, Florida, seven individuals were charged in a variety of schemes, ranging from fraudulent physical therapy billings to a scheme involving millions of dollars in physician services and tests that never occurred . In one case, five individuals were charged for their alleged roles in a $12 million health care fraud and money laundering scheme that involved billing Medicare using names of beneficiaries from Miami-Dade County for services purportedly provided in Tampa area clinics, 280 miles away.  The defendants then allegedly laundered the proceeds through a number of transactions involving several shell entities.

In Brooklyn, New York, the Strike Force announced an indictment against Syed Imran Ahmed, M.D., in connection with his alleged $85 million scheme involving billings for surgeries that never occurred; Dr. Ahmed had been arrested last month and charged by complaint. Dr. Ahmed has charged with health care fraud and making false statements. In addition, the Brooklyn Strike Force charged six other individuals, including a physician and two billers who allegedly concocted a $14.4 million scheme in which they recruited elderly Medicare beneficiaries and billed Medicare for medically unnecessary vitamin infusions, diagnostic tests and physical and occupational therapy supposedly provided to these patients.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Eastern District of New York, the Southern District of Texas, the Central District of California, the Middle District of Louisiana, the Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.

A complaint or indictment is merely an accusation, and defendants are presumed innocent unless and until proven guilty.

To learn more about HEAT, go to: www.stopmedicarefraud.gov .

Court documents associated with this press release are available at: http://www.justice.gov/opa/mfsf-pc-2014. html

Officials from the Justice Department, Health and Human Services and other law enforcement partners will hold a press conference TODAY, TUESDAY, MAY 13, 2014, at 2:00 p.m. EDT, to announce Medicare Fraud Strike Force law enforcement actions in Miami and throughout the nation.

WHO:             David A. O’Neil, Acting Assistant Attorney General of the Criminal

Division

Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida

Tyler Smith, Assistant Inspector General of the HHS Office of Inspector General (HHS-OIG)

George Piro, Special Agent in Charge for FBI’s Miami Division

Shantanu Agrawal M.D., Deputy Administrator and Director for Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity

James Mann, Deputy Director of the Medicaid Fraud Control Unit for the Florida Attorney General’s Office

WHAT:          Press conference announcing Medicare Fraud Strike Force actions

WHEN:          TODAY, TUESDAY, MAY 13, 2014

              2:00 p.m. EDT

WHERE:        United States Attorney’s Office

Southern District of Florida

Second Floor, Media Room

99 N.E. 4th Street

Miami FL 33132                                                                 

                        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 Annette Castillo at (305) 961-9100.