District Not Recorded

Lowe’s Home Centers, one of the nation’s largest home improvement retailers, has agreed to implement a comprehensive, corporate-wide compliance program at its more than 1,700 stores nationwide to ensure its contractors minimize lead dust from home renovation activities, as required by the federal Lead Renovation, Repair and Painting (RRP) Rule, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. The company will also pay a $500,000 civil penalty, which is the largest ever for violations of the RRP Rule.

The settlement stems from violations, discovered by EPA inspectors, of the RRP Rule’s recordkeeping and work practice standards at private homes that had been renovated by Lowe’s contractors. EPA enforces the RRP and other lead rules to protect children and others who are vulnerable to exposure to lead dust that can cause lead poisoning.

“Today’s settlement requires Lowe’s to institute a robust, nationwide program at its more than 1,700 stores nationwide to ensure that the contractors it hires to perform renovation projects, like window and carpet installation, are properly certified and adhere to practices that help prevent lead contamination in customers’ homes,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “This action, the first of its kind to address lead safe work practices on a system-wide basis, will help prevent children’s exposure to lead in communities across the nation by raising home improvement contractors’ awareness of EPA’s lead safety regulations and contributing to a culture of compliance.”

“Today’s settlement sends a clear message to all contractors and the firms they hire: Get lead certified and comply with the law to protect children from exposure to dangerous lead dust,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Lowe’s is taking responsibility for the actions of the firms it hires, and EPA expects other contractors to do the same.”

“Protecting our most valuable assets, our children, is something that I will always do,” said Stephen R. Wigginton, U.S. Attorney for the Southern District of Illinois.  “This settlement will ensure that not only children in southern Illinois, but children throughout the United States will be better protected from the known hazards associated with lead exposure.  I commend Lowe’s for taking responsibility and entering into this agreement.”

EPA discovered the violations through a review of records from completed renovations performed by contractors hired by the following Lowe’s stores: Alton, Ill.; Kent and Trotwood, Ohio; Bedford, N.H.; Southington, Conn.; South Burlington, Vt.; Rochester, N.Y.; Savannah and Lebanon, Tenn.; Boise, Idaho Falls and Nampa, Idaho; and Muldoon, Alaska.

The government complaint alleged that Lowe’s failed to provide documentation showing that its contractors had been certified by EPA, had been properly trained, had used lead-safe work practices, or had correctly used EPA-approved lead test kits at renovation sites. Additionally, EPA’s investigation found that Lowe’s contractors had failed to ensure that work areas had been properly contained and cleaned during renovations at three homes. EPA’s investigation was prompted by tips and complaints submitted by the public.

In addition to the civil penalty, Lowe’s must implement a comprehensive compliance program to ensure that the contractors it hires to perform work for its customers comply with the RRP Rule during renovations of any child-occupied facilities, such as day-care centers and schools, and any housing that was built before 1978. For these projects, Lowe’s must contract with only EPA-certified renovators, ensure they maintain certification, and ensure they use lead safe work practices checklists during renovations. In addition, Lowe’s must suspend anyone that is not operating in compliance with the rule, investigate all reports of potential noncompliance and ensure that any violations are corrected.

The RRP Rule, which implements the federal Toxic Substances Control Act, is intended to ensure that owners and occupants of housing built before 1978, as well as any child-occupied facilities, receive information on lead-based paint hazards before renovations begin, and that individuals performing such renovations are properly trained and certified by EPA and follow specific work practices to reduce the potential for lead-based paint exposure. Home improvement companies such as Lowe’s that contract with renovators to perform renovation work must ensure that those contractors comply with all of the requirements of the RRP Rule.

Lead-based paint was banned in 1978 but still remains in many homes and apartments across the country. Lead dust hazards can occur when lead paint deteriorates or is disrupted during home renovation and remodeling activities. Lead exposure can cause a range of health problems, from behavioral disorders and learning disabilities to seizures and death, putting young children at the greatest risk because their nervous systems are still developing.

In February 2014, EPA announced enforcement actions that require 35 home renovation contractors and training providers to take additional steps to protect communities by minimizing harmful lead dust from home renovation activities, as required by the RRP Rule. Those settlements generated a total of $274,000 in civil penalties.

Renovators that are certified under EPA’s RRP Rule are encouraged to display EPA’s “Lead-Safe” logo on worker’s uniforms, signs, websites and other material, as appropriate. Consumers can protect themselves by looking for the logo before hiring a home renovator.

Lowe’s operates over 1,700 stores throughout the U.S., with over 120 additional stores located in Canada and Mexico. Lowe’s Home Centers, LLC, formerly known as Lowe’s Home Centers Inc. and Lowe’s HIW Inc., is headquartered in Mooresville, N.C.

The consent decree was lodged in the U.S. District Court for the Southern District of Illinois. Notice of the lodging of the consent decree will appear in the Federal Register allowing for a 30-day public comment period before the consent decree can be entered by the court as final judgment. The consent decree will available for viewing at www.justice.gov/enrd/Consent_Decrees.html .

More information about today’s settlement: http://www2.epa.gov/enforcement/lowes-home-centers-llc-settlement

More information about related settlements: http://yosemite.epa.gov/opa/admpress.nsf/2467feca60368729852573590040443d/383445d9a21d283f85257c83005a24ce!OpenDocument&Highlight=2,lead

More information about the RRP Rule and how contractors can get certified: www.epa.gov/lead

Related Materials:

Lowes Complaint
Lowes Consent Decree

Two leaders of the Armenian Power gang were found guilty today by a federal jury in Los Angeles for their participation in a racketeering conspiracy that included extortion, bank fraud targeting elderly bank customers and a sophisticated credit and debit card skimming scheme that stole account numbers and personal identification numbers (PINs) from thousands of people who used their cards at 99 Cents Only Stores throughout Southern California.

Armenian Power leaders Mher “Capone” Darbinyan and Arman “Horse” Sharopetrosian were each found guilty for their roles in a racketeering conspiracy, and an associate of the gang, Rafael Parsadanyan, was found guilty for his role in the 99 Cents Only Stores skimming scheme.

Acting Assistant Attorney General David O’Neil of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement following a four-week jury trial before United States District Judge R. Gary Klausner of the Central District of California.

Darbinyan, 38, of Valencia, was found guilty of 57 criminal counts, including racketeering conspiracy, extortion conspiracy, extortion, bank fraud, access device fraud conspiracy, aggravated identity theft and possession of a firearm by a convicted felon. According to the evidence presented at trial, Darbinyan was a powerful leader of Armenian Power who operated a sophisticated bank fraud scheme that used middlemen and runners to deposit and cash hundreds of thousands of dollars in fraudulent checks drawn on the accounts of elderly customers and jewelry businesses. Darbinyan also organized and operated a sophisticated debit card skimming operation targeting customers of 99 Cents Only Stores. This expansive scheme involved installation of skimmers in stores that were used to steal customers’ debit card numbers and PINs. The scheme targeted stores throughout Southern California and involved the bank accounts of thousands of customers of the discount store. Separately, Darbinyan conspired to extort and extorted funds from a member of the Armenian community using threats of violence. He also possessed, on two separate occasions, firearms and ammunition after having previously been convicted of felony grand theft for his role in a 2004 debit card fraud scheme.

Sharopetrosian, 35, was convicted of three counts: racketeering conspiracy, extortion conspiracy and extortion. The evidence at trial showed that while Sharopetrosian was incarcerated in Avenal State Prison in 2009, he directed the extortion of a member of the Armenian community. Sharopetrosian worked together with Darbinyan and others to carry out the extortion over a period of six months, at one point even arranging the kidnapping of the victim in order to hasten the extortion payments. Sharopetrosian, at different times, threatened to kill and kidnap the victim to coerce the victim into paying him over $100,000.

Parsadanyan, 29, of Los Angeles, was convicted of 14 counts of bank fraud for his role in the 99 Cents Only Store scheme. The evidence at trial showed that Parsadanyan assisted Darbinyan by, among other things, collecting and storing proceeds of the fraud scheme, including delivering approximately $34,000 in criminal proceeds to a co-schemer.

Darbinyan is scheduled to be sentenced on July 21, 2014. Sharopetrosian is scheduled to be sentenced on Sept.15, 2014. Parsadanyan is scheduled to be sentenced on July 14, 2014.

Darbinyan, Sharopetrosian and Parsadanyan were among 90 individuals charged in 2011 in two indictments targeting Armenian Power. One indictment accused 29 defendants, including Darbinyan and Sharopetrosian, of participating in the Armenian Power racketeering conspiracy that involved a host of illegal activities such as sophisticated bank fraud schemes, identity theft, debit card skimming and manufacturing counterfeit checks. Some defendants in the case were charged with participating in a variety of violent crimes, such as kidnapping, extortion and firearms offenses.

According to court documents, the Armenian Power street gang formed in the East Hollywood area of Los Angeles in the 1980s. The gang’s membership consisted primarily of individuals of Armenian descent, as well as of other countries within the former Soviet bloc. Armenian Power has more than 250 documented members, as well as hundreds of associates. According to court documents, Armenian Power members and associates regularly carry out violent criminal acts, including murders, attempted murders, kidnappings, robberies, extortions and witness intimidation to enrich its members and associates and preserve and enhance the power of the criminal enterprise.

Out of the 90 defendants charged in the two indictments, 85 have now been convicted. Two of the defendants are still pending trial, two defendants are fugitives and prosecutors dismissed charges against one defendant. The charges contained in the indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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

The case is being prosecuted by Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys E. Martin Estrada and Elizabeth Yang of the Central District of California.

Macon Openshaw, 21, pleaded guilty in the U.S. District Court for the District of Utah today to a federal civil rights crime relating to a bias-motivated weapons discharge aimed at a local synagogue and to two unlawful gun possession charges.

During the plea proceedings, Openshaw admitted that late at night on a date in 2012, he fired three rounds from a Walther .22 caliber handgun at the Congregation Kol Ami synagogue in Salt Lake City because of its religious character, hitting the unoccupied structure’s second floor window casing and the exterior wall of the synagogue.  Openshaw also admitted to possessing a handgun with a destroyed serial number, which was the same handgun he used to shoot the synagogue.  He also admitted to possessing several firearms and ammunition while he was subject to a protective order.

“Religiously-motivated violence tears at the fabric of our diverse society,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “Today, and in the future, the department stands vigilant to confront and eradicate violence based on a person’s religion, and we will continue to vigorously prosecute those who commit crimes born of hate.”

“Every citizen living in Utah has a right to be free from intimidation and threatening conduct,” said U.S. Attorney David B. Barlow.  “The U.S. Attorney’s Office in Utah has a strong history of prosecuting those who violate the civil rights of others.”

Openshaw entered into a plea agreement whereby he would be sentenced to 60 months incarceration.  As part of his plea agreement, Openshaw agreed to pay restitution to the synagogue to repair the damage caused by his actions.

Openshaw is scheduled to be sentenced on July 15, 2014, by U.S. District Judge Tena Campbell.

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

Two former correctional officers at Roxbury Correctional Institution (RCI) in Hagerstown, Md., were sentenced today in connection with the March 9, 2008, assault of Kenneth Davis, an inmate.  U.S. District Judge James K. Bredar sentenced Jeremy McCusker to serve 21 months in prison.  Walter Scott Steele was ordered to serve four months in prison and to complete 40 hours of community service. 

Jeremy McCusker previously pleaded guilty to deprivation of rights under color of law and conspiring to obstruct justice.  Walter Scott Steele also pleaded guilty to conspiring to obstruct justice as well as making false statements to federal authorities. 

Both McCusker and Steele testified for the prosecution at the federal trial of former RCI officer James Kalbflesh, who was convicted for his role in the assault of Davis that took place during a midnight shift and in the subsequent cover up. 

During their testimony at Kalbflesh’s trial and in court documents filed in connection with their respective guilty pleas, McCusker and Steele each admitted that they were present when other officers at RCI met during the midnight shift and agreed to assault Davis in retaliation for a prior incident involving Davis and another officer.  McCusker and other correctional officers then entered Davis’ cell and assaulted the inmate while Steele and another officer watched the assault. 

Later, Steele, McCusker and other officers met at a restaurant and agreed on a story to cover up their involvement in, or knowledge of, the midnight shift’s assault on Davis.  On Feb. 12, 2013, Steele met with federal authorities and provided false information regarding the incident.

“The overwhelming majority of correctional officers serve their communities with honor and professionalism,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “The Justice Department will aggressively prosecute those who engage in criminal misconduct.”

To date, 16 current or former officers at RCI have been convicted in connection with a series of assaults that Davis suffered on March 8-9, 2008.  Four former RCI officers still await sentencing before 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 of the Department of Justice, with the assistance of Assistant U.S. Attorney Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.

FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced that it has released its Fiscal Year (FY) 2013 Statistics Yearbook. As announced on its website on October 1, 2013, EOIR has been working to enhance its external data reporting by changing the way it analyzes and reports its data. The new statistical methodology is featured in the FY 2013 Statistics Yearbook, an annual compilation of data that examines respondents' cases by nationality, language, and disposition, and provides detailed information surrounding asylum cases.

In September 2011, EOIR convened an internal data working group to evaluate the collection and analysis of data and to assist in EOIR's annual effort to improve the agency's most significant data report. The conclusions of that working group were consistent with recommendations from the Department of Justice's Office of Inspector General in October 2012.

"Our new methodology will allow us to be more responsive to external statistics requests and to provide more transparency into EOIR's daily operations," said EOIR Director Juan P. Osuna. "These changes will make the FY 2013 Statistics Yearbook an even more useful tool than in years past."

The new statistical methodology revises the manner in which matters received and completed at EOIR are counted so that that the number of new receipts and initial case completions will provide as close an approximation as possible to the number of new individuals coming into EOIR immigration courts, and the number of motions and bonds will show additional work in existing cases.

- EOIR -

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

The Department of Justice announced today that CRC Health Corp. (CRC) has agreed to pay $9.25 million to the federal government and the State of Tennessee to settle allegations that CRC knowingly submitted false claims by providing substandard treatment to adult and adolescent Medicaid patients suffering from alcohol and drug addiction at its facility in Burns, Tenn.  CRC, based in Cupertino, Calif., is a nationwide provider of substance abuse and mental health treatment services. 

“Medicaid patients who enter residential treatment programs for alcohol and drug addiction deserve to have treatment provided by qualified personnel according to the appropriate standard of care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “We will not tolerate health care providers who prioritize profit margins over the needs of their patients.” 

CRC owns and operates a residential substance abuse treatment facility in Burns, Tenn., called New Life Lodge.  The government alleged that, between 2006 and 2012, New Life Lodge billed the Tennessee Medicaid program (TennCare) for substance abuse therapy services that were not provided or were provided by therapists who were not properly licensed by the state of Tennessee.  The government also alleged that New Life Lodge failed to make a licensed psychiatrist available to patients at the facility, as required by the state’s regulations; failed to maintain patient-staffing ratios required by Tennessee Department of Mental Health regulations and billed for Medicaid patients in excess of the state-licensed bed capacity at the facility.  In addition, the government alleged that New Life Lodge double-billed Medicaid for prescription substance abuse medications given to residents at the facility.  New Life Lodge currently is not treating Medicaid patients at its facility.  

“Substance abuse of varying levels is rampant here and across the country,” said U.S. Attorney for the Middle District of Tennessee David Rivera.  “Fortunately, when needed, Medicaid or TennCare covers substance abuse treatment and certain mental health assistance.  When those services are required, the government will ensure that the treatment is provided with the highest possible quality of care to those patients.  Anything less is unacceptable.”

“Safeguarding TennCare’s mental and behavioral health support system is a particular focus of this office,” said Tennessee Attorney General Bob Cooper.

The allegations covered by the settlement were raised in a lawsuit filed by Angie Cederoth, who was previously employed in New Life Lodge’s billing department, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for the submission of false claims and to receive a share of any recovery.  Cederoth will receive $1.5 million as her share of the settlement proceeds.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.

“Providers of health care services must not place profits above patients,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta.  “This was a vulnerable population of individuals who were seeking treatment for their substance abuse problems.  We will pursue these cases in order to ensure proper treatment is afforded to those seeking treatment.”

The investigation of this matter reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Tennessee, the Federal Bureau of Investigation, the Tennessee Attorney General’s Office, the Tennessee Bureau of Investigation and the Department of Health and Human Services Office of Inspector General. 

“The FBI is committed to investigating allegations of wrongdoing and false claims related to federally funded health care programs,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the FBI.  “The resolution of this matter is the result of the hard work by the individual investigators and the coordinated effort of all the agencies involved.”

“This resolution is indicative of a great collaborative effort to combat egregious and fraudulent activity against health care, which ultimately impacts everyone in Tennessee,” said Director of the Tennessee Bureau of Investigation Mark Gwyn. 

The lawsuit is captioned U.S. ex rel. Cederoth v. CRC Health Corporation Inc. , CV-3-11-00897 (M.D. Tenn.).  The claims asserted against the defendants are allegations only, and there has been no determination of liability.

The Department of Justice announced today that it has entered into a settlement agreement that, if approved by the court, will resolve allegations that the California Department of Corrections and Rehabilitation (CDCR) discriminated against an employee because of his sex in violation of Title VII of the Civil Rights Act of 1964. 

The department filed its complaint against CDCR in July 2013, in the U.S. District Court for the Central District of California.  The complaint alleged that Joe Cummings, a male cook with CDCR, was sexually harassed by a female co-worker and that CDCR failed to take timely steps both to end the harassment and to remedy it.  Title VII prohibits discrimination in employment because of sex, which includes sexual harassment, as well as because of color, national origin, race and religion.

According to the complaint, Cummings’s co-worker made frequent unwanted sexual advances toward Cummings for more than a year.  The complaint alleges that the co-worker frequently made lewd and sexually suggestive comments to Cummings that he explicitly rejected as unwelcome.  The complaint further alleges that the co-worker’s inappropriate verbal communications with Cummings escalated, over time, to unwanted physical contact.  According to the complaint, Cummings and other CDCR personnel complained numerous times to CDCR supervisors about the harassment, but CDCR failed to take timely remedial action to both end the harassment and to discipline the harasser.  The complaint alleges that CDCR’s failure to take timely action to address sexual harassment violates both Title VII and CDCR’s own anti-harassment policy, which requires its supervisors to prevent sexual harassment and to promptly address complaints of sexual harassment. 

Under the terms of the settlement agreement, CDCR must pay Cummings $50,000 in compensatory damages and restore leave that he indicated he used to try to avoid the alleged harasser.  CDCR must also maintain appropriate anti-harassment and anti-retaliation policies and procedures.  In addition, CDCR must provide appropriate training for its personnel on these policies and procedures.

“It is illegal to harass someone because of sex, regardless of the sex of the victim or the harasser,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “Title VII gives all employees the right to work in an environment that is free of sexual harassment, and the Civil Rights Division will continue to vigorously enforce that right.”

“Sexual harassment in the workplace is simply intolerable,” said U.S. Attorney André Birotte Jr.  “Today's settlement with the California Department of Corrections and Rehabilitation helps ensure continued compliance and furthers our efforts to stamp out employment discrimination.”

This case was litigated by Senior Trial Attorneys Raheemah Abdulaleem and Trevor Blake of the Civil Rights Division’s Employment Litigation Section, with assistance from Assistant U.S. Attorney Robyn-Marie Lyon Monteleone for the Central District of California.

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

A former Bridgestone Corp. executive has agreed to plead guilty and to serve 18 months in a U.S. prison for his role in an international conspiracy to fix prices and rig bids of automotive anti-vibration rubber parts sold in the United States and elsewhere, the Department of Justice announced today. 

 
According to the one-count felony charge filed today in the U.S. District Court for the Northern District of Ohio in Toledo, Yusuke Shimasaki, along with co-conspirators, engaged in a conspiracy to allocate sales of, to rig bids for, and to fix, raise and maintain the prices of automotive anti-vibration rubber parts sold to Toyota Motor Corp., Nissan Motor Co. Ltd., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and certain of their subsidiaries, affiliates and suppliers, in the United States and elsewhere. 

 
According to the charge, Shimasaki participated in the anti-vibration rubber conspiracy from at least as early as January 2001 until at least December 2008.  During that time period, he was employed by Bridgestone as a sales manager, an executive vice president at Bridgestone APM Co., in Findlay, Ohio, and as a general sales manager.  According to the plea agreement, in addition to serving time in prison, Shimasaki has also agreed to pay a $20,000 criminal fine and to cooperate in the department’s investigation.  The plea agreement is subject to court approval.

“The charge today once again demonstrates the Antitrust Division’s vigorous commitment to hold individuals accountable for engaging in anticompetitive conduct,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The division’s ongoing investigation has resulted in more than two dozen executives serving prison time for their participation in illegal conspiracies involving auto parts.”

 
Bridgestone manufactures and sells a variety of automotive parts, including anti-vibration rubber parts, which are comprised primarily of rubber and metal, and are installed in suspension systems and engine mounts as well as other parts of an automobile.  They are installed in automobiles for the purpose of reducing road and engine vibration.  On Feb. 13, 2014, the Department of Justice announced that Bridgestone had agreed to plead guilty and to pay a $425 million criminal fine for its role in the conspiracy.  On April 15, 2014, Yasuo Ryuto, Isao Yoshida, two former executives of Bridgestone Corp., and Yoshiyuki Tanaka, a current executive, were indicted their roles in a conspiracy to fix prices of automotive anti-vibration rubber parts.

 
To date, 33 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Additionally, 26 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.29 billion in fines.

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

 
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at (888) 647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at (216) 522-1400.

Pharmaceutical company Astellas Pharma US Inc. will pay $7.3 million to resolve allegations that it violated the False Claims Act in connection with its marketing and promotion of the drug Mycamine for pediatric use, the Justice Department announced today.  Astellas Pharma US Inc., located in Northbrook, Ill., manufactures and sells pharmaceutical drugs, including Mycamine.

“The FDA’s drug approval process requires companies to demonstrate the safety and efficacy of their products,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The Justice Department will hold accountable pharmaceutical companies that skirt these rules and seek to bill federal health care programs for uses of drugs that are not reimbursable.” 

The settlement resolves allegations that, between 2005 and 2010, Astellas knowingly marketed and promoted the sale of Mycamine for pediatric use, which was not a medically accepted indication and, therefore, not covered by federal health care programs.  During this time period, the FDA approved Mycamine to treat adult patients suffering from serious and invasive infections caused by the fungus Candida, including infections in the esophagus, the blood and the abdomen, and to prevent Candida infections in adults undergoing stem cell transplants.  From 2005 through June 2013, however, Mycamine was not approved to treat pediatric patients for any use.       

As a result of today’s $7.3 million settlement, the federal government will receive $4.2 million, and state Medicaid programs will receive $3.1 million. 

“The settlement in this case further demonstrates our commitment to hold responsible any pharmaceutical company that disregards the FDA drug approval process and promotes drugs for uses before they have been deemed safe and effective,” said U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger.  “It’s a message that should resonate with all drug companies: there are consequences for violating the False Claims Act and putting profit ahead of government safeguards.”

The allegations resolved by the settlement arose from a lawsuit filed by Frank Smith, a former Astellas sales representative, under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery.  Smith will receive $708,852.   

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.

This case was a cooperative effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Civil Division of the Department of Justice and the Offices of the Inspectors General of the Department of Health and Human Services and Office of Personnel Management.  The lawsuit is captioned United States ex rel. Smith v. Astellas Pharma, US Inc. et al., No. 10-999 (E.D. Pa.). 

The claims resolved by the settlement are allegations only; there has been no determination of liability. 

A Cleveland federal grand jury returned an indictment against one current executive and two former executives of Bridgestone Corp. for their roles in an international conspiracy to fix prices of automotive anti-vibration rubber parts sold in the United States and elsewhere, the Department of Justice announced today.

 
The indictment, filed today in the U.S. District Court for the Northern District of Ohio in Toledo, charges Yoshiyuki Tanaka, Yasuo Ryuto and Isao Yoshida, all Japanese nationals, with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate sales of, to rig bids for, and to fix, raise and maintain the prices of anti-vibration rubber parts sold to Toyota Motor Corp., Nissan Motor Corp., Suzuki Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and certain of their subsidiaries, affiliates and suppliers, in the United States and elsewhere.

 
“Today’s indictment again demonstrates that antitrust violations are not just corporate offenses but also crimes by individuals,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division will continue to vigorously prosecute executives who circumvent the law in order to maximize profits by harming consumers.”

Tanaka was employed by Bridgestone in various positions involving anti-vibration rubber parts sales, including manager at Bridgestone and executive vice-president at Bridgestone’s U.S. subsidiary Bridgestone APM Co., from approximately 1991 through at least February 2011. He is currently manager of the anti-vibration rubber original equipment international planning section. Ryuto was employed by Bridgestone in various positions involving anti-vibration rubber parts sales, including general manager and director, from approximately 1991 through at least June 2008; he is no longer employed by the company. Yoshida was employed by Bridgestone in various positions involving anti-vibration rubber parts sales, including manager and general manager, from approximately 1997 through at least September 2008 ; he is no longer employed by the company.

 
The indictment alleges that Tanaka, Ryuto, Yoshida and their co-conspirators conducted meetings and communications in Japan to reach collusive agreements regarding the sale of automotive anti-vibration rubber products to automakers in the United States and elsewhere. The indictment alleges that the conspiracy involved agreements affecting the Tacoma, Camry, Tundra, Sequoia, Corolla, Sienna, Venza and Highlander. According to the indictment, Tanaka participated in the conspiracy from at least as early as January 2004 until at least June 2008; Ryuto participated in the conspiracy from at least as early as April 2001 until at least May 29, 2008; and Yoshida participated in the conspiracy from at least as early as January 2001 until at least July 2008.

 
Bridgestone manufactures and sells a variety of automotive parts, including anti-vibration rubber parts, which are comprised primarily of rubber and metal, and are installed in suspension systems and engine mounts as well as other parts of an automobile. They are installed in automobiles for the purpose of reducing road and engine vibration. On Feb. 13, 2014, Bridgestone agreed to plead guilty and to pay a $425 million criminal fine for its role in the conspiracy.

 
To date, 32 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Additionally, 26 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.29 billion in fines.

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

Today’s charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. These cases were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at 216-522-1400.

James E. Beavers and Beverly S. Beavers of Knoxville, Tenn., were each sentenced to serve 36 months in prison followed by three years of supervised release, the Justice Department and Internal Revenue Service (IRS) announced today.  James and Beverly Beavers were also each ordered to pay restitution in the amount of $591,123.  On March 20, 2013, a jury sitting in Knoxville, Tenn., found the couple guilty of conspiracy to defraud the United States and filing false claims for tax refunds.  They have been in custody since they were convicted.

Court documents and the evidence at trial showed that James Beavers held a Ph.D. in civil engineering and was employed as an engineering consultant.  He was formerly employed as the director of an academic engineering center at the University of Tennessee.  Beverly Beavers owned a small formalwear and jewelry store in Knoxville. 

According to court documents and the evidence presented at trial, in June 2009, James and Beverly Beavers arranged to have a fraudulent 2008 tax return prepared by PMDD Services LLC, a tax return preparation firm that helped clients claim exorbitant tax refunds specifically intended to help the clients pay off their personal debts.  The tax return falsely reported that their personal debts, including the amount of the Beavers’ mortgage and the limits on their credit cards, were actually income on which federal income tax was withheld.  This fictitious income and tax withholding were reported to the IRS on false Forms 1099-OID, which were prepared by Penny Jones of PMDD Services based on information provided by James and Beverly Beavers.  As a result of the fraudulently inflated income and withholding, the Beavers’ 2008 tax return claimed a fraudulent tax refund of over $591,000.  Upon receiving the funds, James and Beverly Beavers paid off their home mortgage, then conveyed their newly unencumbered real estate to sham trusts in order to impede IRS efforts to collect the erroneously paid refund.  They later filed false amended tax returns for the 2006 and 2007 tax years, also prepared by Jones, requesting fraudulent tax refunds of $193,056 and $202,625, respectively.  Jones pleaded guilty to related tax crimes and was sentenced to 144 months in prison in January 2013.

Assistant Attorney General Kathryn Keneally of the Tax Division commended the efforts of special agents of IRS – Criminal Investigation who investigated the case and Trial Attorneys Jonathan Marx and Jed Silversmith of the Tax Division who prosecuted the case, with local assistance from the U.S. Attorney’s Office for the Eastern District of Tennessee.

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

WASHINGTON, D.C – Today, President Barack Obama granted clemency to the following individual:

• Ceasar Huerta Cantu, also known as Cesar Huerta Cantu – Katy, Texas
Offenses:  Conspiracy to possess with intent to distribute marijuana; money laundering (Western District of Virginia)
Sentence:  180 months’ imprisonment (as amended), five years’ supervised release
(May 11, 2006)
Commutation Grant:  Prison sentence commuted to 138 months’ imprisonment

The United States has requested that the federal district court in Montgomery, Ala., permanently bar Tonja Renee Toney and Jenika Williams from preparing federal income tax returns for others, the Justice Department announced today.

According to the complaint, which was filed yesterday in the U.S. District Court for the Middle District of Alabama, Toney and Williams each prepared tax returns as employees of Premier Tax in Montgomery in 2007 and 2008, and both pleaded guilty to charges related to their work at Premier Tax.  The complaint further alleges that both prepared false and fraudulent tax returns after being interviewed by Internal Revenue Service (IRS) agents in connection with their activities at Premier Tax.

The complaint alleges that both defendants have knowingly prepared federal income tax returns for customers that understated the customers’ tax liability by reporting false income in order to inflate the taxpayer’s claim to an Earned Income Tax Credit.

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

Related Materials:

United States v. Tonja Renee Toney, et al.
Complaint for Permanent Injunction

Francis E. Chandler III was sentenced by U.S. District Judge Susan Oki Mollway late yesterday to serve 37 months in prison and ordered to pay $3,066,629 in restitution for filing a false claim for tax refund and false retaliatory liens against four federal government officials, the Justice Department and Internal Revenue Service (IRS) announced today. 

According to court documents, Chandler filed a fraudulent 2007 federal income tax return seeking a tax refund of $3,969,012 based on his false claim of interest income and tax withholding of $6,222,850.  In April 2010, a federal grand jury indicted Chandler for filing the false claim against the United States.  Shortly after his indictment and in retaliation for the performance of their official duties, Chandler knowingly filed false liens in Hawaiian public records against the property of two federal judges, the U.S. Attorney and an Assistant U.S. Attorney who were involved in the prosecution of his false claims case.  On Feb. 11, 2013, pursuant to a plea agreement, Chandler pleaded guilty to one count of filing a false claim against the United States and one count of filing a false retaliatory lien against four government officials. 

“This sentence shows that those who seek to obtain fraudulent refunds by participating in bogus schemes risk prosecution, incarceration and substantial financial consequences,” said Assistant Attorney General Kathryn Keneally for the Tax Division.  “This sentence should also send a loud message that retaliating against government officials who are simply doing their jobs will not be tolerated.”

“With the income tax filing deadline today, this sentencing is a stark reminder that there is no secret formula to evade one's tax obligation,” said Special Agent in Charge Kenneth Hines of IRS-Criminal Investigation in the Pacific Northwest.  “When individuals seek to abuse the tax system by claiming bogus senseless tax refunds, they steal not only from the U.S. Treasury, they in effect steal from every one of us who pays taxes.  Chandler then tried to intimidate the very officials charged with upholding the law by filing retaliatory liens against them.  That sort of brazen tactic is simply illegal.”

Assistant Attorney General Keneally commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, and of Tax Division Senior Litigation Counsel Jen E. Ihlo and Trial Attorney Matthew J. Kluge, who prosecuted the case.         

More information about the Tax Division and its Tax Defier Initiative can be found at the division website. 

Following the recent tragedies at a Jewish Community Center outside of Kansas City and at Ft. Hood, Attorney General Eric Holder urged Congress Tuesday to approve $15 million in funding for active shooter training for law enforcement officers to ensure they have the tools they need to effectively respond to threats, protect themselves, and save innocent lives.

“In the face of this urgent and growing threat – when the lives of innocent people are at stake – those who stand on the front lines need our full and unwavering support," Holder said in a video message posted on the Justice Department's website. "This critical funding would help the Justice Department ensure that America’s police officers have the tools and guidance they need to effectively respond to active shooter incidents whenever and wherever they arise."

“Over the last decade, the Justice Department and the FBI have helped provide cutting-edge active shooter training to 50,000 front-line officers.  In the video message, Holder said continuing this training is critical since the patrol officers who arrive first on the scene are increasingly being relied on to respond directly to active shooters rather than wait for SWAT teams.”

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

“Between 2000 and 2008, the United States experienced an average of approximately five active shooter incidents every year.  Since 2009, this annual average has roughly tripled.  Earlier this month, Fort Hood suffered the second mass shooting that community has experienced in just five years.  And in a separate incident over the weekend, a gunman opened fire at a Jewish Community Center just outside of Kansas City.

“The Justice Department has concluded that federal hate crimes charges are appropriate in this case, and in the months ahead, we will do everything in our power to ensure that justice is served for every victim.

“But each of these tragic events is a heartbreaking reminder that mass shootings are all too common.  And they have become increasingly deadly.

“As a nation, we must confront this alarming rise and all of its underlying causes – honestly, factually, and without regard for political consequence.  We must deal with these incidents whenever they happen – but, just as importantly, we must prevent them whenever we can.

“Today’s Department of Justice committed to doing just that.  We’re more determined than ever to prevent mass shootings.  The FBI’s Behavioral Threat Assessment Center, which supports state, local and campus safety stakeholders, has worked diligently to respond to a nearly 200 percent increase in requests for assistance in the last year, and to help detect and mitigate potential active shooter situations.

“But we must also be prepared to respond quickly and effectively to active shooter incidents if and when they do occur.  And in today’s world, the first response must often be led not by SWAT teams or specialized police units – but by the very first patrol officers to arrive on the scene.

“That’s why all law enforcement officers must have the best equipment and most up-to-date training to confront these situations – to stop active shooters in their tracks, to protect themselves, and to save innocent lives.

“Over the last decade, the Justice Department and the FBI have helped provide cutting-edge active shooter training to 50,000 front-line officers, more than 7,000 on-scene commanders, and over 3,000 local, state, and federal agency heads.  This vital work must continue – but to provide training, we need adequate funding.

“Today, I am urging Congress to approve President Obama’s request for $15 million for active shooter training and other officer safety initiatives.  This critical funding would help the Justice Department ensure that America’s police officers have the tools and guidance they need to effectively respond to active shooter incidents whenever and wherever they arise.

“Every day, America’s federal, state, local, and tribal law enforcement officials perform their duties with integrity, courage, and extraordinary valor.  In the face of this urgent and growing threat – when the lives of innocent people are at stake – those who stand on the front lines need our full and unwavering support.  The safety of the American people demands it.  And the men, women, and children whose lives are impacted by active shooters every year deserve nothing less.”

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

Members of two different piracy groups engaged in the illegal distribution of copies of copyrighted Android mobile device applications have pleaded guilty for their roles in separate schemes, each designed to distribute more than one million copies of copyrighted apps.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia and Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office made the announcement.

Thomas Pace, 38, of Oregon City, Ore., pleaded guilty today to one count of conspiracy to commit criminal copyright infringement and is scheduled for sentencing on July 9, 2104.  According to the information filed on Jan. 24, 2014, Pace and his fellow conspirators identified themselves as the Appbucket Group, and from August 2010 to August 2012, they conspired with other members of the Appbucket Group to reproduce and distribute more than one million copies of copyrighted Android mobile device apps, with a total retail value of over $700,000, through the Appbucket alternative online market without permission from the copyright owners of the apps.  Two other defendants charged in the information – Thomas Dye and Appbucket Group leader Nicholas Narbone – pleaded guilty to the same charge in the information on March 10 and March 24, 2014, respectively.

Kody Jon Peterson, 22, of Clermont, Fla., pleaded guilty on April 14, 2014, to one count of conspiracy to commit criminal copyright infringement.  According to the information filed on Jan. 23, 2014, Peterson and his fellow conspirators identified themselves as the SnappzMarket Group, and from May 2011 until August 2012, Peterson conspired with other members of the SnappzMarket Group to reproduce and distribute over one million copies of copyrighted Android mobile device apps, with a total retail value of over $1.7 million, through the SnappzMarket alternative online market without permission from the software developers and other copyright owners of the apps. A sentencing date has not yet been scheduled.

The investigation was conducted by the FBI. The prosecution is being handled by Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher Bly of the Northern District of Georgia. Significant assistance was provided by the CCIPS Cybercrime Lab and the Criminal Division’s Office of International Affairs.

The Department of Justice announced today that an information was filed charging Robert Keller, 70, with interfering with the housing rights of three members of an interracial family because of the family members’ races and because the family members were living in Hurricane, Utah.    

Keller has been charged with two counts of criminal interference with a right to fair housing.  More specifically, the information alleges that Keller wrote a note to two Caucasian family members of an interracial family threatening to kill them if they did not make their African-American family member leave their home and the community.  The first count alleges that  Keller’s threats interfered with the housing rights of the Caucasian residents to associate in their home with their African-American family member, and the second count alleges that Keller’s threats interfered with the African-American resident’s right to occupy the home. 

If convicted, Keller faces a statutory maximum penalty of one year in prison on each count.

This case is being investigated by the Salt Lake City Division of the FBI in cooperation with the Hurricane City Police Department.  It is being prosecuted by Trial Attorney Saeed Mody of the Civil Rights Division and Assistant U.S. Attorney Carlos Esqueda for the District of Utah.  

An information is merely an accusation, and the defendant is presumed innocent unless proven guilty.

WASHINGTON—U.S. Attorney General Eric Holder released the following statement Monday regarding the tragic shootings in Kansas yesterday:

 “I was horrified to learn of this weekend's tragic shootings outside Kansas City. These senseless acts of violence are all the more heartbreaking as they were perpetrated on the eve of the solemn occasion of Passover.
  
“Justice Department prosecutors will work with their state and local counterparts to provide all available support and to determine whether the federal hate crimes statute is implicated in this case.

“No matter what, we will do everything in our power to ensure justice is served in this case on behalf of the victims and their families. Our thoughts and prayers go out to all those affected by these heinous acts.”

Hope Cancer Institute, a cancer treatment facility in Kansas, and Dr. Raj Sadasivan, the owner of Hope Cancer Institute, have agreed to pay $2.9 million to resolve allegations that they violated the False Claims Act by submitting claims to Medicare, Medicaid and the Federal Employee Health Benefits Program for drugs and services that were not provided to beneficiaries, the Department of Justice announced today.

“Billing Medicare and Medicaid for drugs that are not provided to beneficiaries contributes to the soaring costs of health care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Providers will be investigated aggressively and held accountable for falsely billing federal health care programs.”

The settlement resolves allegations that, between 2007 and 2011, Sadasivan and Hope Cancer Institute submitted claims to federal health benefit programs for the chemotherapy drugs Rituxan, Avastin and Taxotere that were not provided to federal health care beneficiaries. Sadasivan allegedly instructed the employees of Hope Cancer Institute to bill for a predetermined amount of cancer drugs at certain dosage levels, when lower dosages of these drugs were actually provided to beneficiaries. As a result of these instructions, Hope Cancer Institute submitted inflated claims to federal health care programs for drugs that were not actually provided to patients.

“Health care providers that try to make a quick buck by billing taxpayers for services never provided will instead pay a high price for their greed-fueled fraud," said Gerald T. Roy, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General. “We are dedicated to investigating and prosecuting these types of deceptive schemes.”

The settlement resolves a lawsuit filed by Krisha Turner, Crystal Dercher and Amanda Reynolds, former employees of Hope Cancer Institute, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to file suit on behalf of the government and to share in any recovery.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with Sadasivan and Hope Cancer Institute was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Kansas and the U.S. Department of Health and Human Services Office of Inspector General. The False Claims Act suit was filed in the U.S. District Court for the District of Kansas and is captioned United States ex rel. Turner et al. v. Hope Cancer Institute, et al.

The claims settled by this agreement are allegations only; there has been no determination of liability.

The government has intervened in a False Claims Act lawsuit against Orbit Medical Inc. and Jake Kilgore alleging that Orbit Medical’s sales representatives boosted power wheelchair and accessory sales by altering and forging physician prescriptions and supporting documentation, the Justice Department announced today. Orbit Medical is a durable medical equipment supplier based in Salt Lake City, Utah. Jake Kilgore is the former vice president and sales manager at Orbit Medical for the Western region of the United States.

“Medical equipment suppliers must bill federal health care programs accurately and honestly to ensure that federal dollars are used for individuals who truly need mobility devices,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Justice Department is committed to pursuing those who seek to abuse taxpayer-funded programs.”

Medicare pays for power wheelchairs for beneficiaries who cannot perform mobility- related activities of daily living in their home using other mobility assistance equipment, such as a cane, walker or power scooter. To qualify for reimbursement, a physician must conduct a face-to-face examination of the beneficiary and provide the supplier with a written prescription for a power wheelchair within 45 days of such an encounter, along with documentation that supports the medical necessity of the device. The prescription must be completed by the physician who performed the exam and must include the beneficiary’s name, the exam date, the diagnoses and conditions the wheelchair is expected to accommodate, the length of need and the physician’s signature.

The lawsuit alleges that Orbit Medical sales representatives, at Kilgore’s direction and encouragement, knowingly altered physician prescriptions and supporting documentation to get Orbit Medical’s power wheelchair and accessory claims paid by Medicare, the Federal Employees Health Benefits Plan and the Defense Health Agency. In particular, the lawsuit alleges that Orbit Medical sales representatives created documents to falsely establish that physicians examined beneficiaries in person; changed physicians’ prescriptions to falsely establish medical necessity for the power wheelchair or accessory; created or altered chart notes and other documents to falsely establish the medical necessity of the power wheelchair or accessory; forged physicians’ signatures on prescriptions and chart notes and added facsimile stamps to supporting documentation to make it appear as though physicians’ offices had sent the documents to Orbit Medical.

On Oct. 23, 2013, a federal grand jury in Utah indicted Jake Kilgore on three counts of health care fraud, three counts of false statements related to health care and three counts of wire fraud, all arising from his tenure with Orbit Medical.

“The government is intervening in this matter seeking to restore Medicare trust funds taken through the alleged use of falsified records and fraudulent billings, among other things,” said U.S. Attorney for the District of Utah David B. Barlow. “Health care fraud is aggressively pursued in Utah. Every effort is made to restore taxpayers' dollars taken through fraudulent conduct.”

“Our agency is dedicated to investigating health care fraud schemes such as this, which divert scarce taxpayer funds meant to provide for legitimate patient care,” said Gerald T. Roy, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General.

The allegations against Orbit Medical and Kilgore in this lawsuit were filed under the False Claims Act by two former Orbit employees, Dustin Clyde and Tyler Jackson. Under the act, private parties can sue for false claims on behalf of the government and share in any recovery. The act also permits the government to intervene in the whistleblowers’ suit, as the government did here.

The government’s intervention illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.

This case was a coordinated effort among the U.S. Attorney’s Office for the District of Utah, the Civil Division of the Department of Justice, the Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, the Office of Personnel Management and the Defense Health Agency. The lawsuit is captioned United States ex rel. Clyde; Jackson v. Orbit Medical; Kilgore, No. 2:10-CV-00297 (D. Utah).

The claims pursued by the government are allegations only; there has been no determination of liability.

The chief executive officer and a managing partner of a New York-based U.S. broker-dealer were arrested today on felony charges arising from a conspiracy to pay bribes to a senior official in Venezuela’s state economic development bank.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge George Venizelos of the New York Office of the FBI made the announcement.

According to the indictment unsealed today, Benito Chinea and Joseph DeMeneses, who were the Chief Executive Officer and a managing partner, respectively, of a New York-based broker-dealer (Broker-Dealer), are accused of conspiring with others to pay and launder bribes to Maria de los Angeles Gonzalez de Hernandez, a senior official in Venezuela’s state-owned economic development bank, Banco de Desarollo Económico y Social de Venezuela (BANDES), in exchange for her directing BANDES’s financial trading business to the Broker-Dealer.  DeMeneses was also charged with conspiring to obstruct an examination of the Broker-Dealer by the U.S. Securities and Exchange Commission (SEC) to conceal the true facts of the Broker-Dealer’s relationship with BANDES.

Chinea, 47, was arrested today in Manalapan, N.J., where he resides, and DeMeneses, 44, was arrested today in Fairfield, Conn., where he resides. In a separate action, the SEC announced civil charges against Chinea, DeMeneses and others involved in the bribery scheme.

“These senior Wall Street executives are accused of paying six-figure bribes to an official in Venezuela to secure foreign business for their firm,” said Acting Assistant Attorney General O’Neil.  “Today’s charges show once again that we will aggressively pursue individual executives, all the way up the corporate ladder, when they try to bribe their way ahead of the competition.”

“These two defendants, senior executives at a U.S. brokerage firm, are the fifth and sixth people to be charged in an alleged conspiracy to corrupt the trading business of a state-run economic development bank of Venezuela,” said U.S. Attorney Bharara. “They are alleged to have bribed a willing officer at the bank to steer its overseas trading business to the defendants’ brokerage firm, reaping millions for these defendants and their partners in crime.  This Office will not tolerate the kind of outright bribery and concealment that characterized this scheme.”

“As alleged in the indictment, Chinea and DeMeneses bribed Gonzalez to secure BANDES's financial trading business,” said FBI ADIC Venizelos. “DeMeneses compounded the Broker-Dealer’s illegal activities by conspiring to obstruct an investigation by regulators. The arrests today of Chinea and DeMeneses should be a reminder to all those in the business community that engaging in bribery schemes to secure business and make a profit is illegal.  Together with our law enforcement partners, the FBI will continue to investigate bribery and fraud at all levels.”

According to the allegations in the indictment unsealed today, as well as other documents previously filed in Manhattan federal court, Chinea and DeMeneses worked at the headquarters of the Broker-Dealer in New York City. In 2008, the Broker-Dealer established a group called the Global Markets Group (GMG), which offered fixed income trading services for institutional clients in the purchase and sale of foreign sovereign debt. One of the Broker-Dealer’s GMG clients was BANDES, which operated under the direction of the Venezuelan Ministry of Finance. Gonzalez was an official at BANDES and oversaw the development bank’s overseas trading activity. At her direction, BANDES conducted substantial trading through the Broker-Dealer. Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a commission.

As alleged in court documents, from late 2008 through 2012, Chinea and DeMeneses, together with three Miami-based Broker-Dealer employees, Ernesto Lujan, Tomas Alberto Clarke Bethancourt and Jose Alejandro Hurtado, participated in a bribery scheme in which Gonzalez directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer split the revenue the Broker-Dealer generated from this trading business with Gonzalez. During this time period, the Broker-Dealer generated over $60 million in commissions from trades with BANDES. In order to conceal their conduct, Chinea, DeMeneses and their co-conspirators routed the payments to Gonzalez, frequently in six-figure amounts, through third-parties posing as “foreign finders” and into offshore bank accounts. In several instances, Chinea personally signed checks worth millions of dollars that were made payable to one of these purported “foreign finders” and later deposited in a Swiss bank account.

As further alleged in court documents, as a result of the bribery scheme, BANDES quickly became the Broker-Dealer’s most profitable customer. As the relationship continued, however, Gonzalez became increasingly unhappy about the untimeliness of the payments due her from the Broker-Dealer, and she threatened to suspend BANDES’s business. In response, DeMeneses and Clarke agreed to pay Gonzalez approximately $1.5 million from their personal funds. Chinea and DeMeneses agreed to use Broker-Dealer funds to reimburse DeMeneses and Clarke for these bribe payments. To conceal their true nature, Chinea and DeMeneses agreed to hide these reimbursements in the Broker-Dealer’s books as sham loans from the Broker-Dealer to corporate entities associated with DeMeneses and Clarke.

Court documents also allege that beginning in or around November 2010, the SEC commenced a periodic examination of the Broker-Dealer, and from November 2010 through March 2011, the SEC’s exam staff made several visits to the Broker-Dealer’s offices in Manhattan. In or about early 2011, DeMeneses and others involved in the scheme discussed that the SEC was examining the Broker-Dealer’s relationship with BANDES. DeMeneses and others agreed they would take steps to conceal the true facts of the Broker-Dealer’s relationship with BANDES, including by deleting emails, in order to hide the actual relationship from the SEC.

Chinea and DeMeneses were each charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and the Travel Act, five counts of violating the FCPA, and five counts of violating of the Travel Act. Chinea and DeMeneses were also charged with one count of conspiracy to commit money laundering and three counts of money laundering.  DeMeneses was further charged with one count of conspiracy to obstruct justice.

Previously, on Aug. 29 and Aug. 30, 2013, Lujan, Hurtado and Clarke each pleaded guilty in Manhattan federal court to conspiring to violate the FCPA, to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses, relating, among other things, to the scheme involving bribe payments to Gonzalez. On Nov. 18, 2013, Gonzalez pleaded guilty in Manhattan federal court to conspiring to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses, for her role in the corrupt scheme.

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

This ongoing investigation is being conducted by the FBI, with assistance from the Criminal Division’s Office of International Affairs. The department appreciates the substantial assistance provided by the SEC.

Senior Deputy Chief James Koukios and Trial Attorney Maria Gonzalez Calvet of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution.  Assistant U.S. Attorney Carolina Fornos is responsible for the forfeiture aspects of the case.

Additional information about the Justice Department’s FCPA enforcement efforts can be

found at www.justice.gov/criminal/fraud/fcpa .

Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division, U.S. Attorney Joyce White Vance for the Northern District of Alabama and FBI Special Agent in Charge Richard D. Shwein Jr. announced that a Talladega County, Ala., man was sentenced in federal court today for attempting to hire members of the Ku Klux Klan (KKK) to murder an African-American neighbor

Allen Wayne Densen Morgan, 29, of Munford, Ala., pleaded guilty before U.S. District Judge Karon O. Bowdre on Oct. 24, 2013, to one count of using and causing someone else to use interstate facilities and travel with the intent to commit a murder-for-hire.  At today’s sentencing hearing, Judge Bowdre sentenced Morgan to serve 72 months in prison to be followed by three years of supervised release.

Morgan previously admitted that in August 2013, he attempted to hire members of the KKK to murder his neighbor.  According to Morgan’s plea agreement, on Aug. 22, 2013, Morgan spoke on the phone with an undercover FBI agent, who identified himself as a KKK member.  The men arranged to meet three days later at an Oxford, Ala., motel to discuss payment for the murder.  In that phone conversation, Morgan used a racial slur to describe the man he wanted killed and bragged that he had just fired several shots toward the man to intimidate him.  Morgan also described, in detail, how he wanted the man to be “hung from a tree like a deer and gutted,” to have body parts cut off and to “die a slow, painful death.”  On August 25, Morgan met with FBI agents posing as members of the KKK.  Morgan offered a watch, a necklace and a gun as payment for the murder and gave explicit directions for the man’s torture and murder. 

“The defendant attempted to have his neighbor tortured and murdered by the KKK,” said Acting Assistant Attorney General Samuels.  “Today’s sentence demonstrates that the Justice Department will continue to aggressively prosecute those who act on their racial hatred by seeking to inflict such acts of violence on others.”

“Mr. Morgan detailed his calculated desire to end his neighbor's life through the most brutal and heinous means,” said U.S. Attorney Vance. “Today's sentence reinforces that vigilantism is not acceptable in our society and we will prosecute that crime.”

This case was investigated by the FBI and prosecuted by Assistant U.S. Attorneys Pat Meadows and Brad Felton of the Northern District of Alabama and Civil Rights Division Trial Attorney David Reese.

Nine  alleged members of a wide-ranging racketeering enterprise and conspiracy who infected thousands of business computers with malicious software known as “Zeus” have been charged in an indictment unsealed today in Lincoln, Neb.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Deborah R. Gilg for the District of Nebraska and Special Agent in Charge Thomas R. Metz of the FBI’s Omaha Division made the announcement.

The indictment alleges that the “Zeus” malware captured passwords, account numbers, and other information necessary to log into online banking accounts.  The conspirators allegedly used the information captured by “Zeus” to steal millions of dollars from account-holding victims’ bank accounts.

The indictment was unsealed in connection with the arraignment this afternoon at the federal courthouse in Lincoln of two Ukrainian nationals, Yuriy Konovalenko, 31, and Yevhen Kulibaba, 36.  Konovalenko and Kulibaba were recently extradited from the United Kingdom.  All of the defendants were charged by a federal grand jury in August 2012 with conspiracy to participate in racketeering activity, conspiracy to commit computer fraud and identity theft, aggravated identity theft, and multiple counts of bank fraud.

“The ‘Zeus’ malware is one of the most damaging pieces of financial malware that has ever been used,” said Acting Assistant Attorney General O’Neil.  “As the charges unsealed today demonstrate, we are committed to making the Internet more secure and protecting the personal information and bank accounts of American consumers.  With the invaluable cooperation of our foreign law enforcement partners, we will continue to bring to justice cyber criminals who steal the money of U.S. citizens.”

“In this case, the victims included a Nebraska bank and a Nebraska company,” said U.S. Attorney Gilg.  “This demonstrates the global reach of cybercrime and the significant threat to our financial infrastructure.  We are grateful for the collaboration of our international and federal law enforcement partners in this complex financial fraud crime."

This case illustrates the vigorous cooperation between national and global law enforcement agencies and sends a strong message to cyber thieves,” said FBI SAC Metz.  “The FBI and our international partners will continue to devote resources to finding better ways to safeguard our systems, fortify our cyber defenses and stop those who do us harm."

According to the indictment, the defendants participated in an enterprise and scheme that installed, without authorization, malicious software known as “Zeus” or “Zbot” on victims’ computers.  The defendants are charged with using that malicious software to capture bank account numbers, passwords, personal identification numbers, RSA SecureID token codes and similar information necessary to log into online banking accounts.  The indictment alleges that the defendants falsely represented to banks that they were employees of the victims and authorized to make transfers of funds from the victims’ bank accounts, causing the banks to make unauthorized transfers of funds from the victims’ accounts.

As part of the enterprise and scheme, the defendants allegedly used as “money mules” residents of the United States who received funds transferred over the Automated Clearing House network or through other interstate wire systems from victims’ bank accounts into the money mules’ own bank accounts.  These “money mules” then allegedly withdrew some of those funds and wired the money overseas to conspirators.

According to court documents unsealed today, Kulibaba allegedly operated the conspirators’ money laundering network in the United Kingdom by providing money mules and their associated banking credentials to launder the money withdrawn from U.S.-based victim accounts.  Konovalenko allegedly provided money mules’ and victims’ banking credentials to Kulibaba and facilitated the collection of victims’ data from other conspirators.

The following four identified defendants remain at large: • Vyacheslav Igorevich Penchukov, 32, of Ukraine, who allegedly coordinated the exchange of stolen banking credentials and money mules and received alerts once a bank account had been compromised.
• Ivan Viktorvich Klepikov, 30, of Ukraine, the alleged systems administrator who handled the technical aspects of the criminal scheme and also received alerts once a bank account had been compromised.
• Alexey Dmitrievich Bron, 26, of Ukraine, the alleged financial manager of the criminal operations who managed the transfer of money through an online money system known as Webmoney.
• Alexey Tikonov, of Russia, an alleged coder or developer who assisted the criminal enterprise by developing new codes to compromise banking systems.

The indictment also charges three other individuals as John Doe #1, John Doe #2 and John Doe #3.

The case was investigated by the FBI’s Omaha Cyber Task Force.  The Metropolitan Police Service of the United Kingdom, the National Police of the Netherlands’s National High Tech Crime Unit and the Security Service of Ukraine provided significant assistance in the investigation.

The case is being prosecuted by Trial Attorney William A. Hall, Jr. of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Steven A. Russell of the District of Nebraska. The Office of International Affairs in the Justice Department’s Criminal Division provided valuable assistance with the extradition.

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

Related Materials:

Konovalenko Complaint
Konovalenko Superseding Indictment

Anthony Joseph, a commercial fisherman from Levittown, N.Y., pleaded guilty today in federal court in Central Islip, N.Y., to federal violations stemming from his role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside (RSA) Program, the Justice Department’s Environment and Natural Resources Division announced.

Joseph, the former operator of the dragger F/V Stirs One, pleaded guilty to one count of mail fraud, two counts of wire fraud, and one count of falsification of federal records for knowingly submitting 158 falsified fishing logs, known as fishing vessel trip reports (FVTRs) and aiding and abetting the submission of 167 falsified dealer reports from June 2009 through December 2011, as part of a scheme to defraud the United States of overharvested and underreported fluke.

As part of the plea deal, Joseph agreed to be subject to between $629,000 and $692,000 in combined fine and restitution.  The defendant also agreed to make $15,000 in community service payments to the Cornell Cooperative Extension of Suffolk County, N.Y., in order to pay for the enhancement of fluke habitat through the C.C.E.’s Marine Meadows Program.  The jointly proposed sentence includes relinquishment of federal fishing permits, a ban on participation in the RSA Program, and a ban from working on the Stirs One.  The court will hear sentencing recommendations regarding non-agreed terms at a hearing set for Oct. 7, 2014.

“Today’s conviction demonstrates that we will hold those who violate the integrity of the Research Set-Aside Program accountable under the law and in doing so make sure that this valuable resource remains available to everyone and sustainable for future generations,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.    

“Our office takes these violations very seriously,” said Logan Gregory, Special Agent in Charge of the National Oceanic and Atmospheric Administration (NOAA) Office of Law Enforcement’s Northeast Division. “The ability to catch and sell fish from a limited set aside quota to help fund scientific research should be considered a limited privilege, not an entitlement. The unlawful behavior shown in this case undermines the purpose and accuracy of the set-aside program as well as impacts the profitability of these fish for law-abiding fishermen who comply with the regulations.”  

Under NOAA regulations, all of the Stirs One’s catch had to be reported to NOAA on FVTRs. During the years 2009, 2010, and 2011, the Stirs One principally targeted fluke. However, under the captaincy and with the knowledge of Anthony Joseph, the vessel exceeded its relevant federal and New York State quotas for fluke for at least 158 trips. These illegal overages totaled between 296,000 and 310,000 pounds of fluke worth between approximately $623,000 and $632,000.

In order to cover up the illegal fluke harvesting, Anthony Joseph falsified the FVTRs that he personally mailed to NOAA. He also utilized the exempted fisheries permit quota that was acquired through the federal RSA Program as a mask for his fluke overages. According to court documents, the defendant characterized the RSA Program as “a license to steal” and remarked that during the period of 2009-2011, he referred to the Research Set-Aside Program with the nickname, “Research Steal-Aside.” 

NOAA regulations also required the first purchasers of seafood, i.e., directly from the fishing vessel, to report their purchases to NOAA on an electronic form known as a dealer report. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price and weight. NOAA utilizes the data in the dealer reports to set quotas and implement other management measures designed to ensure a sustainable fisheries. The dealer reports also serve as a check on the information that is submitted in FVTRs. In other words, in order to effectuate his scheme, Anthony Joseph needed to ensure that corresponding false dealer reports were being submitted that contained the same false information as was contained on the falsified FVTRs. A mismatch would have indicated a serious error or fraud, and would have been a red flag for fisheries managers. Accordingly, during June 2009 to December 2011, the defendant schemed with two other fish dealers to submit false dealer reports in furtherance of the fraud. In doing so, the defendant aided and abetted Fish Dealer X and Fish Dealer Y in their internet submission of a total of at least 167 false dealer reports from computers in New York to NOAA’s Regional Fisheries Office in Gloucester, Mass.

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

Assistant Attorney General Kathryn Keneally for the Tax Division and U.S. Attorney David A. Capp of the Northern District of Indiana announced today that Ronald Eugene Jamerson, 56, of Schererville, Ind., was sentenced to serve 12 months and one day in prison by U.S. District Judge Phillip P. Simon.  Jamerson was also ordered to pay $541,083 in restitution to the Internal Revenue Service (IRS) for unpaid individual income taxes and employment taxes, which represents the total tax loss owed for all tax periods from 2003 through 2008, according to the plea agreement.  On Oct. 25, 2013, Jamerson pleaded guilty to one count of willfully failing to truthfully account for, collect and pay over employment taxes to the IRS.

On June 20, 2012, Jamerson was indicted by a federal grand jury on 11 counts of willfully failing to file quarterly employment tax returns with the IRS and willfully failing to pay the IRS the federal income taxes and the Federal Insurance Contributions Act taxes due and owing from the second quarter of 2006 through the fourth tax quarter of 2008.  Jamerson is an otolaryngologist (ear, nose and throat surgeon) who opened his own medical practice in the late 1990s.  According to court pleadings, Jamerson deducted and collected from his employees’ paychecks federal income taxes and employment taxes in the amount of $63,929 over the 11 tax quarters, but failed to file the employment tax returns and pay over the related employment taxes.

The case was investigated by Special Agents from IRS - Criminal Investigation and prosecuted by Trial Attorneys Erin S. Mellen and Chris J. Maietta of the Tax Division, with valuable support from the U.S. Attorney’s Office in Hammond, Ind.

Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division and U.S. Attorney Loretta E. Lynch for the Eastern District of New York announced today that the United States has filed a complaint against the Town of Oyster Bay in Long Island, N.Y., for violating the Fair Housing Act.  The complaint alleges that two housing programs designed to develop below-market rate housing for first time homeowners and senior citizens discriminate against African-Americans because the programs give preference to residents of the town, which is predominantly white. 

“The Fair Housing Act protects the right of all individuals, regardless of their race, to choose where to live and to have equal access to affordable housing,” said Acting Assistant Attorney General Samuels.  “Today’s lawsuit is a reminder that if municipalities wish to adopt residency preferences such as those imposed by the defendants, they must do so in a way that does not discriminate against people based on race.”

“Housing programs designed to help young families and senior citizens purchase homes should be available to people of all races, including African-Americans,” said U.S. Attorney Lynch.  “To the extent residency preferences prevent families and senior citizens from purchasing homes because of race, ethnicity or color, the preferences violate federal law and cannot be tolerated.”     

At issue are two town zoning incentive programs.  The Next Generation housing program encourages developers to build below-market rate housing for first time homebuyers, generally young families.  The Golden Age housing program offers similar incentives for the construction of below-market rate housing for senior citizens.  Developers who build housing under the programs receive zoning variances which allow them to build housing more densely than current zoning restrictions permit in exchange for lower sale prices for certain units.  Both programs require developers to award units constructed under the programs to residents and children of residents of the town. 

According to the complaint, the residency preferences discriminate against African-Americans because very few African-Americans reside in the town and even fewer are eligible for the program, as compared to the population of African-Americans in surrounding communities that are significantly more diverse.  African-Americans constituted less than one percent of families living in the Town of Oyster Bay who were income eligible and otherwise qualified to purchase housing under the Next Generation program.  Conversely, whites made up as much as 90 percent of the pool of eligible families.  The eligible population of Nassau County, N.Y., and Suffolk County, N.Y., residents was approximately 10 percent African-American and between 70 percent and 75 percent white and the eligible population in the New York City metropolitan area was approximately 20.5 percent African-American and approximately 48 percent white.

Also named as defendants are Oyster Bay Town Supervisor John Venditto, in his official capacity, and Long Island Housing Partnership (LIHP), the not-for-profit organization which is responsible for administering the Next Generation housing program, which includes implementing the residency preferences for the town.

The complaint was filed with an accompanying settlement between the Department and LIHP.  LIHP has agreed to injunctive relief which requires LIHP to ensure that residency preferences it administers are analyzed so that they do not violate fair housing laws.  LIHP will also provide education and training to localities, banks and individuals on Long Island regarding the requirements of fair housing laws.          

Three individuals have been indicted for their alleged roles in an approximately $32 million fraud against a Federal Communications Commission (FCC) program designed to provide discounted telephone services to low-income customers.

The charges were announced today by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office, Inspector General David L. Hunt of the FCC Office of Inspector General (FCC-OIG) and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI).

Thomas E. Biddix, 44, of Melbourne, Fla., Kevin Brian Cox, 38, of Arlington, Tenn., and Leonard I. Solt, 49, of Land O’Lakes, Fla., were charged by a criminal indictment returned on April 9, 2014, and unsealed today in federal court in Tampa, Fla. The indictment charges the three defendants with one count of conspiracy to commit wire fraud and 15 substantive counts of wire fraud, false claims and money laundering. The court also authorized a seizure warrant seeking the defendants’ ill-gotten gains, including the contents of multiple bank accounts, a yacht and several luxury automobiles.

As alleged in the indictment, the defendants engaged in a scheme to submit false claims with the federal Lifeline Program administered by the Universal Service Administrative Company, a not-for-profit corporation designated and authorized by the FCC. The program aims to provide affordable, nationwide telephone service to all Americans through discounted phone service for qualifying low-income customers.

The indictment alleges that the defendants owned and operated Associated Telecommunications Management Services LLC (ATMS), a holding company that owned and operated multiple subsidiary telephone companies that participated in the Lifeline Program. Biddix, chairman of the board at ATMS, and Cox and Solt allegedly caused the submission of falsely inflated claims to the Lifeline Program between September 2009 and March 2011 that resulted in ATMS fraudulently receiving more than $32 million.

The investigation has been conducted by the FBI, FCC-OIG, and IRS-CI. The United States Marshals Service provided assistance coordinating the seizures of assets.

The case is being prosecuted by Trial Attorneys Andrew H. Warren and Kyle Maurer of the Criminal Division’s Fraud Section, with assistance from Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section, and the United States Attorney’s Offices for the District of Columbia, the Western District of Tennessee and the Middle District of Florida.

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

WASHINGTON—U.S. Attorney General Eric Holder—who testified before the U.S. Sentencing Commission last month in support of a proposal to reduce the federal sentencing guidelines for low-level, nonviolent drug offenders—released the following statement Thursday in response to the Commission voting to formally adopt those changes:

“This action by the U.S. Sentencing Commission represents a milestone in our effort to reshape the criminal justice system’s approach to dealing with drug offenders. This reduction in the federal sentencing guidelines, while modest, sends a strong message about the need to reserve the harshest penalties for the most serious criminals. At a time when prison and detention costs consume nearly a third of the Justice Department’s budget, it simply makes sense to explore alternatives to incarceration and renew our emphasis on treatment and prevention.

“It is now time for Congress to pick up the baton and advance legislation that would take further steps to reduce our overburdened prison system. Proposals like the bipartisan Smarter Sentencing Act would enhance the fairness of our criminal justice system while empowering law enforcement to focus limited resources on the most serious threats to public safety. I look forward to continuing to work with lawmakers on both sides of the aisle on these types of common-sense reforms.”

The Justice Department and Internal Revenue Service (IRS) announced that Celamour Berus, of Springfield Gardens, N.Y., was arrested for multiple tax crimes today following his indictment on April 3, 2014.  The indictment was unsealed today in the District Court for the Eastern District of New York following his arrest.

According to the indictment, Berus owned and operated a tax preparation business called Celamour Enterprises, which was located at his home in Springfield Gardens, N.Y.  The indictment alleges that Berus prepared false individual income tax returns for clients of Celamour Enterprises for tax years 2007 through 2011.  Berus included false itemized deductions for charitable contributions, unreimbursed employee expenses and other expenses on the returns he prepared.  The indictment charges that Berus aided and assisted in the preparation of 38 false tax returns for his clients. 

The indictment also alleges that Berus falsified his own federal income tax returns for tax years 2007 through 2010 by failing to report all of the gross receipts generated by his tax preparation business.  Berus also included false itemized deductions for unreimbursed employee expenses on his tax returns. 

A trial date has not been scheduled.  An indictment merely alleges that a crime has been committed and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Berus faces a statutory maximum sentence of three years in prison for each count and a fine of up to $250,000.

The case was investigated by special agents of IRS – Criminal Investigation.  Trial Attorneys Jeffrey Bender and Kevin Lombardi of the Justice Department’s Tax Division are prosecuting the case. 

Claude Arthur Verbal II, formerly of Raleigh, N.C., and now of Miami, pleaded guilty to tax fraud, healthcare fraud and money laundering in two separate cases in federal court, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney Ripley Rand for the Middle District of North Carolina.  Verbal pleaded guilty to one count of conspiracy to defraud the United States, one count of aiding and assisting the preparation of false tax returns, one count of healthcare fraud and one count of money laundering.  The plea was accepted late yesterday by U.S. District Judge Catherine Eagles in Greensboro, N.C., and sentencing was set for Aug. 11, 2014.  Verbal faces up to 28 years in federal prison and $850,000 in fines, and has agreed to pay restitution to the Internal Revenue Service (IRS) and Medicaid.

The Tax Case

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

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

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

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

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

Related Tax Cases

According to court documents, in a series of related cases in the Middle District of North Carolina, multiple other individuals employed by NBT – including branch managers, return preparers and client recruiters – have also pleaded guilty to charges involving federal tax fraud, fraud, and identity theft crimes.  In particular, each of the individuals listed below pled guilty to one count each of wire fraud, aggravated identity theft and aiding and assisting the preparation of false tax returns:

Defendant                                Role                                         Sentence

Leslie Brewster                       Branch manager                      70 months

Nikki Brewster                        Branch manager                      61 months

Tiffany Rogers                        Return preparer                       48 months                  

Dawn Williams                       Return preparer                       36 months and one day

Saichelle McNeill                    Return preparer                       27 months

Ronald Hairston                      Client recruiter                        24 months

Jennifer Bullock                      Return preparer                       15 months

According to court documents, in a related case, Rakecia Brame pleaded guilty to wire fraud, aggravated identity theft and aiding and assisting the preparation of false tax returns.  Brame, a former social worker with the Alamance County Department Social Services (DSS), admitted to selling the identities of DSS clients to NBT return preparers for use as false dependents on tax returns.

According to court documents, in another related case, Tasha Smith, a former NBT employee who later left and opened her own fraudulent tax return preparation businesses, pleaded guilty on April 8, 2014, to conspiracy to defraud the United States.

“The tax fraud committed by Claude Verbal and the other Nothing But Taxes defendants is an affront to honest, hard-working taxpayers,” said Assistant Attorney General Kathryn Keneally of the department’s Tax Division.  “The Justice Department will prosecute and seek just punishment against those who prepare fraudulent tax returns.”

“Today, Mr. Verbal admitted to owning a tax preparation business that blatantly ignored the tax laws by preparing false tax returns and misusing his electronic filing privileges,” said Chief of IRS-Criminal Investigation Richard Weber.  “Dishonest return preparers use a variety of methods to cheat the government, including falsifying information on the tax returns to generate larger refunds for their clients.  Criminal Investigation will continue to ensure that all tax practitioners, tax preparers and others who practice in the tax law profession adhere to professional standards and follow the law.”  

The Healthcare Fraud Case

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

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

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

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

·          Unqualified personnel conducting therapy; and

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

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

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

“Mr. Verbal’s fraudulent schemes victimized taxpayers in multiple ways, damaging Medicaid, the patients who rely on it, and the taxpayers who support it,” said U.S. Attorney Rand.  “Stopping these fraudulent activities is a priority of the Department of Justice, and we are committed both to bringing the fraudsters to justice and returning the ill-gotten gains to the victimized agencies.”

“The improper billing of the N.C. state community mental health program by unscrupulous providers will not be tolerated,” said Derrick Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta.  “This costs taxpayers millions of dollars each year and drains the Medicaid program of much needed resources.”

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

The Department of Justice and the Federal Trade Commission (FTC) today issued a policy statement on the sharing of cybersecurity information that makes clear that properly designed cyber threat information sharing is not likely to raise antitrust concerns and can help secure the nation’s networks of information and resources.  The policy statement provides the agencies’ analytical framework for information sharing among private entities and is designed to reduce uncertainty for those who want to share ways to prevent and combat cyberattacks.

“The Department of Justice is committed to doing all it can to protect the security of our nation’s networks.  Through the FBI and the National Security and Criminal Divisions, the department plays a critical role in preventing and prosecuting cybercrime,” said Deputy Attorney General James M. Cole.  “Private parties play a critical role in mitigating and responding to cyber threats, and this policy statement should encourage them to share cybersecurity information.”

“Cyber threats are increasing in number and sophistication, and sharing information about these threats, such as incident reports, indicators and threat signatures, is something companies can do to protect their information systems and help secure our nation’s infrastructure,” said Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division.  “With proper safeguards in place, cyber threat information sharing can occur without posing competitive concerns.”

“Because of the FTC’s long experience promoting data security, we understand the serious threat posed by cyberattacks,” said FTC Chairwoman Edith Ramirez. “This statement should help private businesses by making it clear that antitrust laws do not stand in the way of legitimate sharing of cybersecurity threat information.” 

In the policy statement, the federal antitrust agencies recognize that the sharing of cyber threat information has the potential to improve the security, availability, integrity and efficiency of the nation’s information systems.  The policy statement also emphasizes that the legitimate sharing of cyber threat information is very different from the sharing of competitively sensitive information such as current or future prices and output or business plans, which may raise antitrust concerns.  Cyber threat information is typically technical in nature and covers a limited type of information, and disseminating that information appears unlikely to raise competitive concerns. 

The joint Department of Justice/Federal Trade Commission “Antitrust Guidelines for Collaborations Among Competitors” provide an overview of the agencies’ analysis of information sharing as a general matter.  The agencies consider whether the relevant agreement likely harms competition by increasing the ability or incentive to raise price above or reduce output, quality, service or innovation below what likely would prevail in the absence of the relevant agreement. 

Previous antitrust analysis on cyber threat information sharing was issued in October 2000, when the Antitrust Division issued specific guidance in a business review letter to Electric Power Research Institute Inc.  Under the Justice Department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division will challenge the action under the antitrust laws.  In that letter, the Antitrust Division confirmed that it had no intention of taking enforcement action against the company’s proposal to exchange certain cybersecurity information, including exchanging actual real-time cyber threat and attack information.  In that matter, the division concluded that as long as the information exchanged was limited to physical and cybersecurity issues, the proposed interdictions on price, purchasing and future product innovation discussions should be sufficient to avoid any threats to competition.  The legal analysis in that matter remains current.

Following a comprehensive investigation, today the Justice Department announced its findings that the Albuquerque Police Department (APD) has engaged in a pattern or practice of excessive force that violates the Constitution and federal law.  The department delivered a letter setting forth these findings to Albuquerque Mayor Richard J. Berry and Police Chief Gorden Eden this morning.

The investigation was launched on Nov. 27, 2012, and was conducted jointly by the department’s Civil Rights Division and the U.S. Attorney’s Office for the District of New Mexico.  The investigation examined whether APD engages in an unconstitutional pattern or practice of excessive force, including deadly force, as well as the cause of any pattern or practice of a violation of the law.  This investigation did not assess whether any conduct violated criminal laws.  Specific cases have been referred to the Criminal Section of the division for consideration. 

The department found reasonable cause to believe that APD engages in a pattern or practice of excessive force in violation of the Fourth Amendment of the U.S. Constitution.  The department specifically found three patterns of excessive force:

·          APD officers too frequently use deadly force against people who pose a minimal threat and in situations where the conduct of the officers heightens the danger and contributes to the need to use force;

·          APD officers use less lethal force, including electronic controlled weapons, on people who are passively resisting, non-threatening, observably unable to comply with orders or pose only a minimal threat to the officers; and

·          Encounters between APD officers and persons with mental illness and in crisis too frequently result in a use of force or a higher level of force than necessary.

The department also found systemic deficiencies of the APD which contribute to these three patterns, including: deficient policies, failed accountability systems, inadequate training, inadequate supervision, ineffective systems of investigation and adjudication, the absence of a culture of community policing and a lack of sufficient civilian oversight.

The department’s investigation involved an in-depth review of APD documents, as well as extensive community engagement.  The department reviewed thousands of materials, including written policies and procedures, internal reports, data, video footage and investigative files.  Department attorneys and investigators, assisted by policing experts, also conducted interviews with APD officers, supervisors and command staff, city officials, and with hundreds of community members and local advocates.

“We are very concerned by the results of our investigation and look forward to working with the city of Albuquerque to develop a set of robust and durable reforms,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “Our work to assist police departments around the nation is intended to advance important principles.  Holding police accountable for constitutional practices improves public confidence, promotes public safety and makes the job of providing police services safer, easier and more effective.  Public trust has been broken in Albuquerque, but it can be repaired through this process.”    

“ Today’s groundbreaking announcement marks a critical milestone in addressing problems that have plagued our community and the Albuquerque Police Department for years,” said Acting U.S. Attorney Damon Martinez for the District of New Mexico.  “These findings come at a unique time for the city and the Albuquerque Police Department and provide a blueprint for changing the culture of the Albuquerque Police Department and for rebuilding broken relationships with the community it serves.  Although there are difficult and systemic issues to resolve, we embrace these challenges and are very optimistic for the future of the Albuquerque Police Department .”

The Justice Department looks forward to continued cooperation with the city and the Albuquerque Police Department to resolve these findings under mutually agreeable terms that will provide accountability to the public and accomplish the remedial measures within a fixed period of time. 

The full report can be found at the department website and the U.S. Attorney’s Office website .  For more information about the Justice Department’s Civil Rights Division, please visit the division website .  Any comments or concerns regarding the report can be directed via email or to 1-877-218-5228.

The U.S. District Court for the Southern District of Mississippi permanently barred Tamara Brock from preparing federal tax returns for others, the Justice Department announced today.  Brock agreed to the entry of a final judgment of permanent injunction, which was entered by the court on April 10, 2014.

The complaint alleged that Brock, formerly a franchisee with Liberty Tax Service, prepared federal income tax returns for customers in Moss Point, Miss., and Pensacola, Fla.  According to the complaint, Brock prepared federal tax returns that included fictitious education expenses to qualify her customers to receive or to maximize the American Opportunity Credit on their federal tax returns.

The judgment also requires Brock to turn over to the United States a list of all individuals and entities for whom she has provided tax preparation services since Jan. 1, 2011, and to notify these customers of the permanent injunction against her.

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

Related Materials:

United States v. Tamara Brock
Stipulated Judgment of Permanent Injunction Against Tamara Brock

WASHINGTON – El Departamento de Justicia anunció hoy que realizó un acuerdo con el Poder Judicial de Rhode Island para asegurar que personas con conocimientos limitados del inglés [Limited English Proficient (LEP)] tengan acceso a asistencia idiomática oportuna y competente, sin costo en todos los procesos, servicios y procesos judiciales en todo el sistema judicial del estado.

Como parte del acuerdo, el Departamento aprobó el Plan de Acceso Idiomático del Poder Judicial de Rhode Island, el que detalla la labor a realizarse a fin de garantizar la asistencia idiomática integral en todo el sistema judicial. El plan exige la traducción constante de formularios y carteles en edificios de los tribunales a idiomas comúnmente hablados en Rhode Island, tales como español, portugués, camboyano y caboverdiano. El Poder Judicial de Rhode Island también creó un Aviso de Derecho a la Asistencia Idiomática, el que indica que el tribunal proveerá sin costo un intérprete competente para cualquier parte o testigo con conocimientos limitados del inglés y explica el procedimiento para solicitar un intérprete o una traducción del aviso a otros idiomas. Se debe entregar el aviso a cada demandado en un proceso judicial y el mismo está disponible en varios idiomas. En casos civiles, se debe incorporar o anexar el aviso a los alegatos iniciales a ser entregados al demandado. En casos penales, se debe incorporar o anexar el aviso a los documentos de acusación inicial entregados al demandado, en los formularios completados por un comisionado de fianzas o provistos por el tribunal al demandado en su comparecencia inicial al tribunal. Además, existe un formulario de queja sobre servicios idiomáticos disponible en varios idiomas en el portal del tribunal en Internet, en la oficina del secretario del juzgado y la Oficina de Intérpretes Judiciales.

El plan fue exigido en 2012 por el Presidente de la Corte Suprema Paul A. Suttell por medio de una orden ejecutiva emitida después de extensas deliberaciones con el departamento. La Oficina de Intérpretes Judiciales y la Oficina Administrativa de Tribunales Estatales analizarán anualmente la eficacia del plan y considerarán cambios para mejorar sus políticas y procedimientos. El plan incluye una importante exigencia de contar con las opiniones de las partes interesadas y consultar a las mismas. El acuerdo también exige que el tribunal tome medidas adicionales en colaboración con el departamento y dispone un período de al menos dos años de monitoreo y asistencia técnica.

"Elogiamos al Presidente de la Corte Suprema Suttell, el personal del Poder Judicial de Rhode Island y otras partes interesadas de Rhode Island que contribuyeron para esta proceso, por su labor constante y determinación compartida de que la justicia y la igualdad en los tribunales de Rhode Island no se limite a las personas con dominio del inglés", señaló la Secretaria de Justicia Auxiliar Interina Jocelyn Samuels de la División de Derechos Civiles.

La demanda fue resuelta como parte de la iniciativa de la Sección de Coordinación y Cumplimiento Federal [Federal Coordination and Compliance Section (FCS)] de la División de Derechos Civiles para asegurar que los tribunales estatales cumplan con las exigencias de acceso idiomático del Título VI. Para garantizar que no se le niegue justicia a ninguna persona LEP debido a la falta de provisión de servicios idiomáticos por parte de un tribunal, el Equipo de Tribunales de la FCS, liderado por la Consejera Legal Especial Christine Stoneman, brinda orientación en políticas y asistencia técnica a sistemas judiciales estatales y hace valer la ley en todo el país. Recientemente, la FCS lanzó una Herramienta para la planificación y asistencia del acceso idiomático y resolvió una queja con el Tribunal Superior del Condado de King en Washington.

Estuvo a cargo del caso de Rhode Island el Abogado de la FCS Paul M. Uyehara de la División de Derechos Civiles, con la asistencia del Secretario de Justicia Auxiliar Ndidi N. Moses en calidad de Abogado Asignado al FCS.

Para obtener más información sobre el Título VI y la Ley de Calles Seguras, o para obtener copias de la carta, visite este portal.

WASHINGTON – Después de una amplia investigación, el Departamento de Justicia anunció hoy que el Departamento de Policía de Albuquerque (DPA) ha estado involucrado en patrones o prácticas del uso excesivo de fuerza, mismos que violan la Constitución y la ley federal. Esta mañana el Departamento de Justicia hizo entrega de una carta al alcalde de Albuquerque, Richard J. Berry y al jefe de policía Gorden Eden la cual expone los resultados de la investigación.

La investigación comenzó el 27 de noviembre, 2012 y fue llevada a cabo conjuntamente por la División de Derechos Civiles y la oficina del Procurador Federal por el Estado de Nuevo México. La investigación examinó si el DPA toma parte en un patrón o en una práctica no constitucional del uso de fuerza excesiva, incluyendo fuerza mortal, así como cualquier patrón o práctica de violación de ley. La investigación no evaluó si cualquier conducta violaba leyes criminales. Casos específicos han sido referidos a la Sección Criminal de la División de Derechos Civiles para ser considerados.

El Departamento de Justicia encontró causa razonable para creer que DPA está involucrado en un patrón que practica del uso excesivo de fuerza, violando así la Cuarta Enmienda de la Constitución de los Estados Unidos. El departamento encontró específicamente tres patrones de fuerza excesiva:

• Oficiales del DPA muy frecuentemente utilizan fuerza mortal contra personas que representan una amenaza mínima y en situaciones donde la conducta de los oficiales exalta el peligro y contribuye a la necesidad del uso de fuerza;
• Oficiales del DPA utilizan fuerza menos letal, incluyendo armas de control electrónico, contra personas quienes están resistiendo pasivamente, no son una amenaza, quienes visiblemente no pueden obedecer órdenes o que presentan solamente una amenaza mínima a los oficiales; y
• Encuentros entre oficiales del DPA y personas con enfermedad mental y en crisis, muy frecuentemente resultan en el uso de fuerza o en el uso de fuerza a un nivel más alto de lo necesario.

El Departamento de Justicia también encontró deficiencias sistémicas con el DPA las cuales contribuyen a estos tres patrones, incluyendo: políticas deficientes, sistemas de responsabilidad fallidos, entrenamiento inadecuado, supervisión inadecuada, sistemas de investigación y adjudicación inefectivos, la ausencia de una cultura de colaboración ciudadana, y la falta de suficiente vigilancia civil.

La investigación del departamento involucró una revisión profunda de documentos del DPA, así como la participación extensiva de la comunidad. El departamento revisó miles de páginas de documentos, incluyendo políticas escritas y procedimientos, reportes internos, data, videos y archivos investigativos. Abogados del departamento e investigadores asistidos por expertos en materia policial, también llevaron a cabo entrevistas con oficiales del DPA, supervisores y personal de comando, oficiales de la ciudad; y cientos de entrevistas a miembros de la comunidad y defensores locales.

"Estamos muy preocupados por los resultados de nuestra investigación y esperamos poder trabajar con la ciudad de Albuquerque para desarrollar unas reformas firmes y duraderas", dijo Jocelyn Samuels, Procuradora General Auxiliar Interina de Derechos Civiles. "Nuestro trabajo de ayudar a los departamentos de policía alrededor de la nación, tiene la intención de fomentar principios importantes. Hacer a la policía responsable de prácticas Constitucionales mejora la confianza pública, promueve la seguridad pública y hace que el trabajo de proveer servicios policíacos sea más seguro, más fácil y más efectivo. La confianza pública se ha roto en Albuquerque, pero se puede reparar a través de este proceso".

"La primicia de hoy marca un importante punto de partida para hacerle frente a los problemas que han plagado a nuestra comunidad y al Departamento de Policía de Albuquerque por años", dijo Damon Martínez, Procurador Federal Interino por el Distrito de Nuevo México. "Estos resultados llegan en un tiempo único para la ciudad y para el Departamento de Policía de Albuquerque y proveerán un plan de acción para cambiar la cultura del Departamento de Policía de Albuquerque y para reconstruir la relación con la comunidad a la cual sirve. A pesar de que hay asuntos difíciles y sistémicos por resolver, aceptamos estos retos y estamos muy optimistas por el futuro del Departamento de Policía de Albuquerque".

El Departamento de Justicia espera seguir contando con la cooperación de la Ciudad y del Departamento de Policía para resolver estos hallazgos bajo términos mutuamente aceptables, que darán respuestas al público y rendirán medidas correctivas dentro de un tiempo determinado.

Un reporte completo puede ser encontrado en http://justice.gov/crt/about/spl/findsettle.php y http://www.justice.gov/usao/nm/APD.html. Para más información sobre la División de Derechos Civiles del Departamento de Justicia, por favor visite el www.justice.gov/crt/. Cualquier comentario o duda sobre el reporte puede ser dirigido a community.albuquerque@usdoj.gov o 1-877-218-5228.

Resumen de Hallazgos Departamento de Policía de Albuquerque

The Justice Department today announced it has reached an agreement with the Rhode Island Judiciary to ensure that limited English proficient (LEP) individuals will have access to timely and competent language assistance at no charge in all court proceedings, services and programs throughout the state court system.

As part of the agreement, the department approved the Rhode Island Judiciary’s Language Access Plan, which outlines the efforts to be undertaken in order to ensure comprehensive language assistance throughout the court system.  The plan requires ongoing translations of forms and signs in court buildings into commonly spoken languages in Rhode Island, such as Spanish, Portuguese, Cambodian and Cape Verdean.  The Rhode Island Judiciary also created a Notice of Right to Language Assistance which states that the court will provide a competent interpreter for any limited English proficient party or witness at no charge, and explains the procedure to request an interpreter or a translation of the notice into other languages.  The notice must be provided to each defendant in a proceeding and is available in multiple languages.  In civil matters, the notice must be incorporated in or attached to the initial pleading to be served upon the defendant.  In criminal matters, the notice must be incorporated in or attached to the initial charging documents provided to the defendant, in the forms completed by a bail commissioner or provided by the court at the defendant’s her initial court appearance.  In addition, a language services complaint form is available in multiple languages on the court’s website, in the court clerk’s office and at the Office of Court Interpreters. 

The plan was mandated in 2012 by Chief Justice Paul A. Suttell through an executive order that was issued after extensive consultation with the department.  The Office of Court Interpreters and the Administrative Office of State Courts will review the effectiveness of the plan and consider changes to improve its policies and procedures on an annual basis.  The plan includes an important requirement for input from and consultation with stakeholders.  The agreement also requires additional steps to be taken by the court in consultation with the department and provides for at least two years of monitoring and technical assistance.

“Chief Justice Suttell, the Rhode Island Judiciary staff and the other Rhode Island stakeholders who contributed to this process are to be commended for their ongoing efforts and shared determination that justice and equality in Rhode Island courts not be restricted to those proficient in English,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.

The complaint was resolved as part of the initiative by the Federal Coordination and Compliance Section (FCS) of the Civil Rights Division to ensure that state courts comply with the language access requirements of Title VI.  To ensure that no LEP individual is denied justice due to a court’s failure to provide language services, the  FCS Courts Team, led by Special Legal Counsel Christine Stoneman, provides policy guidance and technical assistance to state court systems and undertakes enforcement actions across the country.  Recently, FCS released a Courts Language Access Planning and Assistance Tool and resolved a complaint with the King County Superior Court in Washington.

The Rhode Island matter was handled by FCS Attorney Paul M. Uyehara of the Civil Rights Division with the assistance of Assistant U.S. Attorney Ndidi N. Moses, who was serving as a Detail Attorney to FCS.

For more information about Title VI and the Safe Streets Act, or to obtain copies of the settlement documents, please visit this website.

After a bench trial handled by the Department of Justice, the U.S. District Court for the Eastern District of New York has entered an injunction against New York City Fish Inc., Maxim Kutsyk, Pavel Roytkov and Leonid Staroseletesky under the federal Food, Drug and Cosmetic Act (FDCA).  The court found that each of the defendants had violated the FDCA in the past and that the court had “scant assurance” that defendants would comply with food safety laws going forward.  The defendants manufacture ready-to-eat fishery products, including smoked salmon and mackerel, and operate out of a food processing facility located at 738 Chester Street in Brooklyn.

In its verdict, the court found that each of the defendants had failed to keep the Chester Street Facility in compliance with current Good Manufacturing Practices, failed to keep records necessary to evaluate food safety and processed fish in a way that could lead to Listeria monocytogenes (L. mono) contamination.  People who eat food contaminated with this bacterium can contract the disease listeriosis, which can be serious—even fatal—for vulnerable groups such as newborns and those with impaired immune systems.  Complications from the disease can also lead to miscarriage.  The court also found that, during several inspections dating back to 2006, FDA testing revealed the presence of L. mono in the facility.

 
The court ordered injunction provides for important remedies.  Among other provisions, the injunction prohibits defendants from operating the Chester Street Facility until an independent laboratory and an independent sanitation expert develop a Listeria Monitoring Program satisfactory to the FDA and until the FDA is satisfied that defendants will fully comply with that program on an ongoing basis.  The facility cannot begin operating again until defendants have cleaned and sanitized the Chester Street Facility and laboratory testing shows that L. mono is no longer present in the facility.

The lawsuit was handled by Trial Attorney Adrienne Fowler of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Elliot M. Schachner of the Eastern District of New York, with the assistance from FDA Assistant Chief Counsel for Enforcement Julie Dohm.

Deputy Attorney General James M. Cole will preside over the National Crime Victims’ Rights Service Awards ceremony 2 p.m. Wed., April 9, honoring ten individuals and programs for exceptional perseverance and innovation in advancing crime victims’ rights.  The Department’s Office for Victims of Crime leads communities across the country in observing National Crime Victims’ Rights Week every year and hosts the award ceremony to honor outstanding work on behalf of crime victims. 

“Through their courage and critical contributions to assist and empower victims, these individuals and organizations have given hope to countless Americans victimized by crime--even under the most difficult circumstances,” said Attorney General Eric Holder.  “I am proud to recognize these extraordinary advocates by celebrating their achievements and assure them that the Department of Justice is more determined than ever to help ensure their continued success.”

“We are humbled and proud to recognize these extraordinary individuals, teams, and organizations for their outstanding service” said Deputy Attorney General Cole. “These compassionate honorees have become beacons of hope for so many others who have endured shock and deep sadness in the face of too many incidents involving violence and loss.”

President Reagan proclaimed the first Victims’ Rights Week in 1981, calling for renewed emphasis and sensitivity to the rights of victims.  National Crime Victims’ Rights Week is observed this year from April 6–12, and the theme is “30 Years: Restoring the Balance of Justice.”

The following is a list of the award recipients nominated by their colleagues and selected by the Attorney General:

Allied Professional Award:  Recognizing an individual or organization outside the victim assistance field for services or contributions to the victims’ field. Recipient: Forensic Nurse Examiner Team, Christiana Care Health System, Newark, Del.

Crime Victims Financial Restoration Award: Recognizing individuals, programs, organizations or teams that developed innovative ways of funding services for crime victims or instituted innovative approaches for securing financial restoration for crime victims. Recipient: Mi Yung C. Park, trial attorney, Child Exploitation and Obscenity Section, Criminal Division, U.S. Department of Justice, Washington, D.C.

Federal Service Award: Recognizing the extraordinary efforts of federal agency personnel who lead initiatives or reforms and make extraordinary contributions that impact victims of federal, tribal, and military crimes, or more broadly promote victims’ rights and services for underserved victims nationally and internationally. Recipients : FBI Victim Assistance Program and U.S. Attorney’s Office for the District of Massachusetts; and the U.S. Air Force Special Victims’ Counsel Program.

National Crime Victim Service Award:  Honoring extraordinary efforts in direct service to crime victims. Recipients: DC Safe, Washington, D.C.; and Hazel Heckers, victim advocate, Denver, Colo.

Crime Victims’ Rights Award:  Honoring those whose efforts to advance or enforce crime victims’ rights have benefited crime victims at the state, tribal, or national level. Recipient: Jamie Balson, prosecutor, Maricopa County District Attorney’s Office, Peoria, Ariz.

Ronald Wilson Reagan Public Policy Award:  Honoring leadership, innovation and vision that lead to noteworthy changes in public policy that benefit crime victims. Recipient: Pat Tuthill, advocate, Tallahassee, Fla.

Professional Innovation in Victim Service Award:  Recognizing a program, organization or individual who has helped to expand the reach of victims’ rights and services. Recipient : The Rapid DNA Service Team, Richmond, Calif.

Special Courage Award:   Recognizing extraordinary bravery in the aftermath of a crime or courageous act on behalf of a victim or potential victim. Recipient: Paul Traub, Burnsville, Minn.

Descriptive narratives and videos of the contributions of recipients are available at the Office for Victims of Crime’s Gallery .

With the annual tax filing deadline approaching on April 15, today the Justice Department announced highlights of its work during the past year to enforce the nation’s tax laws.  The Tax Division has worked with the Internal Revenue Service (IRS) to carry out their combined tax enforcement missions in critical areas, including prosecuting tax fraud and evasion, halting the spread of abusive tax shelters, tracking down tax cheats who use offshore accounts and combating stolen identity refund fraud.  Previously, the division announced that it has shut down more than 60 fraudulent tax preparers over the past 12 months.

The division’s primary purpose is to enforce the nation’s tax laws fully, fairly and consistently through both criminal and civil litigation.  Some of the division’s accomplishments from the past fiscal year (FY 2013) include:

·          Favorable outcomes in approximately 95 percent of all civil and criminal cases litigated by the division;

·          The division authorized 749 grand jury investigations and 1,495 prosecutions of individual defendants;

·          Division prosecutors obtained 125 indictments and 114 convictions (not including  the additional criminal tax prosecutions handled exclusively by U.S. Attorneys’ Offices nationwide);

·          The division collected over $235 million through affirmative civil litigation and retained over $975 million through defensive tax refund and other litigation and;

·          Taking into account the tax dollars collected and refunds not paid as a result of the division’s successful litigation efforts, over the past five fiscal years (FY 2009-2013), the division’s attorneys have returned an average of $14 for each dollar invested to the U.S. Treasury.

“The taxes paid by honest taxpayers pay for important government functions, from support for our military to the operation of our national parks,” said Assistant Attorney General Kathryn Keneally.  “Those who would cheat their neighbors and fellow citizens should know that we are committed to enforcing the tax laws.  The department will continue to use all available law enforcement tools to recover tax revenue and to punish tax offenders.”

“The IRS and Justice Department continue to make important progress on issues ranging from identity theft and offshore evasion to fraudulent return preparers and abusive tax shelters,” said IRS Commissioner John Koskinen.  “As the April 15 deadline approaches, taxpayers should remember that we are working year-round to ensure that everyone plays by the rules and follows the law.  The hard work of the Justice Department and the IRS can be seen in the long list of criminal and civil tax enforcement actions across the country during the past year.”

Prosecuting Tax Offenses

The division has supervisory authority over all criminal conduct involving federal tax laws.  The division has always maintained the investigation and prosecution of tax crimes as a central focus, including tax evasion, failure to file returns, submission of false tax returns and other conduct designed to violate federal tax laws.  Division attorneys are also particularly adept at prosecuting tax defiers, individuals who purposefully refuse to comply with tax laws and use frivolous arguments to support their positions.

Some of the division’s criminal tax prosecution highlights from the past 12 months include:

·          April 2014 – Tommy Edward Clack, a paving contractor, was sentenced by a federal court in Winston-Salem, N.C., to serve 66 months in prison for filing a false 2007 tax return and making a false statement to a federally insured bank to obtain a mortgage.  From 2004 through 2007, Clack underreported income that he received from his paving businesses, which caused a tax loss of more than $1.3 million.

·          March 2014 – Matthew Bender, a tax return preparer from Detroit, was convicted for aiding and assisting in the preparation of false income tax returns for his clients, as well as failing to report the income he earned as a return preparer.  Bender prepared over 3,000 tax returns between 2006 and 2011 and earned over $500,000 in tax preparation fees, which he failed to report to the IRS.  Bender placed false deductions on customers’ returns, which caused their tax refunds to be inflated.

·          December 2013 – John Hoang, an attorney and certified public accountant from Woodbridge, Va., was sentenced to serve four years in prison for aiding and assisting in the preparation of false tax returns for his clients, resulting in a tax loss of over $1.5 million.

·          July 2013 – Timothy Turner, the self-proclaimed president of the so-called sovereign citizen group Republic for the united States of America (RuSA), was sentenced to serve 18 years in prison for conspiracy to defraud the United States, attempting to pay taxes with fictitious financial instruments, attempting to obstruct and impede the IRS, failing to file a 2009 federal income tax return and falsely testifying under oath.

·          July 2013 – Richard Whatley, a former owner of an employee leasing company, was sentenced to serve 51 months in prison for failing to account for and pay over employment taxes. 

• May 2013 – Joseph Rizzuti of Stuart, Fla., was sentenced to serve 80 months in prison for conspiracy to commit wire fraud and obstructing the IRS.  Rizzuti, an accountant, interfered with the IRS’ ability to collect taxes owed by two clients and admitted to engaging in a conspiracy to commit wire fraud.

Stopping the Spread of Tax Shelters

The division also plays a critical role in the government s efforts to combat abusive tax shelters.  According to U.S. Treasury estimates, abusive tax shelters for large corporations and high-income individuals cost the government billions of dollars annually.  In recent years, the division’s civil litigators at both the trial and appellate levels have won important victories in cases involving tax shelters with names such as STARS, Son of BOSS, FOCus, BLIPS, OPIS, DAD and SILO/LILO.

Some of the division’s successes over the past 12 months include:

·          December 2013 – In United States v. Woods, the Supreme Court unanimously held that a 40 percent gross valuation misstatement penalty applies when a taxpayer engages in an abusive tax shelter scheme that lacks economic substance.

·          December 2013 – The division successfully defended a favorable Tax Court decision in Blum v. Commissioner, a case involving the Offshore Portfolio Investment Strategy (OPIS) tax shelter.  The 10th Circuit Court of Appeals held that the taxpayer was not entitled to a $45 million loss generated by the OPIS transaction because the transaction lacked economic substance, and that valuation misstatement penalties should be imposed.  As the court explained, the “intricacies of this offshore financial transaction and the fog of plausible deniability surrounding it cannot make up for the clarity of the big picture: this was a transaction designed to produce nothing more than tax advantages.”

·          September 2013 – After a month-long trial, the division prevailed in the Court of Federal Claims against BB&T Corporation, which had claimed more than $660 million in tax benefits based on a sham transaction known as Structured Trust Advantaged Repackaged Securities (STARS).  In Salem Financial Inc. v. United States, the court ruled that BB&T was not entitled to the tax benefits and imposed $112 million in penalties.  The court concluded that the conduct of BB&T, the designers and marketers of the STARS transaction and the law firm that provided tax advice supporting the transaction  was “nothing short of reprehensible” and that the considerable effort put into the transaction was a “waste of human potential.”  This case is currently on appeal.

·          August 2013 – The division successfully defended a favorable district court decision in WFC Holdings Corp. v. United States, a case involving a contingent-liability tax shelter.  The Eighth Circuit Court of Appeals found that the literal language of the Internal Revenue Code supported the company’s tax treatment of the transaction, but nonetheless disallowed the company’s asserted tax loss and resulting $82 million tax refund because the transaction lacked economic substance and a subjective business purpose.

Investigating Offshore Evasion

The division continues to play a leading role in investigations and prosecutions involving the use of foreign tax havens and remains committed to investigating offshore tax evasion around the globe.  The division’s current offshore program began in 2008, with the investigation of UBS, which resulted in the 2009 UBS deferred prosecution agreement .  In January 2013, the U.S. Attorney's Office in the Southern District of New York secured the guilty plea of Wegelin Bank, the oldest private bank in Switzerland and the first foreign bank to plead guilty to felony tax charges.  In July 2013, Liechtensteinische Landesbank AG, a bank based in Vaduz, Liechtenstein, entered into a non-prosecution agreement and agreed to pay more than $23.8 million stemming from its offshore banking activities and turned over more than 200 account files of U.S. taxpayers who held undeclared accounts at the bank.

Since 2009, the department has publicly charged 74 account holders and 38 bankers and advisors with violations arising from offshore banking activities.  So far, 61 account holders have pleaded guilty, seven were convicted at trial and five await trial.  Six bankers and financial advisors have pleaded guilty and several are fugitives.  In October 2013, Raoul Weil, formerly the third highest banking official at UBS and the subject of a 2008 indictment for his role in assisting U.S. clients to evade taxes, was arrested in Italy, waived extradition and is now awaiting trial.

Additional highlights from the division and the U.S. Attorneys’ Offices include:

·          March 2014 – Former Swiss banker Andreas Bachmann pleaded guilty to engaging in a wide-ranging conspiracy to aid and assist U.S. customers in evading their taxes by concealing assets and income in secret Swiss bank accounts. 

·          March 2014 – Joshua Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted for money laundering and conspiracy to launder monetary instruments relating to assisting U.S. citizens in hiding assets from the U.S. government.  According to the indictment, the Caribbean-based defendants assisted undercover law enforcement agents, posing as U.S. clients, in laundering criminal proceeds through an offshore entity in order to conceal thetrue owner. 

·          March 2014 – Victor Lipukhin, a Russian citizen and former lawful permanent U.S. resident, was indicted for attempting to interfere with the administration of the internal revenue laws and for filing false tax returns relating to several secret Swiss bank accounts.  According to the indictment, Lipukhin maintained accounts worth more than $10 million at UBS AG in the name of sham entities based in the Bahamas, failed to report his ownership of the accounts and used fictitious mortgages when purchasing real estate in the U.S. to further conceal ownership of the accounts.

·          October 2013 – Ashvin Desai, the owner of a medical device company in San Jose, Calif., was convicted of filing false tax returns, aiding and assisting in the preparation of false tax returns, and failing to file Reports of Foreign Bank and Financial Accounts (FBARs) in connection with accounts held at The Hongkong and Shanghai Banking Corporation Ltd. (HSBC) in India that generated over $1.1 million in interest income.

·          October 2013 – Patricia Lynn Hough, a physician and owner of two Caribbean-based medical schools, was convicted of conspiring to defraud the U.S. and filing false tax returns.  Hough concealed millions of dollars in assets and income in offshore bank accounts held at UBS and other foreign banks. 

·          April 2013 – Arizona businessmen Stephen M. Kerr and Michael Quiel were convicted after a jury trial of filing false individual tax returns, and Kerr was additionally convicted of failing to file an FBAR related to secret Swiss bank accounts.  Co-defendant Christopher Rusch, a San Diego attorney who assisted Kerr and Quiel, pleaded guilty to federal tax charges in February 2013.  All three men were sentenced to serve 10 months in federal prison.

The department is also successfully using a variety of law enforcement tools to gather information for use in future enforcement efforts.  In two separate actions in 2013, the U.S. District Court in the Southern District of New York authorized the IRS to issue “John Doe” summonses to several U.S. banks that hold correspondent bank accounts for Wegelin & Co. , Zurcher Kantonalbank and The Bank of N.T. Butterfield & Son Limited through which the foreign banks move money into and out of the United States.  The division secured a similar order from the U.S. District Court in the Northern District of California relating to a U.S. account used by Canadian Imperial Bank of Commerce FirstCarribean International Bank .  Together, the summonses will allow the U.S. government to determine the identity of U.S. taxpayers who may hold accounts in the Bahamas, Barbados, Cayman Islands, Guernsey, Hong Kong, Malta, Switzerland and the United Kingdom.

The department also announced a program on Aug. 29, 2013, that encouraged Swiss banks to cooperate in the department’s ongoing investigations of the use of foreign bank accounts to commit tax evasion.  The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the Program) allows Swiss banks not currently under investigation to come forward to provide cooperation and pay steep penalties in return for the possibility of a non-prosecution agreement or deferred prosecution agreement.  The Program expressly excluded banks that were previously authorized for investigation in connection with their Swiss banking activity, 14 at the time of the announcement, and expressly excludes all individuals.  The department has received over 100 letters of intent to participate in the Program from Swiss entities.  Every Swiss bank that cooperates under the Program represents an opportunity to obtain valuable law enforcement information.

Combating Identity Theft

The division, in conjunction with the IRS and U.S. Attorneys nationwide, has made the investigation and prosecution of individuals who engage in stolen identity refund fraud (SIRF) a high priority.  The division is targeting individuals involved in all stages of these schemes, including those who illegally obtain Social Security numbers and other personal identifying information, those who file the false returns with the IRS, those who facilitate cashing the checks or otherwise obtaining the refunds and those who mastermind or promote these scams.

Some highlights of the division’s success in this area include:

·          October 2013 – Vernon Harrison, a corrupt U.S. Postal Service mail carrier, was sentenced to serve nine years and three months in federal prison.  According to court documents, tax refunds were placed on debit cards and mailed to addresses on Harrison’s postal route in Montgomery, Ala., which he then stole from the mail and provided to a co-conspirator in exchange for cash. 

·          September 2013 – Lea’Tice Phillips, an employee of an Alabama state agency, was sentenced to serve seven years and 10 months in federal prison.  As alleged in court documents, Phillips had access to databases that contained personal identifying information and conspired with others to file false tax returns using identities stolen from the database.

·          July 2013 – Angela Myers, who operated a tax preparation business located in Baton Rouge, La., was sentenced to serve 11 years in federal prison.  According to court documents, Myers electronically filed false claims for refunds using the names and social security numbers of identity theft victims, many of whom were nursing home patients. 

Return Preparer Fraud

Corrupt accountants and fraudulent tax return preparers present a serious law enforcement concern.  Some accountants and return preparers dupe unwitting clients into filing fraudulent returns, while others serve as willing enablers by providing a veneer of legitimacy for clients predisposed to cheat.  The division’s civil injunction program, now more than 10 years old, continues to be an effective way to shut down fraudulent return preparers and illegal tax-scheme promoters – especially during filing season – thereby reducing the harm to the public while potential criminal investigations are ongoing.  In February, the division announced recent successes in its civil injunction program including more than 60 injunctions entered against both large-scale tax return preparation franchises and smaller, independent return preparers and promoters across the country.

Some of the division’s successes include:

·           November 2013 – the division concluded civil actions resulting in permanent injunctions against ITS Financial LLC, the parent company of the Instant Tax Service franchise located in Dayton, Ohio.  Earlier in the year, the division obtained injunctions against Instant Tax franchises in Kansas City, Kan. , Los Angeles and Indianapolis .  Instant Tax Service claimed to be the fourth-largest tax-preparation firm in the nation.

·          September 2013 – the division obtained injunctions that   permanently barred the owners, Markey Granberry and Derrick Robinson, as well as Eumora Reese, a former manager, of Mo' Money Taxes, tax-preparation chain based in Memphis, Tenn., that at one time operated as many as 300 offices in 18 states, from preparing tax returns for others and owning or operating a tax return preparation business.  Earlier, in March 2013, a federal district court in Tennessee   permanently shut down  a Nashville, Tenn., licensee of Mo' Money Taxes LLC and MoneyCo USA LLC.

·          Numerous smaller tax return preparation businesses and individual preparers around the country who were engaging in fraudulent practices were also subjects of injunctions, including tax return preparers in Indiana , Maryland , Missouri , Texas , Georgia , South Carolina , Florida and California .

·          October 2013 – a federal court permanently barred Tobias Elsass and his companies from preparing federal tax returns, promoting the availability of theft loss deductions or engaging in any other tax-related business.  The court found that Elsass and Fraud Recovery Group promoted a nationwide scheme that falsely informed customers that they were entitled to claim large theft loss tax deductions, and then prepared the tax returns that improperly claimed such deductions.

Hiding income offshore, identity theft, and return preparer fraud are all part of the IRS’s “ Dirty Dozen Tax Scams .”  More information about the Tax Division’s civil and criminal enforcement efforts in these and other areas is available on the Justice Department website .  For more on the Dirty Dozen Tax Scams, see the IRS website and the IRS YouTube Channel .

ZAO Hewlett-Packard A.O. (HP Russia), an international subsidiary of the California technology company Hewlett-Packard Company (HP Co.), has agreed to plead guilty to felony violations of the Foreign Corrupt Practices Act (FCPA) and admit its role in bribing Russian government officials to secure a large technology contract with the Office of the Prosecutor General of the Russian Federation.

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

A criminal information filed today in U.S. District Court for the Northern District of California charges HP Russia with conspiracy and substantive violations of the anti-bribery and accounting provisions of the FCPA. In addition, the government is entering into criminal resolutions with HP subsidiaries in Poland and Mexico relating to contracts with Poland’s national police agency and Mexico’s state-owned petroleum company, respectively. Pursuant to a deferred prosecution agreement, the department filed a criminal information charging Hewlett-Packard Polska, Sp. Z o.o. (HP Poland) with violating the accounting provisions of the FCPA. Hewlett-Packard Mexico, S. de R.L. de C.V. (HP Mexico) has entered into a non-prosecution agreement with the government pursuant to which it will forfeit proceeds and admit and accept responsibility for its misconduct as set forth in the statement of facts. In total, the three HP entities will pay $76,750,224 in criminal penalties and forfeiture.

In a related FCPA matter, HP Co. settled with the U.S. Securities and Exchange Commission (SEC) and will pay an additional $31,472,250 in disgorgement and prejudgment interest, bringing the total amount of U.S. criminal and regulatory penalties paid by HP Co. and its subsidiaries (collectively, HP) to more than $108 million.

“Hewlett-Packard subsidiaries, co-conspirators or intermediaries created a slush fund for bribe payments, set up an intricate web of shell companies and bank accounts to launder money, employed two sets of books to track bribe recipients, and used anonymous email accounts and prepaid mobile telephones to arrange covert meetings to hand over bags of cash,” said Deputy Assistant Attorney General Swartz. “Even as the tradecraft of corruption becomes more sophisticated, the department is staying a step ahead of those who choose to violate our laws, thanks to the diligent efforts of U.S. prosecutors and agents and our colleagues at the SEC, as well as the tremendous cooperation of our law enforcement partners in Germany, Poland and Mexico.”

“The United States Attorney’s Office, working alongside our colleagues in the Criminal Division, will vigorously police any efforts by companies in our district to illegally sell products to foreign governments using bribes or kickbacks in violation of the FCPA,” said U.S. Attorney Haag. “Today’s resolution with HP reinforces the fact that there is no double standard: U.S. businesses must respect the same ethics and compliance standards whether they are selling products to foreign governments or to the United States government.”

“This case demonstrates the FBI's ability to successfully coordinate with our foreign law enforcement partners to investigate and bring to justice corporations that choose to do business through bribery and off-the-book dealings,” said Assistant Director in Charge Parlave. “I want to thank the agents who worked on this case in Washington, New York and in our Legal Attaché offices in Mexico City, Moscow, Berlin and Warsaw as well as the prosecutors. Their work ensures a level playing field for businesses seeking lucrative overseas government contracts.”

“This agreement is the result of untangling a global labyrinth of complex financial transactions used by HP to facilitate bribes to foreign officials,” said IRS-CI Chief Weber. “IRS-CI has become a trusted leader in pursuit of corporations and executives who use hidden offshore assets and shell companies to circumvent the law. CI is committed to maintaining fair competition, free of corrupt practices, through a potent synthesis of global teamwork and our dynamic financial investigative talents.”

According to court documents, in 1999, the Russian government announced a project to automate the computer and telecommunications infrastructure of its Office of the Prosecutor General of the Russian Federation (GPO). Not only was that project itself worth more than $100 million, but HP Russia viewed it as the “golden key” that could unlock the door to another $100 to $150 million dollars in business with Russian government agencies. To secure a contract for the first phase of project, ultimately valued at more than € 35 million, HP Russia executives and other employees structured the deal to create a secret slush fund totaling several million dollars, at least part of which was intended for bribes to Russian government officials.

As admitted in a statement of facts, HP Russia created excess profit margins for the slush fund through an elaborate buy-back deal structure, whereby (1) HP sold the computer hardware and other technology products called for under the contract to a Russian channel partner, (2) HP bought the same products back from an intermediary company at a nearly €8 million mark-up and paid the intermediary an additional €4.2 million for purported services, and (3) HP sold the same products to the GPO at the increased price. The payments to the intermediary were then largely transferred through a cascading series of shell companies – some of which were directly associated with government officials – registered in the United States, United Kingdom, British Virgin Islands and Belize. Much of these payments from the intermediary were laundered through off-shore bank accounts in Switzerland, Lithuania, Latvia and Austria. Portions of the funds were spent on travel, cars, jewelry, clothing, expensive watches, swimming pool technology, furniture, household appliances and other luxury goods. To keep track of these corrupt payments, the conspirators inside HP Russia kept two sets of books: secret spreadsheets that detailed the categories of recipients of the corrupt funds and sanitized versions that hid the corrupt payments from others outside of HP Russia. They also entered into off-the-books side agreements. As one example, an HP Russia executive executed a letter agreement to pay €2.8 million in purported “commission” fees to a U.K.-registered shell company, which was linked to a director of the Russian government agency responsible for managing the GPO project. HP Russia never disclosed the existence of the agreement to internal or external auditors or management outside of HP Russia and conducted no due diligence of the shell company.

According to an agreed statement of facts, in Poland, from 2006 through at least 2010, HP Poland falsified HP books and records and circumvented HP internal controls to execute and conceal a scheme to corruptly secure and maintain millions of dollars in technology contracts with the Komenda G³ówna Policji (KGP), the Polish National Police agency. HP Poland made corrupt payments totaling more than $600,000 in the form of cash bribes and gifts, travel and entertainment to the KGP’s Director of Information and Communications Technology. Among other things, HP Poland gave the government official bags filled with hundreds of thousands of dollars of cash, provided the official with HP desktop and laptop computers, mobile devices and other products and took the official on a leisure trip to Las Vegas, which included drinks, dining, entertainment and a private tour flight over the Grand Canyon. To covertly communicate with the official about the corrupt scheme, an HP Poland executive used anonymous email accounts, prepaid mobile telephones and other methods meant to evade detection.

In Mexico, according to the non-prosecution agreement, HP Mexico falsified corporate books and records and circumvented HP internal controls in connection with contracts to sell hardware, software, and licenses to Mexico’s state-owned petroleum company, Petroleos Mexicanos (Pemex). To secure the contracts, HP Mexico understood that it had to retain a certain third-party consultant with close ties to senior executives of Pemex. HP agreed to pay a $1.41 million “commission” to the consultant and hid the payments by inserting into the deal structure another third party, which had been approved by HP as a channel partner. HP Mexico made the commission payment to the channel partner, which in turn forwarded the payments to the consultant. Shortly thereafter, the consultant paid one of the Pemex officials approximately $125,000.

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

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

The Justice Department expresses its deep appreciation for the significant assistance provided by the SEC’s Division of Enforcement, the Polish Anti-Corruption Bureau (CBA), the Polish Appellate Prosecutor’s Office, the Public Prosecutor’s Office in Dresden, Germany, and also acknowledges the contribution of our law enforcement partners in other countries involved in this matter.

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

Robin Smith, 38, a former corrections officer at the Alvin S. Glenn Detention Center in Richland County, S.C., was sentenced to serve 24 months in prison to be followed by three years of supervised release today in the U.S. District Court for the District of South Carolina in Columbia for assaulting a pre-trial detainee with mental illness.  Smith previously pleaded guilty to violating the detainee’s civil rights.

On Feb. 11, 2012, while working as a corrections officer at the Alvin S. Glenn Detention Center, Smith used unreasonable, unprovoked force against an inmate with mental illness.  During the course of a routine search of the victim’s cell, Smith twisted the victim’s wrist and arm and kicked him in the upper body.  During the assault, the victim was lying on the floor of the cell with one hand cuffed, was not combative and posed no threat to Smith. 

“The overwhelming majority of correctional officers dispatch their difficult duties with honor and professionalism,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “The Justice Department will aggressively prosecute those who cross the line to engage in acts of criminal misconduct.”               

“What Robin Smith did was wrong,” said U.S. Attorney Bill Nettles for the District of South Carolina.  “At the base level, Mr. Smith kicked a man around who was so mentally ill he could not understand or follow the directions Smith was giving him.  No just society can allow that kind of conduct on the part of a corrections officer to go unpunished.”  

“Aggressive investigation of civil rights violations is a priority of the FBI and we will continue to work with our law enforcement partners to ensure the public’s trust in law enforcement is not compromised by the type of behavior demonstrated in this case,” said FBI Acting Special Agent in Charge Ann Colbert.  

Today’s sentence resulted from the investigative work of the FBI and the Richland County Sheriff’s Office.  U.S. Attorney Nettles thanked Sheriff Lott and the Richland County Sheriff’s Department for their commitment to the investigation.  The case is being prosecuted by Trial Attorneys Jared Fishman and Nicholas Murphy for the Civil Rights Division and First Assistant U.S. Attorney Beth Drake.

A federal grand jury in Albuquerque, N.M., indicted John Greene, 70, a former captain at the Gallup-McKinley Adult Detention Center (GMADC), on charges related to the sexual assaults of women inmates in his custody.  

Greene is charged with three counts of violating the civil rights of three different victims by engaging in unwanted sexual contact with the victims while they were incarcerated at GMADC.  The indictment also charges Greene with two counts of making material false statements to the FBI.  Specifically, one count charges Greene with lying to the FBI when he denied touching the breasts of a woman in his custody, and the second count charges Greene with lying to the FBI when he denied having any personal contact with another woman in his custody.  The indictment alleges that Greene knew these statements were false at the time that he made them because he had, in fact, touched the breasts of these women.

Greene faces a statutory maximum sentence of 13 years in prison for all of the crimes charged in the indictment.  An indictment is merely an accusation and Greene is presumed innocent unless proven guilty.  

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

WASHINGTON – El Departamento de Justicia anunció hoy que ha llegado a un acuerdo con el Poder Judicial de Nueva Jersey para que el poder judicial del estado brinde servicios integrales de asistencia idiomática a personas con conocimientos de inglés limitados [Limited English Proficient (LEP)]. El departamento informó al Poder Judicial de Nueva Jersey por medio de una carta con fecha del 7 de abril de 2014, que estaba cerrando su indagación, la cual fue abierta en respuesta a quejas de usuarios de los tribunales de que dos condados de Nueva Jersey no eran plenamente accesibles a personas LEP. El departamento abrió su investigación bajo el Título VI de la Ley de Derechos Civiles de 1964, el que prohíbe la discriminación debido al origen nacional por parte de beneficiarios de asistencia federal y exige que dichos beneficiarios brinden acceso significativo a personas LEP.

La carta de resolución entre el departamento y el Poder Judicial de Nueva Jersey describe las acciones e iniciativas que el Poder Judicial de Nueva Jersey ha implementado en respuesta a las inquietudes expuestas durante la indagación federal y la labor que llevarán a cabo para asegurar la provisión continua de asistencia idiomática integral en todo el sistema judicial. Las iniciativas incluyen, entre otras, servicios de intérprete para litigantes, interpretación en lenguaje de señas en tribunales, servicios para asistir a usuarios LEP a llevar a cabo negocios, tales como quioscos bilingües de autoayuda y videos tutoriales, la traducción de más de 340 formularios y folletos de autorrepresentación, avisos traducidos, traducción instantánea (oral) en temas emergentes y urgentes y la publicidad de estos servicios en publicaciones ampliamente leídas por la comunidad local hispana. El Poder Judicial de Nueva Jersey también está realizando una indagación en todo el estado de servicios de intérprete disponibles en cárceles, para cerciorarse que todas las personas LEP tengan acceso significativo a los tribunales.

"El Poder Judicial de Nueva Jersey es un líder en el campo de políticas de interpretación hace muchos años, y felicitamos al Director Administrativo Interino, el Juez Grant, el personal del Poder Judicial de Nueva Jersey y partes interesadas que han trabajado para asegurar que el estado también sea un líder en el acceso a los tribunales de manera más general", señaló la Secretaria de Justicia Auxiliar Interina Jocelyn Samuels de la División de Derechos Civiles. "En especial, aplaudimos la labor de los líderes judiciales estatales y locales de comunicarse con las partes LEP interesadas y sus representantes para abordar estos desafíos".

La demanda fue resuelta como parte de una iniciativa de la Sección de Coordinación y Cumplimiento Federal [Federal Coordination and Compliance Section (FCS)] de la División de Derechos Civiles para asegurar que los tribunales estatales cumplan con las exigencias de acceso idiomático del Título VI. La FCS provee orientación en políticas y asistencia técnica a los sistemas judiciales estatales a través de herramientas como la recientemente lanzada Herramienta de planificación y asistencia del acceso idiomático, y se ocupa de hacer valer la ley en todo el país.

Estuvo a cargo del caso de Nueva Jersey el Secretario de Justicia Auxiliar Ndidi Moses del Distrito de Connecticut, con la asistencia de la Consejera Legal Especial Christine Stoneman de la División de Derechos Civiles.

Para obtener más información sobre el Título VI y la Ley de Calles Seguras, o para obtener copias de documentos relacionados con este caso, visite el portal de LEP en Internet.

The Justice Department announced today that it has reached an agreement with the New Jersey Judiciary to provide comprehensive language assistance services to limited English proficient (LEP) individuals.  In a letter agreement reached on April 7, 2014, the department informed the New Jersey Judiciary that it was closing its review, which was opened in response to complaints by court users that courthouses in two counties in New Jersey were not fully accessible to LEP individuals.  The department opened its inquiry under Title VI of the Civil Rights Act of 1964, which prohibits national origin discrimination by recipients of federal assistance and requires those recipients to provide meaningful access to LEP individuals.

The resolution letter between the department and the New Jersey Judiciary outlines actions and initiatives that the New Jersey Judiciary has implemented to respond to concerns raised during the federal review and the efforts they will undertake to ensure the ongoing provision of comprehensive language assistance throughout the court system.  The initiatives include, among other things, interpreter services for litigants, multi-lingual signage in courthouses, services to assist LEP patrons with transacting business such as bilingual self-help kiosks and tutorial videos, the translation of over 340 statewide pro se forms and brochures, translated notices, sight translation in emergent and time-sensitive matters and the advertisement of these services in publications widely read by the local Latino community.  The New Jersey Judiciary is also conducting statewide reviews of courthouse access and of the interpreter services available in its holding cells to ensure that all LEP individuals have meaningful access to the courts. 

“The New Jersey Judiciary has been a leader in the field of interpreter policies for many years, and we commend Chief Justice Stuart Rabner, Acting Administrative Director Judge Glen Grant, the New Jersey Judiciary staff and stakeholders who have all worked to ensure that the state is also a leader in access in the courthouse more generally,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “We particularly commend the efforts of the state and local court leaders to communicate with LEP stakeholders and their representatives to address these challenges.”

The complaint was resolved as part of an initiative by the Federal Coordination and Compliance Section (FCS) of the Civil Rights Division to ensure that state courts comply with the language access requirements of Title VI.  FCS provides policy guidance and technical assistance to state court systems through tools such as the recently released Courts Language Access Planning and Assistance Tool, and undertakes enforcement actions across the country. 

The New Jersey matter was handled by attorney Ndidi Moses with the assistance of Special Legal Counsel Christine Stoneman.  

For more information about Title VI and the Safe Streets Act, or to obtain copies of documents related to this matter, please visit the LEP website .  A Spanish translation of this release will be available soon at the Justice en Español website .

Five California-based masonry subcontractors and two individuals paid the government nearly $1.9 million to resolve allegations that they violated the False Claims Act by misrepresenting their disadvantaged small business status in connection with military construction contracts, the Department of Justice announced today.  The defendants are Frazier Masonry Corp., F-Y Inc., CTI Concrete & Masonry Inc., Masonry Technology Inc., Masonry Works Inc., Russell Frazier and Robert Yowell. 

“This settlement demonstrates our continuing vigilance to ensure that those doing business with the military do so legally and honestly and that taxpayer funds are not misused,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Among the rules that military contractors and subcontractors must follow are those relating to the use and hiring of small businesses.” 

 
The case involved contracts to construct facilities at Marine Corps bases at Camp Lejeune, N.C., and Camp Pendleton, Calif.  Under the rules of the Small Business Administration, the contracts required that a certain percentage of the work be performed by disadvantaged small businesses.  This contract requirement was intended to benefit small firms owned by women, minorities and other disadvantaged groups. 

 
The government alleged that the defendant masonry subcontractors and their principals misrepresented to the prime contractors that they were small businesses, and that these misrepresentations caused the prime contractors to falsely certify that they had complied with the small business provisions of the contracts in claiming payment.  Russell Frazier previously pleaded guilty in related criminal proceedings to causing false statements.

 
“This settlement demonstrates our commitment to protect taxpayer money and the integrity of the system set up to build military bases for our nation’s military personnel,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker.

 
“DCIS continues our aggressive investigative efforts, in partnership with other agencies, to ensure the integrity of all defense programs, to include military construction contracts, which ultimately benefit our dedicated Warfighters,” said John Khin, Special Agent in Charge, Southeast Field Office, Defense Criminal Investigative Service. 

The settlement resolves allegations filed in two lawsuits by Rickey Howard, a former employee of Frazier Masonry Corp., in federal court in Raleigh, N.C.  The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The act also allows the government to intervene and take over the action, as it did in this case.  Howard will receive $393,383. 

The settlement was the result of a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of North Carolina, the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, the Navy’s Acquisition Integrity Office, the Naval Facilities Engineering Command (NAVFAC) and the Small Business Administration’s Office of Inspector General and Office of General Counsel.     

 
The cases are captioned United States ex rel. Howard v. Harper Construction Co., et al., Case No. 7:12-CV-215-D (E.D.N.C.) and United States ex rel. Howard v. RQ Construction LLC, et al., Case No. 7:13-CV-48-D (E.D.N.C.).  The claims resolved by the settlement are allegations only; there has been no determination of liability. 

The United States filed a civil lawsuit today in Pittsburgh federal court to permanently bar Larry E. Snow, of Seward, Pa., from preparing federal tax returns for others, the Department of Justice and Internal Revenue Service (IRS) announced today.

In February 2012, Snow pleaded guilty to one count of aiding and assisting in the preparation of false and fraudulent individual income tax returns and was later sentenced to six months of home detention and three years of probation.  The civil complaint filed with the U.S. District Court for the Western District of Pennsylvania today alleges that Snow repeatedly prepared returns with false deductions for medical expenses, personal property taxes, charitable contributions and unreimbursed employee expenses.  He allegedly maintained a list he referred to as “IRS Gimmies,” which were items he instructed his employees to report on each return prepared in his accounting practice, regardless of whether the client was entitled to them.  

The IRS estimates that Snow’s fraudulent return preparation for one year alone cost the U.S. Treasury over $1.3 million in lost tax revenue.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013.  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department website.   An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page .  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

United States v. Larry E. Snow
Complaint for Permanent Injunction and Other Relief

The office manager of a Detroit-area home health agency was sentenced today to serve 46 months in prison for her role in a $5.8 million Medicare fraud scheme.

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

Nabila Mahbub, 28, was sentenced by U.S. District Judge Denise Page Hood in the Eastern District of Michigan. In addition to her prison term, Mahbub was sentenced to serve two years of supervised release and was ordered to pay more than $3 million in restitution, jointly and severally with her co-defendants.

A jury convicted Mahbub of one count of health care fraud conspiracy in April 2013. According to evidence presented at trial, the defendant and her co-conspirators caused the submission of false and fraudulent claims to Medicare through All American Home Care Inc., a home health care company located in Oak Park, Mich., that purported to provide skilled nursing and physical therapy services to Medicare beneficiaries in the greater Detroit area.

The evidence at trial showed that Mahbub and her co-conspirators used patient recruiters, who paid Medicare beneficiaries to sign blank documents for physical therapy services that were never provided and/or medically unnecessary. The owners of All American paid physicians to sign referrals and other therapy documents necessary to bill Medicare. Physical therapists and physical therapist assistants then created fake medical records using blank, pre-signed forms obtained by the patient recruiters to make it appear as if physical therapy services were actually rendered, when, in fact, they were not.

According to evidence presented at trial, Mahbub doctored and directed the doctoring of fake patient files to facilitate the commencement and billing of home health services purportedly provided by physical therapists and physical therapist assistants working for All American. Mahbub also directed the physical therapists and physical therapist assistants who created fake therapy visit notes using blank, pre-signed forms, to make it appear that physical therapy services billed to Medicare were actually provided.

All American was paid more than $5.8 million from Medicare between September 2008 and November 2009.

The investigation was led by the FBI and HHS-OIG and was brought by the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Deputy Chief Gejaa T. Gobena and Trial Attorney Matthew C. Thuesen of the Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

The Justice Department announced today that it has entered into a statewide settlement agreement that will resolve violations of the Americans with Disabilities Act (ADA) for approximately 3,250 Rhode Islanders with intellectual and developmental disabilities (I/DD). The landmark ten year agreement is the nation’s first statewide settlement to address the rights of people with disabilities to receive state funded employment and daytime services in the broader community, rather than in segregated sheltered workshops and facility-based day programs.  Approximately 450,000 people with I/DD across the country spend their days in segregated sheltered workshops or in segregated day programs. The agreement significantly advances the department's work to enforce the Supreme Court's decision in Olmstead v. L.C, which requires persons with I/DD be served in the most integrated setting appropriate .

As a result of the settlement, 2,000 Rhode Islanders with I/DD who are currently being served by segregated programs will have opportunities to work in real jobs at competitive wages. Additionally, over the next ten years, 1,250 students with I/DD will receive services to help transition into the workforce.

“Today’s agreement will make Rhode Island a national leader in the movement to bring people with disabilities out of segregated work settings and into typical jobs in the community at competitive pay,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “As Rhode Island implements the agreement over the next ten years, it will make a dramatic difference in the lives of people with disabilities, businesses and communities across the state. We congratulate Governor Chafee and state officials for signing this agreement, as we believe that Rhode Island will be a model for the nation with respect to integrated employment for people with disabilities.”

“The filing of today’s consent decree is a critically important event in Rhode Island history,” said U.S. Attorney Peter F. Neronha for the District of Rhode Island.  “It ushers in a new day of opportunity – opportunity for Rhode Island residents with intellectual or developmental disabilities to live, work and spend their recreational time alongside their fellow Rhode Islanders.  It is an opportunity for this State to move forward; to recognize, finally, that we are better, stronger, when all of us – all of us –are interwoven in the fabric that is Rhode Island.”

Under the agreement, Rhode Island has agreed to provide:

·       Supported employment placements that are individual, typical jobs in the community, that pay at least minimum wage, and that offer employment for the maximum number of hours consistent with the person’s abilities and preferences, amounting to an average of at least 20 hours per week across the target population;

·       Supports for integrated non-work activities for times when people are not at work including mainstream educational, leisure or volunteer activities that use the same community centers, libraries, recreational, sports and educational facilities that are available to everyone;

·       Transition services for students with I/DD, to start at age 14, and to include internships, job site visits and mentoring, enabling students to leave school prepared for jobs in the community at competitive wages;

·       Significant funding sustained over a ten year period that redirects funds currently used to support services in segregated settings to those that incentivize services in integrated settings.  

The ten year agreement will allow the state to ensure that the services necessary to support individuals with I/DD in competitive, integrated jobs will not disappear with a change in administration or legislative leadership. As a result of this commitment, the business community has already stepped up to partner with the state. The U.S. Business Leadership Network (USBLN), a network of Fortune 500 companies, and Walgreens will co-host a regional business summit in Rhode Island in June 2014 to explore how to improve those partnerships.

The agreement is the result of an ADA investigation that began in January 2013 into Rhode Island’s day activity service system for people with I/DD. The department, the state, and the City of Providence entered into an interim settlement agreement in June 2013. The interim settlement agreement focused on a single provider, which was one of the largest facility-based employment service providers in the state’s system, and a school-based sheltered workshop at a Providence, R.I., high school, which was a point of origin for many people entering the provider’s workshop. 

The department continued its investigation of the statewide system, and in January 2014 issued findings determining that the statewide system over-relied on segregated services, to the exclusion of integrated alternatives, in violation of the ADA. The department found workers with I/DD in settings where they had little or no contact with persons without disabilities, and where they earned an average wage of $2.21 per hour. The investigation found that workers typically remain in such settings for many years, and sometimes decades. The department also found that students in Rhode Island schools were often not presented with meaningful choices to participate in integrated alternatives, such as integrated transition work placements and work-based learning experiences, which put students at serious risk of unnecessary postsecondary placement in segregated sheltered workshops and facility-based day programs.

Since June 2013, the state and city have provided supported employment services to people with I/DD transitioning from the original two facilities covered by the interim settlement agreement. Many of these individuals have now accessed jobs in typical work settings where they can interact with non-disabled coworkers and customers, and enjoy the same employment benefits as their non-disabled peers.  Individuals have secured jobs at both locally owned and national companies. Because of the interim settlement agreement, Pedro , an individual who transitioned from the in-school sheltered workshop to the adult workshop, where he earned just 48 cents an hour, is now making minimum wage working at a restaurant. Peter , another former sheltered workshop employee who was earning approximately $1.50 per hour, now has a job earning more than minimum wage working for the state as a custodian at a hospital.  Louis has gone from earning sub-minimum wages performing rote tasks at the sheltered workshop to a full-time position at a state hospital, where he uses his strong computer skills and passion for mathematics to generate Excel reports, record time sheets, and complete other office tasks. For more information on these individuals and others, please visit the Department’s Faces of Olmstead website .

Please visit www.ada.gov/olmstead to learn more about the Division’s ADA Olmstead enforcement efforts, and www.justice.gov/crt to learn more about the laws enforced by the Justice Department’s Civil Rights Division

The Department of Justice’s Civil Rights Division, the U.S. Attorney’s Office for the District of Arkansas and the FBI announced today that Daniel Sutterfield, 35, Chief of the Bull Shoals Police Department, was arrested yesterday on charges related to his use of excessive force in the arrest of a Bull Shoals resident and a related false report.  The complaint and complaint affidavit were unsealed today after Sutterfield’s initial appearance in court this morning before Magistrate Judge James R. Marshewski at the U.S. District Court in Harrison, Ark.

In the two-count complaint, Sutterfield was charged with one count of deprivation of rights and one count of falsifying a report.  The complaint charges that on July 9, 2013, Sutterfield used excessive force in the arrest of a Bull Shoals resident and then directed an officer to write a false and misleading report regarding the incident in order to cover up and justify the use of excessive force.  

If convicted, Sutterfield faces a statutory maximum punishment of 10 years in prison for the civil rights charge involving excessive force and a statutory maximum punishment of 20 years in prison for the falsification charge.  If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record (if any), the defedant’s role in the offense and the characteristics of the violations.  The sentence will not exceed the statutory maximum and in most cases will be less than the maximum.  

This case is being investigated by the FBI.  It is being prosecuted by Trial Attorney Cindy Chung from the Civil Rights Division and Assistant U.S. Attorney Kyra Jenner from the U.S. Attorney’s Office for the Western District of Arkansas.   

A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge.  The charges set forth in a complaint are merely accusations and the defendant is presumed innocent until proven guilty.

U.S. District Judge James K. Bredar sentenced Tyson Hinckle, formerly an officer at Roxbury Correctional Institution (RCI) in Hagerstown, Md., to serve 30 months in prison for conspiring with other correctional officers to assault Kenneth Davis, an inmate.  Hinckle and RCI officers from three different shifts assaulted Davis in March 2008, in retaliation for a prior incident in which Davis struck an officer. 

Hinckle pleaded guilty on Jan. 9, 2014, to conspiring to violate Davis’ civil rights.  According to court documents filed in connection with his guilty plea, Hinckle acknowledged that, after he and other day shift officers conspired to assault Davis, they beat the inmate in order to punish him.  Hinckle also admitted that this assault on March 9, 2008, was consistent with practices at RCI, where officers from three consecutive shifts would beat an inmate who had previously assaulted an officer.  Finally, Hinckle 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 inmate Davis suffered on March 8-9, 2008.  Six former officers – Lanny Harris, Philip Mayo, Robert Harvey, Keith Morris, Dustin Norris and Ryan Lohr –have 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.