District Not Recorded

A former mayor of South Pittsburg, Tenn., and an associate were sentenced today in Chattanooga, Tenn., for managing an illegal gambling business, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Special Agent in Charge Kenneth L. Moore of the FBI’s Knoxville Division.

Former South Pittsburg Mayor James Michael Killian, 56, was sentenced by U.S. District Judge Curtis L. Collier in the Eastern District of Tennessee to serve six months in prison, followed by 12 months of home confinement. In addition to his prison term, Killian was sentenced to serve two years of supervised release and ordered to pay a fine of $30,000. His associate in the gambling operation, Robert Barry Cole, 53, of South Pittsburg, was sentenced to serve three months in prison, followed by six months of home confinement. He will serve two years of supervised release and was ordered to pay a $3,000 fine.

Killian was mayor of South Pittsburg from 2005 until 2012. During that time, he conducted a gambling operation that involved video gambling machines located at a convenience store he owned in South Pittsburg. Killian also managed an illegal lottery, in which bettors placed illegal bets on legal state lotteries. In addition, Killian ran an illegal sports betting ring in partnership with Cole. Cole received sports bets, collected wagers and paid successful bettors their winnings, and Killian and Cole split the proceeds of the operation.

This case was investigated by the FBI and prosecuted by Trial Attorney Mark Angehr of the Criminal Division’s Public Integrity Section.

A federal grand jury in Fort Myers, Fla., indicted former Desoto County Sheriff’s Office deputies Steven Rizza and Jonathan Mause today for charges related to the violation of the civil rights of an inmate who was assaulted by Rizza at the Desoto County Jail and the ensuing obstruction of the investigation into that offense.

The six-count indictment charges Rizza with one count of violating the civil rights of another, and charges both Rizza and Mause with one count of falsifying records in a federal investigation, one count of obstruction of justice and one count of perjury to a grand jury.  Additionally, the indictment charges Mause with one count of making a false statement to a federal investigator.

The indictment alleges that on May 25, 2013, Rizza assaulted an inmate at the Desoto County Jail.  Further, according to the indictment, on May 26 and 27, Rizza and Mause falsified an incident about the assault by changing the incident report to conceal Rizza’s conduct.  The indictment also alleges that Rizza subsequently made false statements about the May 25 incident to a Desoto County Sheriff’s Office investigator and to a federal grand jury.  According to the indictment, Mause made false statements about the May 25 incident to a federal grand jury and a federal investigator.

If convicted, Rizza could face a statutory maximum sentence of 10 years on the civil rights violation count.  Both Rizza and Mause could each face a statutory maximum of 20 years for the obstruction of justice and falsification of records counts and a maximum of five years for the perjury count.  Further, Mause could face a maximum of five years for the count of making a false statement to a federal investigator. 

The Federal Bureau of Investigation and the Florida Department of Law Enforcement are investigating this case with the assistance of the Desoto County Sheriff’s Office.  Chief Assistant U.S. Attorney Jesus M. Casas of the Middle District of Florida and Trial Attorney Douglas Kern of the Civil Rights Division are prosecuting this case. 

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

Two individuals charged with running a telemarketing operation that defrauded Spanish-speaking consumers were sentenced today in Miami federal district court, the Department of Justice and U.S. Postal Inspection Service (USPIS) announced.  Daniel Carrasco, 54, was sentenced to serve 121 months in federal prison, and Federico Martin Gioja, 45, was sentenced to serve 108 months in federal prison, for their operation of telemarketing companies in Argentina whose representatives consistently lied to consumers about products they would receive and threatened consumers with consequences of failure to pay for their shipments.  In addition to their sentences of imprisonment, Carrasco and Gioja were ordered to forfeit a variety of assets, including approximately 20 pieces of real property, an automobile, motorcycles, a boat, a jet ski and firearms.

 
“The Department of Justice is committed to protecting all consumers from fraud, regardless of the language they speak,” said Assistant Attorney General for the Civil Division Stuart F. Delery.  “We will be particularly vigilant towards schemes that target specific populations, and we will track down fraudulent actors whether they commit their offenses from the United States or abroad, and whether they commit them in English or another language.”

 
Carrasco’s and Gioja’s telemarketers promoted products such as vitamins, lotions and English-language training products.  They also promised buyers would receive valuable gifts such as expensive watches and perfumes, gift cards and medical assistance and insurance.  However, the companies frequently did not deliver products ordered by consumers.  Since the companies did not have many of the products they promised to send to consumers, they sent other products instead.  Then, after consumers refused delivery of the companies’ shipments, the Argentinian phone room telemarketers called and falsely threatened consumers with arrest, deportation or fines on their gas and electric bills.

“Fraud is unacceptable,” said U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer.  “Fraud by threat and intimidation is particularly troublesome because it targets the perceived, but oftentimes real, vulnerabilities of those preyed upon.  In this case, the defendants targeted Spanish-speaking consumers and falsely threatened them with arrest, deportation or fines when the consumers refused delivery for products they had not ordered.  Such tactics are intolerable.  My office is committed and stands united with the department’s Civil Division, Consumer Protection Branch to stem such fraud.”

As part of their guilty pleas, Carrasco and Gioja admitted they routinely changed the names of the companies under which they did business to evade consumer complaints, regulators and law enforcement.  A variety of state agencies contacted the businesses regarding their illicit practices.  Those working with Carrasco and Gioja referred to these companies tainted by complaints as “burnt.”  Rather than changing the “burnt” companies’ practices, Carrasco and Gioja incorporated new companies and started the same illegal practices again.

Also in pleading guilty, Carrasco and Gioja admitted their telemarketers falsely represented to consumers that they were affiliated with Spanish-language television networks.  This fraud first came to light when the Spanish language network Univision informed the USPIS they believed a company was involved in a fraud scheme in which it misrepresented its affiliation with the network.  Subsequently, USPIS investigated the case, submitted the affidavit in support of the criminal complaint and arrested the defendants.

“Sadly, these types of crimes create a distrust in people and leave victims feeling ashamed for falling for a scam,” said Inspector In Charge Ronald Verrochio for the U.S. Postal Inspection Service, Miami Division.  “The U.S. Postal Inspection Service remains committed to pursuing crimes that are furthered via the U.S. mail and building trust with consumers.  Postal Inspectors will investigate and bring the criminals to justice.”

Carrasco and Gioja were originally charged by criminal complaint and arrested on June 26, 2013.  Both defendants were later indicted on July 25, 2013, and pleaded guilty on September 24, 2013.  Carrasco and Gioja, and a third individual, Romino Tasso, also were named in a civil suit filed by the Justice Department.  In the civil case, the Justice Department requested and obtained from the court a preliminary injunction barring further lies to consumers and freezing the assets of Carrasco, Gioja, Tasso and companies under their control.

Assistant Attorney General Delery commended the Postal Inspection Service for their investigative efforts and thanked the U.S. Attorney’s Office for the Southern District of Florida for their contributions to the civil case.  The criminal case was prosecuted by Assistant Director Richard Goldberg with the Department of Justice’s Civil Division, Consumer Protection Branch and Assistant U.S. Attorney Timothy Abraham of the Southern District of Florida.

CareFusion Corp. has agreed to pay the government $40.1 million to settle allegations that it violated the False Claims Act by paying kickbacks and promoting its products for uses that were not approved by the Food and Drug Administration, the Justice Department announced today.  CareFusion, a California-based medical technology company, develops, manufactures and sells pharmaceutical products, including products sold under the trade name ChloraPrep.

“When companies pay kickbacks to doctors, especially doctors involved in setting standards for the health care industry, they undermine the integrity of the health care system,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Corrupting the standard-setting process through kickbacks can affect the health care treatment choices that doctors and hospitals may make for patients.”   

The settlement resolves allegations that, under agreements entered into in 2008 by CareFusion’s predecessor, CareFusion paid $11.6 million in kickbacks to Dr. Charles Denham while Denham served as the co-chair of the Safe Practices Committee at the National Quality Forum, a non-profit organization that reviews, endorses and recommends standardized health care performance measures and practices.  The government contends that the purpose of those payments was to induce Denham to recommend, promote and arrange for the purchase of ChloraPrep by health care providers.  ChloraPrep has been approved by the Food and Drug Administration for the preparation of a patient’s skin prior to surgery or injection. 

This settlement also resolves allegations that, during the period between September 2009 and August 2011, CareFusion knowingly promoted the sale of ChloraPrep for uses that were not approved by the Food and Drug Administration, some of which were not medically accepted indications, and made unsubstantiated representations about the appropriate uses of ChloraPrep.

“Health care fraud drives up the cost of health care and jeopardizes the strength of our health care system,” said U.S. Attorney for the District of Kansas Barry Grissom.  “This case demonstrates that our fight against health care fraud is helping to protect all Americans, including the elderly, the disabled and the most vulnerable among us.”

The settlement resolves a lawsuit filed by Dr. Cynthia Kirk, a former vice president of regulatory affairs for the Infection Prevention Business Unit of CareFusion, 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.  The whistleblower’s, or relator’s, share in this case is $3.26 million. 

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 Health and Human Services Secretary 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 $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with CareFusion was the result of a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Kansas, the U.S. Department of Health and Human Services Office of Inspector General and the Food and Drug Administration Office of the Chief Counsel. 

The lawsuit is captioned United States ex rel. Kirk v. CareFusion et al., No. 10-2492 (D. Kan.)  The claims resolved by the settlement are allegations only; there has been no determination of liability.

Alcoa World Alumina LLC, a majority-owned and controlled global alumina sales company of Alcoa Inc., has agreed to plead guilty later today and pay $223 million in criminal fines and forfeiture to resolve charges that it paid millions of dollars in bribes through an international middleman in London to officials of the Kingdom of Bahrain, in violation of the Foreign Corrupt Practices Act (FCPA).

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney David J. Hickton of the Western District of Pennsylvania, Chief Richard Weber of IRS—Criminal Investigation (IRS-CI), and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

“Alcoa World Alumina today admits to its involvement in a corrupt international underworld in which a middleman, secretly held offshore bank accounts, and shell companies were used to funnel bribes to government officials in order to secure business,” said Acting Assistant Attorney General Raman.  “The law does not permit companies to avoid responsibility for foreign corruption by outsourcing bribery to their agents, and, as today’s prosecution demonstrates, neither will the Department of Justice.”

“Today’s case shows that multinational corporations cannot get away with using middlemen to structure sham business arrangements that funnel kickbacks to government officials,” said U.S. Attorney Hickton.

Alcoa World Alumina has agreed to plead guilty in the Western District of Pennsylvania to one count of violating the anti-bribery provisions of the FCPA in connection with a 2004 corrupt transaction, to pay a criminal fine of $209 million, and to administratively forfeit $14 million. As part of the plea agreement, Alcoa Inc. (Alcoa) has agreed to maintain and implement an enhanced global anti-corruption compliance program.

In a parallel action, Alcoa settled with the U.S. Securities and Exchange Commission (SEC) and will pay an additional $161 million in disgorgement, bringing the total amount of U.S. criminal and regulatory penalties to be paid by Alcoa and Alcoa World Alumina to $384 million.

“This case is the result of unraveling complex financial transactions used by Alcoa World Alumina LLC’s agent to facilitate kickbacks to foreign government officials,” said Chief Richard Weber of IRS-CI. “IRS-CI will not be deterred by the use of sophisticated international financial transactions as we continue our ongoing efforts to pursue corporations and executives who use hidden offshore assets and shell companies to circumvent the law.”

“Corrupt kickback payments to foreign government officials to obtain business diminish public confidence in global commerce,” said Assistant Director in Charge Parlave.  “There is no place for bribery in any business model or corporate culture. Today’s plea demonstrates the FBI and our law enforcement partners are committed to curbing corruption and will pursue all those who try to advance their businesses through bribery.”

Today’s court filings allege that Alcoa of Australia, another Alcoa-controlled entity, originally secured a long-term alumina supply agreement with Aluminium Bahrain B.S.C. (Alba), an aluminium smelter controlled by the government of Bahrain. At the request of certain members of Bahrain’s Royal Family who controlled the tender process, Alcoa of Australia inserted a London-based middleman with close ties to certain Royal Family members as a sham sales agent and agreed to pay him a corrupt commission intended to conceal bribe payments, according to court papers. Over time, Alcoa of Australia expanded the relationship with the middleman, identified as Consultant A in today’s court filings, to begin invoicing increasingly larger volumes of alumina sales through his shell companies, which permitted Consultant A to make larger bribe payments to certain government officials, according to today’s filings.

As admitted in the charging documents, in 2004, Alcoa World Alumina corruptly secured a long-term alumina supply agreement with Alba by agreeing to purportedly sell over 1.5 million metric tons of alumina to Alba through offshore shell companies owned by Consultant A. The sham distributorship permitted Consultant A to mark up the price of alumina by approximately $188 million from 2005 to 2009, the duration of the corrupt supply agreement. Court filings allege that Consultant A used the mark-up to pay tens of millions in corrupt kickbacks to Bahraini government officials, including senior members of Bahrain’s Royal Family. To conceal the illicit payments, Consultant A and the government officials used various offshore bank accounts, including accounts held under aliases, at several major financial institutions around the world, including in Guernsey, Luxembourg, Liechtenstein and Switzerland.

In addition to the monetary penalty, Alcoa and Alcoa World Alumina agreed to cooperate with the department in its continuing investigation of individuals and institutions involved in these matters.

The plea agreement and related court filings acknowledge Alcoa’s current financial condition as a factor relevant to the size of the criminal fine, as well as Alcoa’s and Alcoa World Alumina’s extensive cooperation with the department, including conducting an extensive internal investigation, making proffers to the government, voluntarily making current and former employees available for interviews, and providing relevant documents to the department. Court filings also acknowledge subsequent anti-corruption remedial efforts undertaken by Alcoa.

The department acknowledges and expresses its appreciation for the cooperation and assistance of the Office of the Attorney General of Switzerland, the Guernsey Financial Intelligence Service and Guernsey Police, the Australian Federal Police, the U.K.’s Serious Fraud Office, and other law enforcement authorities in the department’s investigation of this matter. The department also acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s Division of Enforcement.

The investigation is being conducted by Special Agents and analysts with the IRS-Criminal Investigation’s Washington Field Office and the FBI’s Washington Field Office. The case is being prosecuted by Deputy Chief Adam G. Safwat and Trial Attorneys Andrew Gentin, Allan J. Medina and Andrew H. Warren of the Criminal Division’s Fraud Section, with the assistance of the U.S. Attorney’s Office for the Western District of Pennsylvania. The Criminal Division’s Office of International Affairs also provided significant assistance during this investigation.

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

WASHINGTON –El Departamento de Justicia de EE.UU. (DOJ), en colaboración con el Departamento de Educación de EE.UU. (ED), dio a conocer hoy un paquete de orientación sobre la disciplina escolar que ayudará a los estados, distritos y escuelas a desarrollar prácticas y estrategias para mejorar el ambiente escolar, y asegurar que sus políticas y prácticas cumplan con la ley federal. A pesar de que los incidentes de violencia escolar han disminuido en general, muchas escuelas todavía luchan por crear un ambiente seguro y positivo. Las escuelas pueden mejorar la seguridad asegurándose de que los ambientes sean acogedores y que las acciones disciplinarias sean justas, no discriminatorias, y eficaces.

Cada año, demasiados estudiantes faltan a clase debido a suspensiones y expulsiones, incluso por infracciones menores de las reglas de la escuela. Los estudiantes de color y con discapacidad se ven afectados de manera desproporcionada por la disciplina escolar. El paquete de orientación proporciona recursos para la creación de ambientes escolares seguros y positivos, que son indispensables para elevar el éxito académico de los estudiantes y cerrar las brechas de rendimiento.

"Cuando un estudiante comete una infracción rutinaria de la disciplina, éste debe terminar en la dirección escolar y no en el cuartel de la policía", dijo Eric Holder, fiscal general de EE.UU. "Esta guía de orientación promoverá prácticas disciplinarias justas y eficaces para que las escuelas sean seguras, inclusivas y brinden apoyo a todos los estudiantes. Para mantener a los jóvenes de nuestro país seguros y en el camino correcto, tenemos que garantizar la protección federal de los derechos civiles, ofrecer alternativas a la disciplina excluyente, y proporcionar información útil a los funcionarios escolares".

El paquete de recursos tiene cuatro componentes:

• La carta de orientación a los Estimados Colegas, preparada en colaboración con el Departamento de Educación, brinda a las escuelas orientación sobre los derechos civiles y la disciplina escolar. También indica cómo las escuelas pueden cumplir con las obligaciones legales de la ley federal en la aplicación de la disciplina estudiantil sin discriminar a los estudiantes por motivos de raza, color u origen nacional;
   
• El documento sobre los Principios Rectores, preparado por ED, se basa en investigaciones recientes y las mejores prácticas para describir tres principios claves y los pasos de acción relacionados que pueden ayudar a los estados y las localidades a mejorar el ambiente y la disciplina escolar;
   
• El Directorio de Recursos Federales de Ambiente Escolar y Disciplinarios, preparado por ED, indica los extensos recursos de asistencia técnica y otros recursos relacionados con el ambiente y la disciplina escolar que están a disposición de las escuelas y distritos; y
   
• El Compendio de Leyes y Reglamentos Sobre la Disciplina Escolar, preparado por ED, un catálogo en línea sobre las leyes y reglamentos relacionados con la disciplina escolar en cada uno de los 50 estados, el Distrito de Columbia y Puerto Rico, donde se pueden comparar las leyes de todos los estados y jurisdicciones.

"La enseñanza y el aprendizaje eficaz no pueden realizarse a menos que los estudiantes se sientan seguros en la escuela", dijo Arne Duncan, secretario de Educación de EE.UU. "Las normas disciplinarias positivas pueden ayudar a crear un ambiente de aprendizaje más seguro sin tener que depender en gran medida en las suspensiones y expulsiones. Las escuelas también deben comprender sus obligaciones con los derechos civiles y evitar prácticas disciplinarias injustas. Tenemos que mantener a los estudiantes en la clase donde puedan aprender. Estos recursos son un paso en la dirección correcta".

El paquete de orientación es un recurso que surge de la Iniciativa de Apoyo a la Disciplina Escolar (SSDI), un proyecto conjunto de los departamentos de Justicia y Educación. La SSDI fue puesta en práctica en el 2011, y advierte sobre el vínculo que se crea entre la escuela y la prisión cuando las prácticas disciplinarias conducen a los estudiantes a abandonar la escuela para entrar en el sistema penal. Como alternativa, la iniciativa promueve el apoyo de prácticas disciplinarias que fomentan entornos de aprendizaje seguros, incluyentes y positivos, para así mantener a los estudiantes en la escuela. El Departamento de Justicia aplica el Título IV de la Ley de Derechos Civiles de 1964, que prohíbe la discriminación por motivos de raza u origen nacional en las escuelas públicas, y en el Título VI de la Ley de Derechos Civiles de 1964, que prohíbe a las escuelas, las fuerzas del orden público, y los beneficiarios de asistencia financiera federal, discriminar por motivos de raza, color u origen nacional.

El paquete de orientación es también el resultado de la iniciativa Ya es Hora del presidente Obama para reducir la violencia cometida con armas de fuego. La propuesta pide al Departamento de Educación que reúna y difunda las mejores prácticas disciplinarias para ayudar a los distritos escolares a desarrollar y poner en práctica políticas disciplinarias equitativas. Para continuar los esfuerzos de DOJ/ED relacionados con la SSDI y también cumplir el compromiso de "Ya es Hora", el paquete de orientación ha sido desarrollado con el aporte adicional de los defensores de los derechos civiles, las principales organizaciones de educación y socios filantrópicos.

Para ver los documentos de recurso y orientación, visite www.ed.gov/school-discipline. Las agencias estatales de educación y las escuelas también pueden solicitar una copia del paquete llamando al servicio ED Pubs (Education Publications) al (877) 433-7827.

The United States has settled a housing discrimination lawsuit in Euless, Texas, concerning discrimination against persons of Middle Eastern and South Asian descent, the Justice Department announced today.  Under the agreement, defendants in United States v. Stonebridge at Bear Creek LLP et al will pay a total of $107,000 in civil penalties and $210,000 in a damages fund to compensate victims of the defendants’ discrimination identified during the term of the agreement.

The agreement was filed today in federal court in Dallas and takes the form of a joint proposed order whose terms may be enforced by the court.  The department’s complaint alleged that, for several years, the owners, employees and management company of Stonebridge at Bear Creek Apartments violated the Fair Housing Act by denying housing opportunities to persons of Middle Eastern and South Asian descent.  Among other unlawful actions, Stonebridge’s property manager ordered leasing agents to misrepresent apartment availability based on the accent and perceived race or national origin of potential tenants, and to segregate those approved tenants of Middle Eastern or South Asian descent into two buildings in order to isolate any smells allegedly associated with ethnic cuisine that the manager disliked.

“The Fair Housing Act ensures that people searching for a home are protected from discrimination, no matter what part of the world their family comes from” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “The Justice Department will continue to vigorously protect the rights of all individuals to obtain housing free from discrimination.”

Under the agreement, which must be approved by the federal court in Texas, the defendants must adopt a nondiscrimination policy and enact or undertake numerous other corrective measures, including training, record keeping and monitoring.  In addition, the property manager who ordered the discrimination will no longer be employed by the owners of Stonebridge at Bear Creek Apartments or its management company.

Fighting illegal housing discrimination is a top priority of the department’s Civil Rights Division.  The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.

More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt/ .  Persons who believe they have experienced or witnessed unlawful housing discrimination may call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the department at fairhousing@usdoj.gov , or contact HUD at 1-800-669-9777.  More information about the Fair Housing Act can also be found at www.justice.gov/crt/housing/ or www.hud.gov/fairhousing .

The Justice Department announced today that it has closed its investigation of State Correctional Institution – Pittsburgh after the Pennsylvania Department of Corrections (PDOC) significantly improved security policies and practices at the prison and throughout the Pennsylvania prison system.  The reforms are intended to protect prisoners, especially gay, transgender and gender nonconforming prisoners, from harm and discrimination.  The PDOC has also assured the United States that by no later than Dec. 1, 2014, it will have the prison audited and deemed fully compliant with the National Standards to Prevent, Detect, and Respond to Prison Rape promulgated under the Prison Rape Elimination Act of 2003 (PREA).

The department opened this investigation in December 2011, after local authorities initiated criminal prosecutions against seven of the prison’s officers for assaulting and sexually abusing vulnerable prisoners.  In May 2013, the department notified Pennsylvania officials that while significant measures had already been undertaken to address the misconduct that had occurred, more needed to be done.  Since then, Pennsylvania has worked cooperatively to address the department’s concerns and has made substantial progress toward improving the safety of its prisoners.  These improvements include statewide reforms to oversight and accountability measures, abuse and misconduct investigations, prisoner screening procedures and the grievance system.  The Pittsburgh prison has also improved the way it monitors its inmates and secures its physical plant.       

“We commend the Pennsylvania Department of Corrections for its commitment to improving security policies and practices in Pittsburgh and its other facilities,” said Acting Assistant Attorney General Jocelyn Samuels for the department’s Civil Rights Division.  “These improvements, especially those concerning PREA, provide a clear path forward to ensuring the safety of prisoners in their care.”

“I am very pleased with the outcome of this investigation,” added U.S. Attorney David J. Hickton for the Western District of Pennsylvania.  “Correctional facilities have a constitutional obligation to adequately protect prisoners from harm.  The positive result of this investigation demonstrates our commitment to ensuring that the constitutional rights of all citizens are protected.”  

The department initiated this investigation under the Civil Rights of Institutionalized Persons Act, which prohibits a pattern or practice of deprivation of constitutional rights of individuals confined to state or local government-run correctional facilities.  This investigation was conducted by Special Litigation Counsel Avner Shapiro, Trial Attorneys Kyle Smiddie and Aaron Zisser, Analyst Gary Graca of the Special Litigation Section of the Civil Rights Division and Amie Murphy with the U.S. Attorney’s Office for the Western District of Pennsylvania.  Secretary John Wetzel and his staff at the PDOC have fully cooperated with this investigation.  Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.           

A Florida man was sentenced to serve 15 months in prison, and his wife was sentenced to 24 months of probation, for their roles in a bribery and fraud scheme involving federal procurement contracts, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney David B. Barlow of the District of Utah.

On Feb. 26, 2013, Sylvester Zugrav, 70, of Sarasota, Fla., pleaded guilty to conspiracy to commit bribery and procurement fraud, and his wife, Maria Zugrav, 67, also of Sarasota, pleaded guilty to misprision of a felony related to her efforts to conceal the conspiracy.

The Zugravs were charged in an October 2011 indictment along with Jose Mendez, 51, of Farr West, Utah. Mendez, a procurement program manager for the U.S. Air Force Foreign Materials Acquisition Support Office (FMASO) at Hill Air Force Base, in Ogden, Utah, was charged in the indictment with conspiracy, bribery and procurement fraud, and has since pleaded guilty to all charges and agreed to forfeit more than $180,000 he received as part of the bribery scheme. Sentencing for Mendez is scheduled for Jan. 29, 2014.

According to court documents, the Zugravs owned Atlas International Trading Company, a business that contracted to provide foreign military materials to the U.S. government through FMASO.

In his plea agreement, Sylvester Zugrav admitted that, from 2008 through August 2011, he gave Mendez more than $180,000 in bribe payments and offered Mendez more than $1 million in additional bribe payments contingent upon Atlas’s receipt of future contracts with FMASO. In exchange for Sylvester Zugrav’s bribe payments and offers, Mendez ensured that Atlas and Sylvester Zugrav received favorable treatment in connection with procurement contracts by, among other things, assisting Atlas in obtaining and maintaining procurement contracts; assisting Atlas in receiving payments on such contracts; and providing Atlas with contract bid or proposal information or source selection information before the award of procurement contracts. In her plea agreement, Maria Zugrav admitted that she was aware of Sylvester Zugrav’s bribe payments to Mendez and assisted with concealing the crime.

According to court records, Sylvester Zugrav provided bribe payments to Mendez in three ways: cash payments via Federal Express to Mendez’s residential address; in-person payments of cash and other things of value; and electronic wire transfers to a bank account in Mexico opened by and in the name of Mendez’s cousin. Between November 2009 and August 2011, Sylvester Zugrav sent nine FedEx packages to Mendez’s home address. Each package contained $5,000 in cash, except the last package, which contained $3,000 and was seized by law enforcement. Maria Zugrav assisted her husband and Mendez’s bribe scheme by limiting cash withdrawals from Atlas’s bank account to not more than $5,000 to avoid scrutiny by banking officials and law enforcement.

According to the plea documents, on multiple occasions when Sylvester Zugrav and Mendez traveled to the same location, Sylvester Zugrav would give Mendez cash payments and other things of value. From 2008 through August 2011, Sylvester Zugrav gave Mendez seven in-person cash payments ranging from $500 to $10,000 and purchased for him[?] a laptop computer and software package worth over $2,900.

During the course of the corrupt scheme, Mendez opened a foreign bank account so that Sylvester Zugrav could pay Mendez larger bribe payments. Mendez asked his cousin in Mexico to open an account there. After the account was opened by Mendez’s cousin, Maria Zugrav made wire transfers to the bank account located in the name of Mendez’s cousin to avoid detection of the larger bribe payments by law enforcement. From 2008 through August 2011, Maria Zugrav sent to the Mexico account 10 wire transfers ranging from $350 to $26,700.

Court records also describe additional steps taken to conceal the bribery scheme, including creating and using covert e-mail accounts, using encrypted documents, adopting false names and using code words. For instance, to avoid detection of their e-mail communications, Sylvester Zugrav and Mendez established e-mail accounts to be used only to communicate requests and offers for bribe payments. Sylvester Zugrav and Mendez also created password-protected documents for e-mail communications and used code words and false names. Within the encrypted documents, Mendez adopted the moniker “Chuco” and Sylvester Zugrav used the codename “Jugo.” They referred to cash as “literature.”

The case was investigated by the FBI and the Air Force Office of Special Investigations. The case is being prosecuted by Trial Attorneys Marquest J. Meeks and Edward P. Sullivan of the Criminal Division’s Public Integrity Section, Assistant U.S. Attorney Carlos A. Esqueda of the District of Utah, and Trial Attorney Deborah Curtis of the National Security Division’s Counterespionage Section. 

The Department of Justice (DOJ), in collaboration with the Department of Education (ED), today released a school discipline guidance package that will assist states, districts and schools in developing practices and strategies to enhance school climate, and ensure those policies and practices comply with federal law.  Even though incidents of school violence have decreased overall, many schools are still struggling to create positive, safe environments.  Schools can improve safety by making sure that climates are welcoming, and that responses to misbehavior are fair, non-discriminatory, and effective.  

Each year, significant numbers of students miss class due to suspensions and expulsions—even for minor infractions of school rules—and students of color and with disabilities are disproportionately impacted.  The guidance package provides resources for creating safe and positive school climates, which are essential for boosting student academic success and closing achievement gaps.

"A routine school disciplinary infraction should land a student in the principal's office, not in a police precinct," said Attorney General Eric Holder.  "This guidance will promote fair and effective disciplinary practices that will make schools safe, supportive, and inclusive for all students.  By ensuring federal civil rights protections, offering alternatives to exclusionary discipline, and providing useful information to school resource officers, we can keep America's young people safe and on the right path."

The resource package consists of four components:

·          The Dear Colleague guidance letter on civil rights and discipline, prepared by DOJ and ED, describes how schools can meet their legal obligations under federal law to administer student discipline without discriminating against students on the basis of race, color or national origin; 

·          The Guiding Principles document, prepared by ED, draws from emerging research and best practices to describe three key principles and related action steps that can help guide state and local efforts to improve school climate and school discipline; 

·          The Directory of Federal School Climate and Discipline Resources, prepared by ED, indexes the extensive federal technical assistance and other resources related to school discipline and climate available to schools and districts; and

·          The Compendium of School Discipline Laws and Regulations,prepared by ED, is an online catalogue of the laws and regulations related to school discipline in each of the 50 states, the District of Columbia and Puerto Rico, and compares laws across states and jurisdictions. 

“Effective teaching and learning cannot take place unless students feel safe at school,” said U.S. Secretary of Education Arne Duncan.  “Positive discipline policies can help create safer learning environments without relying heavily on suspensions and expulsions.  Schools also must understand their civil rights obligations and avoid unfair disciplinary practices.  We need to keep students in class where they can learn.  These resources are a step in the right direction.”

The guidance package is a resource resulting from a collaborative project—the Supportive School Discipline Initiative (SSDI)—between DOJ and ED.  The SSDI, launched in 2011, addresses the school-to-prison pipeline and the disciplinary policies and practices that can push students out of school and into the justice system.  The initiative aims to support instead school discipline practices that foster safe, inclusive and positive learning environments while keeping students in school. The Department of Justice enforces Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race or national origin in public schools, and Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color or national origin by schools, law enforcement agencies and other recipients of federal financial assistance.

The guidance package also results from President Obama’s Now is the Time proposal to reduce gun violence.  It called on ED to collect and disseminate best practices on school discipline policies and to help school districts develop and equitably implement their policies.  To both continue ED and DOJ efforts in connection with SSDI and fulfill the administration’s commitment to “Now is the Time,” the guidance package was developed with additional input from civil rights advocates, major education organizations and philanthropic partners.

To view the resource documents, visit www.ed.gov/school-discipline .  State Education Agencies, Local Education Agencies and schools may also request a copy of the package by calling (877) 433-7827.

Christopher W. Loncarich, 55, of Mack, Colo., and Nicholaus J. Rodgers, 30, of Medford, Ore., were charged yesterday in the District of Colorado with conspiracy to violate the Lacey Act, interstate felony transportation and sale of unlawfully taken wildlife, and felony creation of false records concerning wildlife that was sold in interstate commerce. The 17-count indictment was based on the pair’s practice between 2007 and 2010 of illegally capturing and maiming mountain lions and bobcats as part of a scheme to make hunting the cats easier for their clients.

The indictment alleges Christopher Loncarich is a big game outfitter and hunting guide who operates mainly in western Colorado on the border with Utah. Mr. Loncarich outfits and guides hunts for mountain lions and bobcats in the Bookcliffs Mountains, which span the Colorado-Utah border. Mountain lion and bobcat hunting are labor-intensive pursuits. The hunting seasons for the cats stretch from November to March when snow is likely to be on the ground. Guides commonly release highly-trained dogs on the track of the cats after the guides discover a track in the snow. The process is for the hunting dogs to follow the cat’s scent in the snow, then tree, corner or bay the pursued cat. At that point a hunter arrives and kills the treed cat.

The allegations include that Mr. Loncarich and his assistant guides devised a scheme whereby they would trap the cats in cages prior to hunts and release the cats when the client was nearby. Mr. Loncarich, Mr. Rodgers and other guides would communicate by radio to ensure that they took their clients to the location where the cats had been released. In order to keep the cats in the areas of potential hunts Mr. Loncarich, Mr. Rodgers and other guides would sometimes shoot the cats in the paws or legs or attach leghold traps to them. Many of the clients Mr. Loncarich and Mr. Rodgers guided did not have proper tags or licenses to take mountain lions or bobcats in Utah. Despite knowing that the clients were hunting in Utah without proper licenses or tags, the pair continued to guide the hunts. Ultimately, Mr. Loncarich, Mr. Rodgers and other guides brought the animals taken in Utah back to Colorado. Mr. Loncarich often took the client to “check in” the illegally taken mountain lions with the Colorado Division of Wildlife (now “Colorado Parks and Wildlife”) where Mr. Loncarich would provide false records to obtain seals for the hides. Many of the cats were then transported back to the clients’ home states. To date, four assistant guides have pleaded guilty to offenses arising from the conspiracy.

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

The case was investigated by the U.S. Fish and Wildlife Service Office of Law Enforcement, Colorado Parks and Wildlife, and Utah Division of Wildlife Resources, and is being prosecuted by the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), and Sarah Thomas-Nededog, Vice-President, West Care Pacific Islands, were invited to speak at the Micronesian Chief Executives Summit (MCES) held on December 4-6, 2013, in Saipan, NMI.  The MCES is composed of the Chief Executives of the Territory of Guam, the Commonwealth of the NMI, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.  The Governors of each of the Federated States of Micronesia -- Chuuk, Yap, Pohnpei, and Kosrae, are also members. The primary purpose of the MCES is to coordinate and implement regional strategies to assist its member jurisdictions.
 
 U.S. Attorney Limtiaco and Ms. Thomas-Nededog spoke on the topic of “Preventing Human Trafficking in the Pacific Region,” and shared information on the Pacific Regional Response to Combat Human Trafficking initiative, which is a collaborative effort among the U.S. Attorney’s Office for the Districts of Guam and the NMI, the National District Attorneys Association, the Department of State, the Department of the Interior, Guam Human Trafficking Task Force, NMI Human Trafficking Intervention Coalition, and other community partners. U.S. Attorney Limtiaco and Ms. Thomas-Nededog also discussed the intersection and relationship between human trafficking, sexual assault, child abuse and domestic and family violence, and prevention and enforcement efforts in the Pacific region.

The Pacific Regional Response to Combat Human Trafficking initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders.  The response calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities.  Providing fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics, to law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders, in our Pacific region island communities, is critical to effective prevention and enforcement efforts in the region.

Photos of the summit are attached.

U.S. Attorney Alicia Limtiaco

Sarah Thomas-Nededog, Vice President, West Care Pacific Islands

A Florida-based physician, Dr. Ravi Sharma, has agreed to pay $400,000 to resolve allegations that he and his clinics violated the False Claims Act by knowingly billing Medicare for vein injections and physician office visits performed by unqualified personnel, the Justice Department announced today.

“Vein injections and other invasive procedures should be performed by appropriately qualified personnel,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will not tolerate those who put patients’ health at risk for their personal gain and convenience.”

The government alleged that, between 2009 and 2010, Sharma owned and operated a clinic in the Tampa area called Premier Vein Centers. Beginning in 2009, Sharma allegedly sent text messages to his office manager instructing her to perform varicose vein injections on patients when he was not in the office. The government further alleged that, when Sharma was in the office, he performed unnecessary vein injections and unnecessary ultrasound imaging procedures associated with those vein injections.

Sharma also owned and operated, between 2009 and 2010, a weight loss clinic in the Tampa area called Life’s New Image. Allegedly, unqualified personnel met with patients of the clinic, but Sharma billed those visits as physician office visits using his own Medicare provider number. Sharma closed Premier Vein Centers and Life’s New Image in 2010.

“We are pleased to announce this very favorable resolution of our claims against this provider,” said Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III. “Again, it demonstrates our commitment to civil health care fraud enforcement in our district.”

The allegations covered by the settlement were originally raised in a lawsuit filed by Patti Lovell, the former office manager for Sharma, 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. Lovell will receive $72,000.

 
As part of the settlement, Sharma entered into a three-year Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The agreement requires Sharma to attend training courses provided by the Centers for Medicare and Medicaid Services and provides for an independent external review of his federal health care program coding and billing procedures.

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 Health and Human Services Secretary 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 $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

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

The lawsuit is captioned U.S. ex rel. Lovell v. Ravi Sharma, M.D. and Premier Vein Centers, 12-CV-133 (M.D. Fla.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Jay G. Conrad, of Lakeland, Tenn., pleaded guilty today in the District of Maine to conspiring to illegally import and traffic narwhal tusks, conspiring to launder money, and illegally trafficking narwhal tusks, announced Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division . A plea agreement was also unsealed today in which Eddie T. Dunn, of Eads, Tenn., pleaded guilty in the District of Alaska to conspiring to illegally traffic, and trafficking, narwhal tusks.

According to the plea agreements, beginning in approximately 2003, Dunn and Conrad partnered to buy more than 100 narwhal tusks from a Canadian resident who each knew had illegally imported the tusks from Canada into Maine. After receiving the tusks in Tennessee, Dunn and Conrad marketed and sold the tusks using a combination of internet sales via the “Ebay” auction website and direct sales to known buyers and collectors of ivory. Buyers were located throughout the United States, including in Alaska and Washington. Throughout the conspiracy, Dunn and Conrad made payments to the Canadian supplier for the narwhal tusks by sending the payment to a mailing address in Bangor, Maine, or directly to the supplier in Canada. The payments allowed the Canadian supplier to purchase and re-supply Dunn and Conrad with more narwhal tusks that they could then re-sell. Dunn sold approximately $1.1 million worth of narwhal tusks and Conrad sold between $400,000 and $1 million worth of narwhal tusks as members of the conspiracy.

“In this conspiracy, Dunn and Conrad flouted U.S. law and international agreements that protect marine mammals like the narwhal from commercial exploitation,” said Acting Assistant Attorney General Dreher. “If left unchecked, this illegal trade has the potential to irreparably harm the species. The Justice Department will continue to investigate and prosecute wildlife traffickers in order to protect these species for future generations to enjoy.”

“The cooperation between Service and NOAA investigators and between the United States and Canada that led to these prosecutions reflects the type of partnerships needed to protect narwhals and other species worldwide from wildlife trafficking,” said William C. Woody, Assistant Director for Law Enforcement for the U.S. Fish and Wildlife Service.

“NOAA OLE takes the unlawful importation of protected marine mammals very seriously,” said NOAA-Office of Law Enforcement Special Agent in Charge Logan Gregory. “NOAA OLE will continue to investigate those who unlawfully import marine mammal products and profit from marine protected species such as the narwhal.”

“This investigation uncovered and dismantled a wildlife trafficking network that spanned from New Brunswick to Tennessee and reached as far as Alaska,” said Karen Loeffler, U.S. Attorney for the District of Alaska. “The results reached demonstrate the close cooperation between the United States and Canada and their law enforcement officers whose duty it is to investigate, stop and deterthose who illegally target diminishing wildlife resources and do so for commercial gain.”

A narwhal is a medium-sized whale with an extremely long tusk that projects from its upper left jaw. Narwhals are marine mammals protected by the Marine Mammal Protection Act and are listed on Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). It is illegal to import parts of marine mammals into the United States without the requisite permits/certifications, and without declaring the merchandise at the time of importation to U.S. Customs and the U.S. Fish and Wildlife Service. Narwhal tusks are commonly collected for display purposes and can fetch large sums of money.

Dunn is scheduled to be sentenced by U.S. District Judge Ralph R. Beistline in the District of Alaska on March 20, 2014. The maximum penalty Dunn faces for conspiring to illegally traffic, and trafficking, narwhal tusks is five years of incarceration and a fine of $250,000. The maximum penalty Conrad faces for conspiring to illegally import and illegally traffic narwhal tusks, conspiring to commit money laundering crimes and illegally trafficking narwhal tusks is twenty years of incarceration and a fine of $250,000.  The trial of Co-defendant Andrew J. Zarauskas is set to begin in Bangor, Maine, on February 4, 2014. Co-defendant Gregory R. Logan is pending extradition from Canada to the District of Maine.

These cases are part of Operation Nanook, a multi-agency effort to detect, deter and prosecute those engaged in the unlawful trafficking of narwhal tusks. The cases were investigated by agents from National Oceanic and Atmospheric Administration - Office of Law Enforcement and the U.S. Fish and Wildlife Service - Office of Law Enforcement, with extensive support and collaboration from Environment Canada, Wildlife Enforcement. The cases are being prosecuted by Trial Attorney Todd S. Mikolop of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division and Assistant U.S. Attorney Steven E. Skrocki of the District of Alaska.

 
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ArthroCare Corporation, a medical device manufacturer based in Austin, Texas, and that trades on the NASDAQ stock exchange, has agreed to pay a $30 million monetary penalty to resolve charges that senior executives at the company engaged in a securities fraud scheme that resulted in more than $400 million in shareholder losses, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Robert Pitman of the Western District of Texas.

John Raffle and David Applegate, both former senior vice presidents of ArthroCare, previously pleaded guilty to conspiracy to commit securities and wire fraud in connection with the fraud scheme. ArthroCare’s former chief executive officer, Michael Baker, and chief financial officer, Michael Gluk, are scheduled to stand trial on related charges on May 5, 2014. Defendants are presumed innocent unless and until proven guilty at trial.

As part of the agreed-upon resolution, the department today filed a criminal information in the Western District of Texas charging ArthroCare with one count of conspiracy to commit securities fraud and wire fraud. In addition to the monetary penalty, ArthroCare also agreed to cooperate with the department in its continuing investigation and prosecution of individuals responsible for the scheme and to continue to implement an enhanced compliance program and internal controls designed to prevent and detect violations of the federal securities laws and federal laws relating to the company’s relationships and transactions with health care providers. ArthroCare had previously entered into a multi-million dollar settlement agreement with shareholder victims.

In the deferred prosecution agreement, ArthroCare admitted that senior executives of the company inflated ArthroCare’s revenue by tens of millions of dollars; concealed the nature and financial significance of ArthroCare’s relationship with its largest distributor, DiscoCare Inc., and other distributors; and used a series of sham transactions to manipulate ArthroCare’s revenue and earnings as reported to investors. ArthroCare admitted that its executives determined the type and amount of product to be shipped to distributors, notably DiscoCare, based on ArthroCare’s need to meet sales forecasts, rather than the distributors’ actual orders.

ArthroCare further admitted that these executives and others then caused ArthroCare to “park” millions of dollars worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter so the company could report these shipments as sales in its quarterly and annual filings and so the company would appear to have met or exceeded internal and external earnings forecasts.

According to the Information, between December 2005 and December 2008, ArthroCare’s shareholders held more than 25 million shares of ArthroCare stock. On July 21, 2008, after ArthroCare announced publicly that it would be restating its previously reported financial results from the third quarter 2006 through the first quarter 2008 to reflect the results of an internal investigation, the price of ArthroCare shares dropped from $40.03 to $23.21 per share. The drop in ArthroCare’s share price caused an immediate loss in shareholder value of more than $400 million.

This case was investigated by the FBI’s Austin Field Office. The case is being prosecuted by Deputy Chief Benjamin D. Singer and Trial Attorneys Henry P. Van Dyck and William Chang of the Criminal Division’s Fraud Section. Significant assistance was provided by the SEC’s Fort Worth, Texas, Office.

Several patient recruiters, including a medical clinic owner, pleaded guilty today in connection with a health care fraud scheme involving Flores Home Health Care Inc., a defunct home health care company.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office made the announcement.

At a hearing held before U.S. District Judge Ursula Ungaro of the Southern District of Florida, Lerida Labrada, 59, of Miami, pleaded guilty to conspiracy to commit health care fraud, which carries a maximum penalty of 10 years in prison, and Mayra Flores, 49, and German Martinez, 36, both of Miami, pleaded guilty to conspiracy to defraud the United States and receive health care kickbacks, which carries a maximum penalty of five years in prison. Sentencing has been scheduled for March 14, 2014.

According to court documents, the defendants worked as patient recruiters for the owners and operators of Flores Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. Labrada also owned and operated a Miami medical clinic that provided fraudulent prescriptions to patient recruiters and to the owners and operators of Flores Home Health.

Flores Home Health was operated for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.

The defendants would recruit patients for Flores Home Health and would solicit and receive kickbacks and bribes from the owners and operators of Flores Home Health in return for allowing the agency to bill the Medicare program on behalf of the recruited Medicare patients. These Medicare beneficiaries were billed for home health care and therapy services that were not medically necessary and/or not provided.

From approximately October 2009 through approximately June 2012, Flores Home Health was paid approximately $8 million by Medicare for fraudulent claims for home health services.

The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division's Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

The owner and operator of a Miami medical clinic pleaded guilty today in connection with multiple health care fraud schemes involving the defunct clinic Merfi Corp.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office made the announcement.

Isabel Medina, 49, of Miami, pleaded guilty before U.S. District Judge Ursula Ungaro of the Southern District of Florida to conspiracy to commit health care fraud, which carries a maximum penalty of 10 years in prison. Sentencing has been scheduled for March 14, 2014.

According to court documents, Medina was an owner and operator of Merfi, a Miami medical clinic which employed physicians, physician assistants and other medical professionals who were authorized by law to dispense prescriptions for home health care services. Through Merfi, Medina and her co-conspirators provided fraudulent home health and therapy prescriptions and other medical documentation to the owners and operators of Flores Home Health Care Inc. and other home health care agencies, as well as to patient recruiters, in return for kickbacks and bribes.

Flores Home Health and these other home health care agencies purported to provide home health and therapy services to Medicare beneficiaries, but were in fact operated for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.

Medina has acknowledged that her involvement in fraudulent schemes at multiple home health care companies, including Flores Home Health, resulted in losses to the Medicare Program exceeding $20 million.

The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division's Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Defendant Daniel Cruz Stone, age 34, and Daniel Manglona Cruz, age 57, were sentenced today in the District Court of Guam.  Cruz is Stone’s uncle.  Each pled to an Information charging Conspiracy to Distribute more than 50 grams of methamphetamine. 

Cruz was sentenced to 87 months in prison and five years supervised release.  Stone received 70 months in prison, five years supervised release and a fine in the amount of $12,500.  He was also ordered to participate in a substance abuse program.  Both defendants are awaiting a designation from the Bureau of Prisons.

On August 9, 2011, a postal inspector seized a package addressed to Cruz containing 212 grams of ice. Cruz was detained and admitted the package was his.  He then agreed to call his co-defendant/nephew (STONE) who sold ice for him.  His nephew showed up at the Agana Shopping Mall and was arrested.

RBS Securities Japan Limited, a wholly owned subsidiary of The Royal Bank of Scotland plc (RBS) that engages in investment banking operations with its principal place of business in Tokyo, Japan, was sentenced today for its role in manipulating the Japanese Yen London Interbank Offered Rate (LIBOR), a leading benchmark used in financial products and transactions around the world.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

RBS Securities Japan was sentenced by U.S. District Judge Michael P. Shea in the District of Connecticut. RBS Securities Japan pleaded guilty on April 12, 2013, to one count of wire fraud for its role in manipulating Yen LIBOR benchmark interest rates. RBS Securities Japan signed a plea agreement with the government in which it admitted its criminal conduct and agreed to pay a $50 million fine, which the court accepted in imposing sentence. In addition, RBS plc, the Edinburgh, Scotland-based parent company of RBS Securities Japan, entered into a deferred prosecution agreement (DPA) with the government requiring RBS plc to pay an additional $100 million penalty, to admit and accept responsibility for its misconduct as set forth in an extensive statement of facts and to continue cooperating with the Justice Department in its ongoing investigation. The DPA reflects RBS plc’s cooperation in disclosing LIBOR misconduct within the financial institution and recognizes the significant remedial measures undertaken by new management to enhance internal controls.

Together with approximately $462 million in regulatory penalties and disgorgement – $325 million as a result of a Commodity Futures Trading Commission (CFTC) action and approximately $137 million as a result of a U.K. Financial Conduct Authority (FCA) action – the Justice Department’s criminal penalties bring the total amount of the resolution with RBS and RBS Securities Japan to approximately $612 million.

“Today’s sentencing of RBS is an important reminder of the significant consequences facing banks that deliberately manipulate financial benchmark rates, and it represents one of the numerous enforcement actions taken by the Justice Department in our ongoing LIBOR investigation” said Acting Assistant Attorney General Raman. “As a result of the department’s investigation, we have charged five individuals and secured admissions of criminal wrongdoing by four major financial institutions.  Our enforcement actions have had a lasting impact on the global banking system, and we intend to continue to vigorously investigate and prosecute the manipulation of this cornerstone benchmark rate.”

“By colluding to manipulate the Yen LIBOR benchmark interest rate, RBS Securities Japan reaped higher profits for itself at the expense of unknowing counterparties, and in the process undermined the integrity of a major benchmark rate used in financial transactions throughout the world,” said Deputy Assistant Attorney General Snyder.  “Today’s sentence, in conjunction with the department’s agreement with parent company RBS, demonstrates the Antitrust Division’s commitment to prosecuting these types of far-reaching and sophisticated conspiracies.”

“The manipulation of LIBOR impacts financial products the world over, and erodes the integrity of the financial markets,” said Assistant Director in Charge Parlave. “Without a level playing field in our financial marketplace, banks and investors do not have a threshold to which they can measure their hard work. I commend the Special Agents, forensic accountants and analysts, as well as the prosecutors, for the significant time and resources they committed to investigating this case.”

According to court documents, LIBOR is an average interest rate, calculated based upon submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks. LIBOR serves as the primary benchmark for short-term interest rates globally, and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were valued at approximately $450 trillion.

LIBOR is published by the British Bankers’ Association (BBA), a trade association based in London. At the time relevant to the conduct in the criminal information, LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year. The LIBOR for a given currency at a specific maturity is the result of a calculation based upon submissions from a panel of banks for that currency (the Contributor Panel) selected by the BBA.

According to the plea agreement, at various times from at least 2006 through 2010, certain RBS Securities Japan Yen derivatives traders engaged in efforts to move LIBOR in a direction favorable to their trading positions, defrauding RBS counterparties who were unaware of the manipulation affecting financial products referencing Yen LIBOR. The scheme included efforts to manipulate more than one hundred Yen LIBOR submissions in a manner favorable to RBS Securities Japan’s trading positions. Certain RBS Securities Japan Yen derivatives traders, including a manager, engaged in this conduct in order to benefit their trading positions and thereby increase their profits and decrease their losses.

The prosecution of RBS Securities Japan is being handled by Deputy Chief Patrick Stokes and Trial Attorney Gary Winters of the Criminal Division’s Fraud Section, and New York Office Assistant Chief Elizabeth Prewitt and Trial Attorneys Eric Schleef and Richard Powers of the Antitrust Division. Deputy Chiefs Daniel Braun and William Stellmach and Trial Attorney Alex Berlin of the Criminal Division’s Fraud Section, Trial Attorneys Daniel Tracer and Kristina Srica of the Antitrust Division, Jeremy Verlinda of the Antitrust Division’s Economic Analysis Group, Assistant U.S. Attorneys Eric Glover and Liam Brennan of the U.S. Attorney’s Office for the District of Connecticut, and the Criminal Division’s Office of International Affairs have also provided valuable assistance in this matter. The investigation is being conducted by special agents, forensic accountants and intelligence analysts of the FBI’s Washington Field Office.

The investigation leading to these cases has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad. The Justice Department acknowledges and expresses its deep appreciation for this assistance. In particular, the CFTC’s Division of Enforcement referred this matter to the department and, along with the FCA, has played a major role in the investigation. Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance. In particular, the Securities and Exchange Commission has played a significant role in the LIBOR investigation, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.

Two former chief executive officers of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey – have been charged for their alleged participation in a scheme to pay bribes to foreign government officials in violation of the Foreign Corrupt Practices Act (FCPA), to defraud PetroTiger, and to launder proceeds of those crimes. In addition, PetroTiger’s former general counsel pleaded guilty to bribery and fraud charges in connection with the same scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Aaron T. Ford of the FBI’s Newark Division made the announcement after the charges and guilty plea were unsealed today.

“We have said – repeatedly and emphatically – that foreign corruption, whether committed by companies or by the individuals entrusted to run those companies, will not be tolerated. And, our track record in vigorously enforcing the FCPA has shown that message to be undeniably true,” said Acting Assistant Attorney General Raman. “The charges unsealed today against two former CEOs of PetroTiger and the guilty plea announced today of the former General Counsel reaffirm our clear message that we will prosecute corruption and fraud wherever we find it. Bribery distorts what should be a level playing field and deprives corporations and governments of funds that should instead be used to strengthen those institutions. Today’s announcement should be a reminder to CEOs and other executives who seek to corrupt the system at the expense of honest businesses: we are not going away.”

“Bribery of public officials, whether at home or abroad, corrupts business opportunity and undermines trust in government,” said U.S. Attorney Fishman. “The under-the-table deals alleged in today’s charges are not an acceptable way of doing business.”

“The FBI is committed to pursuing those who disrupt the level playing field to which companies in the U.S. and around the world are entitled,” said FBI Special Agent in Charge Ford. “We will continue to investigate these matters by working with law enforcement agencies, both foreign and domestic, to ensure that both corporations and executives who bribe foreign officials for lucrative contracts are punished.”

According to the charges, former co-CEOs of PetroTiger Joseph Sigelman, 42, formerly of Miami and the Philippines, and Knut Hammarskjold, 42, of Greenville, S.C.; former general counsel Gregory Weisman, 42, of Moorestown, N.J., and others allegedly paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million.

Hammarskjold was arrested Nov. 20, 2013, at Newark Liberty International Airport. Sigelman was arrested on Jan. 3, 2014, in the Philippines and appeared this afternoon (ChST) in Guam before U.S. Magistrate Judge Joaquin V.E. Manibusan III. Sigelman will have an initial appearance in New Jersey federal court on a date to be determined. Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey on Nov. 8, 2013, with conspiracy to commit wire fraud, conspiracy to violate the FCPA, conspiracy to launder money and substantive violations of the FCPA.

Weisman pleaded guilty on Nov. 8, 2013, to a criminal information charging one count of conspiracy to violate the FCPA and to commit wire fraud. The charges and guilty plea were also unsealed today.

The charges allege the defendants made three separate payments from PetroTiger’s bank account in the United States to the official’s bank account in Colombia to secure approval from Colombia’s state-owned and state-controlled oil company for a lucrative oil services contract in the country. According to the charges, to conceal the bribes, the defendants first attempted to make the payments to a bank account in the name of the foreign official’s wife, for purported consulting services she did not perform. The charges allege that Sigelman and Hammarskjold provided Weisman invoices including her bank account information. The defendants made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed.

In addition, court documents allege that the defendants attempted to secure kickback payments at the expense of PetroTiger’s board members. According to the criminal charges, the defendants were negotiating an acquisition of another company on behalf of PetroTiger, including on behalf of several members of PetroTiger’s board of directors who were helping to fund the acquisition. In exchange for negotiating a higher purchase price for the acquisition, two of the owners of the target company agreed to kick back to the defendants a portion of the increased purchase price. According to the charges, to conceal the kickback payments, the defendants had the payments deposited into Sigelman’s bank account in the Philippines, created a “side letter” to falsely justify the payments, and used the code name “Manila Split” to refer to the payments amongst themselves.

The conspiracy to commit wire fraud count carries a maximum penalty of 20 years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The conspiracy to commit violations of the FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction.

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

The department has worked closely with and has received significant assistance from its law enforcement counterparts in the Republic of Colombia and greatly appreciates their assistance in this matter. The department also thanks the Republic of the Philippines, including the Bureau of Immigration, for its assistance in this matter. Significant assistance was also provided by the Criminal Division’s Office of International Affairs.

The case is being investigated by the FBI’s Newark Division. The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Aaron Mendelsohn of the District of New Jersey.

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

NOTE: The court documents are attached.

Related Materials:

Hammarskjold Complaint
Sigleman Complaint
Weisman Information

A Dallas-based group of companies and their owner must either stop importing vehicles or follow a comprehensive compliance plan to settle Clean Air Act (CAA) violations stemming from the alleged illegal import of over 24,167 highway motorcycles and recreational vehicles into the United States without proper documentation, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced. The four parties are also required to pay a $120,000 civil penalty.

“Importers of foreign made vehicles and engines must comply with the same Clean Air Act requirements that apply to those selling domestic products,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “We will continue to vigorously enforce the law to ensure that imported vehicles and engines comply with U.S. laws so that American consumers get environmentally sound products and violators do not gain an unfair economic advantage.”

“Vehicles are one of the largest sources of pollution that significantly affect public health,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Holding importers accountable for meeting U.S. emissions standards is critical to protecting the air we breathe, and to protecting companies that play by the rules.”

Savoia, BMX Imports and BMX Trading, and their owner, Terry Zimmer, allegedly imported the vehicles from several foreign manufacturers into the United States through the Port of Long Beach, Calif. The vehicles were then sold through the Internet and from a retail location in Dallas, Texas.

Today’s settlement requires that the companies either certify that they are no longer engaging in CAA-regulated activities or follow a comprehensive plan over the next five years that would include regular vehicle inspections, emissions testing, and other measures to ensure compliance at various stages of purchasing, importing, and selling vehicles. In addition, the companies are required to export or destroy 115 of their current vehicles that have catalytic converters or carburetors that do not adhere to the certificate of conformity that they submitted to EPA. The purpose of the certificate of conformity, required by the CAA, is to demonstrate that vehicles or engines meet applicable federal emission standards.

EPA discovered the alleged violations through inspections at Long Beach and other U.S. ports of entry, and through information provided by the company. EPA’s investigation showed that approximately 11,000 of the imported vehicles were not covered by an EPA certificate of conformity, which means that EPA is unable to confirm that the emissions from these vehicles meet federal standards. Other violations included approximately 23,000 vehicles sold without the required emissions warranty and approximately 500 vehicles that did not have proper emission control labels.

The CAA requires that all vehicles have certification, warranty and labeling prior to being imported or sold in the United States to demonstrate that they meet federal emission standards. Engines operating without proper emissions controls can emit excess carbon monoxide, hydrocarbons and nitrogen oxides which can cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog.

The consent decree, lodged today in the United States District Court for the Northern District of Texas, is subject to a 30-day public comment period and court approval. The consent decree is available for review at www.justice.gov/enrd/Consent_Decrees.html information on the settlement:

More information on the settlement: www2.epa.gov/enforcement/savoia-inc-bmx-imports-lp-bmx-trading-llc-and-terry-zimmer-clean-air-act-settlement

More information on EPA’s Clean Air Act mobile source enforcement programs: www2.epa.gov/enforcement/air-enforcement#mobile

The Department of Justice today announced it is proposing a regulation that will clarify who, due to mental health reasons, is prohibited under federal law from receiving, possessing, shipping or transporting firearms.  In addition to providing general guidance on the federal law, this clarification will help states determine what information may be appropriately shared with the federal background check system for firearms transfers – the National Instant Criminal Background Check System (NICS) – in order to keep guns out of the hands of individuals who may be a danger to themselves or others.
 
The revised definition clarifies that the statutory terms “adjudicated as a mental defective” and “committed to a mental institution” include persons who are found incompetent to stand trial or not guilty by reason of mental disease or defect; persons lacking mental responsibility or deemed insane; and persons found guilty but mentally ill, regardless of whether these determinations are made by a state, local, federal or military court.  The proposed regulation also clarifies that the statutory term includes a person committed to involuntary inpatient or outpatient treatment.
 
“We are taking an important, commonsense step to clarify the federal firearms regulations, which will strengthen our ability to keep dangerous weapons out of the wrong hands,” said Attorney General Eric Holder.  “This step will provide clear guidance on who is prohibited from possessing firearms under federal law for reasons related to mental health, enabling America’s brave law enforcement and public safety officials to better protect the American people and ensure the safety of our homes and communities.  And it is emblematic of the Justice Department’s broader commitment to use every tool and resource at its disposal to combat gun violence and prevent future tragedies while respecting the Constitutional rights to which all Americans are entitled.”

The NICS background check system is a critical tool in keeping guns out of the hands of those who cannot legally have one.  To date, NICS has prevented more than 2 million guns from falling into the wrong hands. In order for background checks to continue to be effective, the system must have access to relevant, correct and complete information.
 
Clarifying the existing Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) regulation is just one of many common-sense steps the department has taken to keep guns out of the wrong hands. The department is working diligently to reduce gun violence and is committed to using every tool at its disposal, including implementing effective prevention, enforcement and re-entry strategies.  In addition, the department is working with other federal departments and agencies to ensure relevant information is shared with the NICS and has also provided monetary support to states to improve their abilities to share this information.
 
The NPRM will be available for review beginning at 4:15pm on Friday, Jan. 3, 2014, at: http://www.federalregister.gov.  Comments can be submitted to http://www.regulations.gov. 

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that DAVID TAIMANGLO QUICHOCHO, JR. was sentenced today in the District Court of Guam to 37 months incarceration, and five years of supervised release.  QUICHOCHO, JR’S wife, DOMINICA BATO QUICHOCHO, was also sentenced today to a two-year term of Probation which includes six months of home confinement and community service. 
Defendants QUICHOCHO, JR. and DOMINICA BATO QUICHOCHO both pled guilty in December 2012, to Conspiracy to Distribute Methamphetamine Hydrochloride, in violation of Title 21 U.S.C. Section 841(a)(1).    Defendant QUICHOCHO, JR. ordered over five grams of methamphetamine hydrochloride from a supplier in California.  The supplier concealed small amounts of methamphetamine hydrochloride in letters sent via First Class mail to Guam.   QUICHOCHO, JR. then instructed his spouse, DOMINICA BATO QUICHOCHO, to pick up the letters containing the drug.   Notably, the letters containing approximately 1.88 grams of the drug were detected and intercepted by a United States Postal Inspector. 
U.S. Attorney Limtiaco thanks the United States Postal Inspector and the United States Postal Inspection Service for their efforts in our fight against drug trafficking.

Alicia A.G. Limtiaco, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, along with Sarah Thomas-Nededog, Vice-President, West Care Pacific Islands; Dr. Julie Ulloa-Heath, President, Micronesian Youth Services Network; and Carol Hinkle-Sanchez, Assistant Attorney General, Guam Attorney General’s Office, were invited by the Association of Pacific Island Legislatures (APIL) to speak on the topic of “Preventing Human Trafficking in the Pacific Region.”    According to their website, APIL membership is comprised of legislators from the Pacific region, including American Samoa, the Commonwealth of the Northern Mariana Islands, the Federated States of Micronesia (Chuuk, Kosrae, Pohnpei and Yap), Guam, Hawaii, the Republic of Kiribati, the Republic of the Marshall Islands, the Republic of Nauru, and the Republic of Palau.  The APIL meet to consider matters in areas where regional cooperation, coordination, exchange and assistance may help governments achieve their goals through collection action.

U.S. Attorney Limtiaco and the panel members shared information on the “Pacific Regional Response to Combat Human Trafficking” initiative, which is a collaborative effort among the U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands (NMI), the National District Attorneys Association, the Department of State, the Department of Interior, Guam Human Trafficking Task Force, NMI Human Trafficking Intervention Coalition, and other community partners. The panel also discussed the intersection and relationship between human trafficking, sexual assault, child abuse, and domestic and family violence, and prevention and enforcement efforts in the Pacific region.

The Pacific Regional Response to Combat Human Trafficking initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders.  The response calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities.  Providing fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics, to law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders, in our Pacific region island communities, is critical to effective prevention and enforcement efforts in the region.

Photos of the presenters are attached.

U.S. Attorney Alicia Limtiaco addressing the Association of Pacific Island Legislatures.

Presenters:   United States Attorney Alicia A. G. Limtiaco             Dr. Julie Ulloa-Heath, President, MYSN

  
Carol Hinkle-Sanchez, Assistant Attorney                 Sarah Thomas-Nededog, Vice-President, General, Guam Attorney General’s Office                  West Care Pacific Islands

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was the guest speaker at the 2013 Micronesian Youth Services Network (MYSN) Conference held on April 17-19, 2013, at the Fiesta Resort in Saipan.  This year’s theme was entitled, “Pursue, Cultivate, and Sustain a Balance.”

U.S. Attorney Limtiaco discussed during her presentation on “Bullying, Cyberbullying and On-line Sexual Predators,” the impact of bullying on those being victimized, the emotional, mental and psychological harm including youth suicide, and safety tips for youth and families.  U.S. Attorney Limtiaco also discussed the dangers posed on the internet including on-line solicitation by sex predators, and internet safety tips for youth and families.  U.S. Attorney Limtiaco spoke about Project Safe Childhood, a U.S. Department of Justice initiative, committed to the protection of children against child sexual exploitation and child pornography; and Project Safe Neighborhood, a U.S. Department of Justice initiative, focused on public awareness and prevention efforts against youth violence, gangs, and gun violence.  

MYSN is a non-profit, non-governmental organization that is committed to showcasing practical, culturally competent ideas, strategies, challenges, and best practice efforts aimed at addressing the unique needs of youth and families in Micronesia to continually improve comprehensive youth services in Micronesia.  The MYSN’s mission is to support, collaborate, coordinate, promote and strengthen youth programs and services throughout Micronesia.
Photos taken at the conference, courtesy of Kenny Reklai, are attached.

* * * * * * * *
 

U.S. Attorney Alicia Limtiaco addressing the attendees.

Conference attendees enjoying one of the workshops.

Three Northern California real estate investors have agreed to plead guilty for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Felony charges were filed today in U.S. District Court for the Northern District of California in Oakland against Rudolph Silva of Concord, Calif., Thomas Bishop of Pleasant Hill, Calif., and Leslie Gee of Danville, Calif.  Including Silva, Bishop and Gee, a total of 43 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

According to court documents, Silva, Bishop and Gee conspired with others, for various lengths of time between January 2008 and January 2011, not to bid against one another, and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County, Calif.  Silva, Bishop and Gee were also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Contra Costa County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.  The private auctions often took place at or near the courthouse steps where the public auctions were held.  Additional charges were filed against Gee for his involvement in similar conduct in Alameda County, Calif., from as early as April 2009 until about November 2009.

"Today’s plea agreements are the latest step in the Antitrust Division’s efforts to hold accountable investors for their fraudulent and collusive activities at real estate foreclosure auctions,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The division will continue to prosecute individuals who participated in illegal conspiracies and harmed distressed homeowners and lenders.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda and Contra Costa County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and in some cases, the defaulting homeowner.

“The FBI and our partners have an obligation to investigate and pursue those who disrupt a free and fair marketplace,” said FBI Special Agent in Charge David J. Johnson of the San Francisco Field Office.  “We will continue to educate the public on the criminality of bid rigging at real estate foreclosure auctions.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million.  A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine.  The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.

Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, or call the FBI tip line at 415-553-7400.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**

The Department of Justice today announced that it will require Heraeus Electro-Nite LLC to divest certain assets that it acquired from Midwest Instrument Company Inc. (Minco) to Keystone Sensors LLC in order to resolve the department’s competitive concerns.  The department said that, without the divestiture, Heraeus’ acquisition of Minco’s assets substantially lessens competition in the market for the development, production, sale and service of single-use sensors and instruments used to measure and monitor the temperature and chemical composition of molten steel in the steel manufacturing process. 

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

 
Heraeus acquired Minco in September 2012.  The department learned of the transaction, which was not required to be reported under the premerger notification law, shortly after it was completed.  According to the complaint, prior to the acquisition, Heraeus and Minco competed head-to-head on price, service and innovation in supplying sensors and instruments to steel manufacturers, for whom the reliability and precise performance of these products is of critical importance.

“The proposed settlement will benefit consumers in the single-use sensors and instruments market by facilitating the entry of a new competitor into this market,” said Deputy Assistant Attorney General Renata B. Hesse of the Department of Justice’s Antitrust Division.  “Today’s enforcement action shows that the department is committed to redressing anticompetitive mergers, including consummated mergers for which reporting is not required under the premerger notification law.” 

 
The department required the divestiture of a package of assets to an identified purchaser, Keystone, that had been evaluated and approved by the department.  The department said the proposed settlement will ensure that the assets Keystone requires in order to enter the U.S. market and compete more effectively with Heraeus are readily available to it.  In this way, the divestiture to Keystone will promote competition in the sensors and instruments market, which was reduced when Heraeus acquired Minco.  Keystone was formed in May 2013 for the purpose of entering the U.S. market for sensors and instruments and to offer customers an additional alternative to Heraeus. 

 
The proposed settlement also requires Heraeus to waive noncompete provisions it had imposed on some former employees.  The waiver of these provisions will enable Keystone to hire experienced individuals with expertise in this specialized business.  By making experienced individuals available to be hired immediately, Heraeus’ agreement to waive these noncompete provisions will also enhance competition in the single-use sensors and instruments market by facilitating the entry or expansion of other new competitors into the market.  Heraeus also is required to provide the department with advance notice of any future acquisition in the market for sensors and instruments in the United States that is not subject to the reporting requirements of the premerger notification law.   

 
Heraeus Electro-Nite Co. LLC is a Delaware corporation with its headquarters in Langhorne, Pa. 

 
The acquirer, Keystone Sensors LLC, is a Delaware corporation headquartered in Cranberry Township, Pa.  Its principal place of business will be located in Johnson City, Tenn.

The proposed settlement, along with a competitive impact statement, will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530.  At the conclusion of the 60-day comment period, the court may enter the proposed settlement upon finding that it is in the public interest.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, was the guest speaker on October 12, 2013 at the Inauguration and Swearing-in Ceremony of the “We Are You” (WAY) Officers of John F. Kennedy High School.

U.S. Attorney Limtiaco congratulated the newly admitted officers and acknowledged their families and friends who continue to support them as they pursue their educational, professional and personal aspirations and, as they embark on their journey as WAY officers to represent and serve their fellow students, and collaborate with the administration, faculty and Parent Teacher School Association of John F. Kennedy High School.

U.S. Attorney Limtiaco encouraged the students to realize that “there is a larger value to learn about the world we live in – that it is a world full of different cultures, customs, economies, political and legal systems.  And, most of all, a world of different, unique people all trying to carve out their own independent lives in their own unique societies.  How people interact and relate to each other matters.”

She shared, “Each one of you is embarking on your next journey as a leader and representative of your fellow students – to serve and engage your fellow students in the dialogue of issues that affect and have an impact – on each one of you as students, on your school, on your community, on humanity and on the world.”  She quoted President John F. Kennedy, “Leadership and learning are indispensable to each other.”  “Change is the law of life and those who look only to the past or the present are certain to miss the future.”

U.S. Attorney Limtiaco encouraged the WAY officers to “represent, serve and lead their follow students with integrity, dignity, and respect.  Stay grounded – listen and learn from those you represent – your fellow students; and from each other.  Ask yourselves what you and WAY can do to make a positive impact – to make a positive change – in the lives of your fellow students, our community and the world; that will be your legacy and make a difference for future generations of students at John F. Kennedy High School and our island.”

            Photo of U.S. Attorney Alicia Limtiaco, together with one of the newly admitted officers, Pim Limtiaco is attached.

St. James Healthcare (St. James), a hospital located in Butte, Mont., and its parent company, Sisters of Charity of Leavenworth Health System (Sisters of Charity), a health care organization based in Denver, Colo., have agreed to pay $3.85 million to resolve allegations that they violated the Anti-Kickback Statute, the Stark Law and the False Claims Act by improperly providing financial benefits to physicians and physician groups that made referrals to the hospital, the Justice Department announced today.

The Anti-Kickback Statute prohibits the provision of remuneration with the intent to induce referrals of government health care program business.  The Stark Law restricts financial relationships that hospitals may enter into with physicians who refer patients to them.  Federal law prohibits payment by federal health care programs of medical claims that result from arrangements that violate the Anti-Kickback Statute or the Stark Law.

 
“Improper financial arrangements between hospitals and physicians not only undermine the integrity of the decisions that doctors make, they raise the cost of health care for all of us,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The department has longstanding concerns about such conduct and is committed to working with health care providers that come forward to disclose their misconduct.”

The settlement announced today resolves allegations that St. James and Sisters of Charity provided various improper financial incentives to physicians and physician groups that were involved in a joint venture with St. James to own and operate a medical office building on the St. James campus.  These incentives included a payment to the joint venture that increased the share values for the physicians and physician groups in the joint venture and resulted in below fair market value lease rates for the physicians renting space in the medical office building.  Additional incentives provided by St. James and Sisters of Charity included below fair market value lease rates for the land upon which the medical office building was constructed and other below fair market value arrangements related to shared facilities, use and maintenance.  These issues were disclosed by St. James and Sisters of Charity to the government.

“This matter is of great significance to Montanans because it helps ensure federal health care programs deliver services in a cost-effective and efficient manner,” said U.S. Attorney for the District of Montana Michael W. Cotter.  “We are encouraged that hospitals like St. James Healthcare are taking these issues seriously by reviewing their operations and making disclosures to the government where necessary.”

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 Health and Human Services Secretary Kathleen Sebelius.  The partnership between the two departments has focused on 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 $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

This case was handled by the U.S. Attorney’s Office for the District of Montana, the Department of Justice Civil Division, Commercial Litigation Branch and the Department of Health and Human Services Office of Inspector General.  The claims settled by this agreement are allegations only, and there has been no determination of liability. 

An Eastern California real estate investor pleaded guilty today to conspiring to rig bids and commit mail fraud at public real estate foreclosure auctions in Eastern California, the Department of Justice announced.

 
Anthony B. Joachim of Stockton, Calif., entered his guilty plea in U.S. District Court for the Eastern District of California in Sacramento.  Joachim was originally indicted by a federal grand jury in Sacramento on Dec. 7, 2011, along with three other investors – Andrew B. Katakis, Donald M. Parker and Wiley C. Chandler – and one auctioneer – W. Theodore Longley. All five individuals were charged with conspiring with other unnamed co-conspirators to rig bids and commit mail fraud when purchasing selected properties at public real estate foreclosure auctions in San Joaquin County, Calif.  The indictment was superseded on May 8, 2013, to include an obstruction of justice charge against Katakis.  Chandler pleaded guilty on Feb. 24, 2012, and trial is scheduled to begin against the remaining individuals on Jan. 28, 2014.

 
According to court documents, Joachim conspired with others not to bid against one another and to instead designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Joaquin County.  Joachim was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected San Joaquin County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have otherwise gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.  The private auctions often took place at or near the courthouse steps where the public auctions were held.  According to Joachim’s plea agreement, he participated in the conspiracies between about April 2009 until about October 2009.

 
“Today’s plea is the 11th in the Antitrust Division’s ongoing investigation of bid rigging and fraud involving real estate foreclosure auctions in the Eastern District of California,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The division has uncovered similar schemes across the country and continues to prosecute those who profit by undermining competition at real estate foreclosure auctions.”

 
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Joaquin County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and in some cases, the defaulting homeowner.

 
“My office will continue to fight real estate fraud in all its forms, including bringing to justice those who would subvert public foreclosure auctions for their own personal gain,” said United States Attorney Benjamin B. Wagner of the Eastern District of California.

 
Joachim pleaded guilty to bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine.  Joachim also pleaded guilty to conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine.

           
The guilty plea entered today is the latest in the department’s ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County.  The investigation is being conducted by the Antitrust Division’s San Francisco office, the U.S. Attorney’s Office for the Eastern District of California, the FBI’s Sacramento Division and the San Joaquin County District Attorney’s Office.  Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, contact the U.S. Attorney’s Office for the Eastern District of California at 916-554-2700 or contact the FBI’s Sacramento Division at 916-481-9110.

 
Today’s action was brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, announced that her office conducted training to law enforcement on human trafficking investigations at the “Joint Interagency Task Force West Transnational Crime Workshop” held in the Republic of Palau on July 26, 2013.   U.S. Attorney Limtiaco, Assistant U.S. Attorney (AUSA) Rosetta San Nicolas and AUSA Rami Badawy, also conducted training and presentations at the 2nd Pacific Regional Response to Combat Human Trafficking International Conference held on July 22-26, 2013, in the Republic of Palau.

The “Joint Interagency Task Force West Transnational Crime Workshop” was attended by approximately 30 officers of the Pacific regional community, some of whom are in the photos below.

                                                                 

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to speak at Vicente S.A. Benavente Middle School on October 28, 2013.  She addressed and shared with over 430 eighth grade students the significance of Red Ribbon Week and being healthy and drug free.  U.S. Attorney Limtiaco also talked with the students about preventing and stopping bullying and cyber-bullying, and how to be safe on the Internet.

The first Red Ribbon Celebration was organized in 1986 by a grassroots organization of parents concerned about the destruction caused by alcohol and drug abuse.  The red ribbon was adopted as a symbol of the movement in honor of Enrique “Kiki” Camarena, an agent with the U.S. Drug Enforcement Administration who was kidnapped and killed while investigating drug traffickers.  The Campaign has reached millions of children and has been recognized by the U.S. Congress.  Red Ribbon Week is a chance to be visible and vocal in our desire for a drug-free community.  The Campaign provides communities with a forum to bring together parents, schools and businesses to find new and innovative ways to keep kids drug free.

Attached are photos taken at the school.

Left to Right, U.S Attorney Alicia Limtiaco, Myles Macaraig (student), Victoria Ananich (student), Chona Eco (PFC-Outreach Social Worker), and Kin Fernanez (Asst. Principal).

Students listening to U.S. Attorney Alicia Limtiaco.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to speak on November 6, 2013 at the Federal Bureau of Investigation’s (FBI) Citizens Academy.  This is the 6th FBI Citizens Academy held in Guam.  U.S. Attorney Limtiaco has previously presented at the FBI Citizens Academy on topics related to the Department of Justice and U.S. Attorney’s Office.

U.S. Attorney Limtiaco discussed the mission and priorities of the Department of Justice and U.S. Attorney’s Office, the type of cases handled by the Criminal and Civil Divisions of the U.S. Attorney’s Office, and the various initiatives of the Department and U.S. Attorney’s Office including the “Smart on Crime Initiative” announced by Attorney General Eric Holder in August 2013.

The FBI offers members of the community an up close and personal look at how it operates through their Citizens Academy program.  The program brings the community’s civic, business, and religious leaders together to experience firsthand how the FBI investigates crimes and threats to our national security and learn about the various tools and techniques we employ to carry out our mission.

FBI Citizens Academy class members are nominated by a Bureau employee or a previous academy graduate. To be eligible, you must be at least 21 years old, with no felony convictions, and because of the classified investigative techniques discussed, nominees must also undergo a background check and get an interim security clearance.  The FBI Citizens Academy curriculum mirrors new-agent training. That means class members get plenty of hands-on instruction — from shooting firearms and learning how to fingerprint and handcuff suspects to collecting evidence from a crime scene and operating vehicles under emergency situations.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that Assistant U.S. Attorney (AUSA) Stephen Leon Guerrero was invited to speak at Jose Rios Middle School for Career Day on April 12, 2013.  AUSA Leon Guerrero spoke to two 6th and 7th grade classes with approximately 25 students in each.  He talked to them about the educational process of becoming an attorney and his duties as an Assistant U.S. Attorney.  He also talked about the U.S. Attorney’s role with Red Ribbon Week, as well as the G.R.E.A.T. Program and Cyber-bullying. 
           
The first Red Ribbon Celebration was organized in 1986 by a grassroots organization of parents concerned about the destruction caused by alcohol and drug abuse.  The red ribbon was adopted as a symbol of the movement in honor of Enrique “Kiki” Camarena, an agent with the U.S. Drug Enforcement Administration who was kidnapped and killed while investigating drug traffickers.  The Campaign has reached millions of children and has been recognized by the U.S. Congress.  Red Ribbon Week is a chance to be visible and vocal in our desire for a drug-free community.  The Campaign provides communities with a forum to bring together parents, schools and businesses to find new and innovative ways to keep kids drug free.

The G.R.E.A.T. Program=s primary objective is awareness and prevention of delinquency, youth violence, and gang membership.  The G.R.E.A.T. lessons, aimed at elementary and middle school students, focus on teaching life skills to help students avoid delinquent behavior and violence, and learn to solve problems.    

The U.S. Attorney’s Office (“USAO”) for the Districts of Guam and the Northern Mariana Islands (“NMI”), continues to conduct presentations at various schools on the topics of Bullying and Cyber-bullying.

Attached are photos of AUSA Leon Guerrero addressing the students.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, was presented with and awarded the Patriot Award on October 24, 2013 by the Employer Support of the Guard and Reserve (ESGR).  She was nominated by an employee of the U.S. Attorney’s Office presently serving in the National Air Guard.

U.S. Attorney Limtiaco expressed her appreciation to all Veterans and to all service members for their courage, fortitude and commitment to protecting our freedoms as Americans, and to the ESGR for their continued efforts to raise awareness among employers about the significant role and responsibilities employers have in supporting and protecting the rights of employees in military service.  

According to the ESGR, the Patriot Award reflects the efforts made to support Citizen Warriors through a wide-range of measures including flexible schedules, time off prior to and after deployment, caring for families and granting leaves of absence if needed.  Patriot Awards are awarded to individual supervisors, not to an entire staff or organization as a whole.Supervisors receive a Patriot Award certificate and accompanying lapel pin.

            Please see attached photo of the ESGR’s presentation of the Patriot Award to U.S. Attorney Limtiaco.

 
U.S. Attorney Alicia Limtiaco is seen here receiving the ESGR Award from ESGR
State Chair David Sablan and members of the ESGR, together with First Assistant
Steve Sinnot, second from the right, from the U.S. Attorney’s Office

Abbott Laboratories has agreed to pay the United States $5.475 million to resolve allegations that it violated the False Claims Act by paying kickbacks to induce doctors to implant the company’s carotid, biliary and peripheral vascular products, the Justice Department announced today.  Abbott is a global pharmaceuticals and health care products company based in Abbott Park, Ill.

“Patients have a right to treatment decisions that are based on their own medical needs, not the personal financial interests of their health care providers,” said Assistant Attorney General Stuart F. Delery of the Civil Division of the Department of Justice.  “Kickbacks undermine the ability of health care providers to objectively evaluate and treat their patients, and will continue to be a primary focus of the Department’s health care enforcement efforts.”  

The settlement resolves allegations that Abbott knowingly paid prominent physicians for teaching assignments, speaking engagements and conferences with the expectation that these physicians would arrange for the hospitals with which they were affiliated to purchase Abbott’s carotid, biliary and peripheral vascular products.  As a result, the United States alleged Abbott violated the Anti-Kickback Act and caused the submission of false claims to Medicare for the procedures in which these Abbott products were used.

“Physicians should make decisions regarding medical devices based on what is in the best interest of patients without being induced by payments from manufacturers competing for their business,” said U.S. Attorney Bill Killian of the Eastern District of Tennessee.

“Offering financial inducements can distort health care decision-making,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta.  “OIG and our law enforcement partners vigilantly protect government health programs from such alleged abuses.”

Carotid and peripheral vascular products are used to treat circulatory disorders by increasing blood flow to the head and various parts of the body, respectively.  Biliary products are used to treat obstructions that occur in the bile ducts.

The settlement resolves allegations originally brought in a lawsuit filed by Steven Peters and Douglas Gray, former Abbott employees, under the qui tam provision of the False Claims Act , which allows whistleblowers to file suit on behalf of the United States for false claims and share in any recovery   As part of today’s resolution, Peters and Gray will receive a total payment of more than $1 million. 

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 Health and Human Services Secretary 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 $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

This settlement was the result of an investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Eastern District of Tennessee and the Northern District of California and the Office of Inspector General at the U.S. Department of Health and Human Services.

The lawsuit is captioned United States ex rel. Peters et al. v. Abbott Laboratories, Inc., Civil Action No. 3:09-CV-430 (E.D. Tenn.).   The claims settled by this agreement are allegations only, and there has been no determination of liability.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to speak at the “No More! Coming Together to End the Violence” 2013 Regional Summit held on October 25, 2013, and sponsored by the Guam Coalition Against Sexual Assault & Family Violence.

U.S. Attorney Limtiaco spoke on the topic of “Sexual Assault and Human Trafficking in Our Region” and presented “Strategies for Justice:  A Pacific Regional Response to Combat Human Trafficking.”  The “Pacific Regional Response to Combat Human Trafficking” initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders.  The response calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities.  Providing fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics, to law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders, in our Pacific region island communities, is critical to effective prevention and enforcement efforts in the region.

U.S. Attorney Limtiaco also provided an overview of the Blue Lighting Campaign.  The Blue Lightning Campaign was created in recognition of the fact that victims of human trafficking are trafficked through the use of airlines.  It is a Department of Homeland Security initiative that provides U.S. commercial airlines and their employees training materials on the indicators of suspected human trafficking and more importantly, provides airlines with a voluntary mechanism to identify suspected human trafficking victims and notify federal authorities.   U.S. Attorney Limtiaco further discussed domestic and international trafficking, human trafficking laws, and public awareness and enforcement efforts.

The two-day Summit was attended by approximately 154 participants, including participants from our neighboring islands, the Commonwealth of the Northern Mariana Islands and the Republic of the Marshall Islands.

Attached is a photo taken at the 2013 Guam Coalition Against Sexual Assault & Family Violence Regional Summit.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands participated at the 2013 Foreign Labor Compliance Conference held in Guam on March 19-20, 2013.  U.S. Attorney Limtiaco spoke on the topic, “An Overview of the Pacific Regional Response to Combat Human Trafficking – Collaboration in the Western Pacific.”  The conference was sponsored by the Guam Department of Labor and over 200 people attended the two-day training.

At the Conference, U.S. Attorney Limtiaco discussed Department of Justice initiatives, including Project Safe Childhood (PSC), Project Safe Neighborhoods (PSN) and Diverse Community Outreach. 

Launched in May 2006, PSC is a nationwide initiative designed to protect children from online sexual exploitation and abuse.  Led by U.S. Attorneys= Offices, the Child Exploitation and Obscenity Section of the Department=s Criminal Division, and Internet Crimes Against Children task forces, PSC marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims.  PSC’s goal is to educate parents about the potential dangers that their children face online, and warns potential online predators that exploiting a child online is a serious federal offense. 

PSN is a nationwide commitment to aggressively prosecute defendants who engage in drug distribution, gang involvement and violent crime.   

The purpose of the Diverse Community Outreach is to increase and improve communication and collaboration between the community and law enforcement.  Faith-based community members and Consulate Offices are invited and participate in the initiative.  Issues discussed at the Diverse Community Outreach meetings include human trafficking; hate crimes and civil rights; immigration; labor; cultural competency; national security; and crime prevention. 

See attached photo of U.S. Attorney Alicia Limtiaco addressing the participants.

Conrad Alvin Barrett, 27, has been charged with a federal hate crime related to a racially-motivated assault of a 79-year-old African American man, announced Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division along with U.S. Attorney Kenneth Magidson of the Southern District of Texas and Special Agent in Charge Stephen L. Morris of the FBI.

“Hate crimes tear at the fabric of entire communities,” said Acting Assistant Attorney General Samuels. “As always, the Civil Rights Division will work with our federal and state law enforcement partners to ensure that hate crimes are identified and prosecuted, and that justice is done.”

The criminal complaint was filed under seal Dec. 24, 2013, and unsealed today upon Barrett's arrest. He is expected to make an initial appearance before U.S. Magistrate Judge Frances Stacy at 10:00 a.m. CST.

The complaint charges Barrett, of Katy, Texas, with one count of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. According to the complaint, on Nov. 24, 2013, Barrett attacked the elderly man because of the man’s race and color in what Barrett called a “knockout.”

“Suspected crimes of this nature will simply not be tolerated,” said U.S. Attorney Magidson. “Evidence of hate crimes will be vigorously investigated and prosecuted with the assistance of all our partners to the fullest extent of the law.”

Barrett allegedly recorded himself on his cell phone attacking the man and showed the video to others. The complaint alleges Barrett made several videos, one in which he identifies himself and another in which he makes a racial slur. In addition, Barrett had allegedly been working up the “courage” to play the “knockout game” for approximately a week.

The “knockout game” is an assault in which an assailant aims to knock out an unsuspecting victim with one punch. According to the complaint, the conduct has been called by other names and there have been similar incidents dating as far back as 1992.

According to the complaint, Barrett comments in a video that “the plan is to see if I were to hit a black person, would this be nationally televised?” The complaint further alleges Barrett claims he would not hit “defenseless people” just moments before punching the elderly man in the face. Barrett allegedly hit the man with such force that the man immediately fell to the ground. Barrett then laughed and said “knockout,” as he ran to his vehicle and fled, according to allegations. The complaint indicates the victim suffered two jaw fractures and was hospitalized for several days as a result of the attack.

“It is unimaginable in this day and age that one could be drawn to violently attack another based on the color of their skin,” said Special Agent in Charge Morris. “We remind all citizens that we are protected under the law from such racially motivated attacks, and encourage everyone to report such crimes to the FBI.”

If convicted, Barrett faces a statutory maximum of 10 years in prison and a $250,000 fine.

The investigation was conducted by the FBI in cooperation with the Fulshear and Katy, Texas, Police Departments as well as the Drug Enforcement Administration. The case is being prosecuted by Civil Rights Division Trial Attorneys Saeed Mody and Olimpia Michel and Assistant United States Attorneys Ruben R. Perez and Joe Magliolo in cooperation with Ft. Bend County District Attorney John Healey.

A criminal complaint is merely an accusation of criminal conduct, not evidence. A defendant is presumed innocent unless proven guilty through due process of law.

U.S. District Court Judge Kim R. Gibson of the Western District of Pennsylvania has entered a consent decree of permanent injunction against Metzler & Sons LLC and Pleasant View Farms Inc., the Justice Department announced today. The permanent injunction was also entered against Rodney L. Metzler, Gretchen A. Metzler, Rodney T. Metzler and Lee M. Metzler, all of whom have ownership in the firms. The permanent injunction is designed to prevent the distribution of foods that contain excessive drug residue.

The Pennsylvania firms, Metzler & Sons LLC and Pleasant View Farms Inc., own and operate several farms that sell cows for slaughter and for use as food. As set forth in the complaint filed on Dec. 18, 2013, inspections by United States Food and Drug Administration (FDA) and laboratory analyses performed by the United States Department of Agriculture (USDA) indicated that the defendants sold for slaughter for use as food dairy cows and bob veal calves that contained excessive and illegal residues of drugs in their edible tissues. According to the complaint, these inspections revealed that the defendants delivered adulterated food into interstate commerce in violation of the Federal Food, Drug and Cosmetic Act (FDCA). As set forth in the complaint, the defendants received numerous warnings from both FDA and USDA that their conduct violated the law, and despite these warnings, the defendants continued to hold animals that they sold for slaughter as food in a manner that may have rendered the animals’ edible tissues injurious to the public health.

As set forth in the complaint, levels of new animal drugs in the edible tissues of animals in amounts above the tolerances established in federal regulations pose a significant public health

risk. For example, consumers of edible animal tissues who are susceptible to antibiotics may experience severe allergic reactions as a result of ingesting food containing out-of-tolerance

antibiotic levels. Furthermore, food containing above-tolerance antibiotic levels contributes to the development of antibiotic-resistant strains of bacteria in those who eat or handle food containing residues of such drugs.

The complaint filed by the United States asked the court to permanently enjoin the firms and individual defendants from violating the FDCA. The permanent injunction entered by the court requires the firms and individual defendants to take a wide range of actions to correct their violations and ensure that they do not happen again. Among other actions, the firms must establish and implement a written record-keeping system for every animal receiving drugs to prevent the firms from selling or distributing any animals whose edible tissues contain new animal drugs in amounts above the levels permitted by law. The firms must also establish and implement a system that ensures that their use of new animal drugs conforms to the uses approved by the FDA or, for new animal drugs used in an extra-label manner, to the lawful written order of a licensed veterinarian.

“Foods that contain excessive levels of antibiotics and other drugs pose a significant risk to the public health,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “Along with our partners at HHS, FDA and USDA, the Department of Justice is committed to making sure that the food on our tables is safe to eat.”

FDA recently said that it is implementing a voluntary plan with industry to phase out the use of certain antibiotics for enhanced food production. For more information on this, you can visit the FDA website at http://www.fda.gov/ForConsumers/ConsumerUpdates/ucm378100.htm .

Assistant Attorney General Delery thanked the FDA for referring this matter to the Department of Justice. Roger Gural, Trial Attorney at the Consumer Protection Branch of the Justice Department, in conjunction with Assistant U.S. Attorney David Lew in the Western District of Pennsylvania, and Christopher Fanelli, Assistant Chief Counsel for Enforcement of the Food and Drug Division, Department of Health and Human Services, brought this case on behalf of the United States.

A federal court in Montgomery, Ala., permanently barred Kenya Hendrix Adams from preparing tax returns for others, the Justice Department announced today. The permanent injunction order was signed by U.S. District Court Judge Mark E. Fuller of the Middle District of Alabama.

The order, filed on Dec. 20, 2013, also requires Adams to turn over to the United States copies of all returns or claims for refund that she prepared after Jan. 1, 2008, and to notify each person for whom she prepared returns since that date. The order authorizes the United States to monitor Adams’ compliance with the terms of the order.

The government’s complaint alleged that Adams repeatedly prepared federal tax returns that understated her clients’ federal tax liabilities. According to the complaint, Adams did so by falsely claiming or inflating tax credits or fabricating deductions. The suit alleges that the harm to the United States Treasury as a result of her conduct could be in the millions of dollars.

“These fraudulent tax preparers create a horrible problem in this area,” said U.S. Attorney George L. Beck Jr. of the Middle District of Alabama. “What these people are doing must be stopped. I applaud the IRS for taking the steps to shut down those fraudulent tax preparers.”

Claiming bogus tax refunds is one of the IRS’s Dirty Dozen Tax Scams. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website . For more information about choosing a tax return preparer, see the IRS website and the IRS YouTube Channel .

An Ohio attorney and lobbyist pleaded guilty today for his role in a bribery and money laundering scheme involving the Ohio Treasurer’s Office.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, and Special Agent in Charge Kevin R. Cornelius of the FBI’s Cincinnati Division made the announcement.

Mohammed Noure Alo, 35, of Columbus, Ohio, appeared before U.S. District Judge Michael H. Watson of the Southern District of Ohio and pleaded guilty to aiding and abetting honest services wire fraud. He faces a maximum penalty of 20 years in prison, and sentencing will be set at a later date.

Alo is a partner and founding member of a Columbus-based law firm and became a registered lobbyist to the State of Ohio in 2010. Court records state that from approximately January 2009 through January 2011, Alo admitted he conspired with his close personal friend Amer Ahmad, 38, of Chicago, and others to use Ahmad’s role as deputy treasurer to direct official State of Ohio broker services business to Douglas E. Hampton, 39, a securities broker from Canton, Ohio, in return for payments from Hampton. Hampton funneled in excess of $123,000 to Alo. Ahmad and Joseph M. Chiavaroli, 33, of Chicago, concealed additional payments from Hampton by passing them through the accounts of a landscaping business in which Ahmad and Chiavaroli held ownership interests.

As a result of the scheme, Hampton received approximately $3.2 million in commissions for 360 trades on behalf of the Ohio Treasurer’s Office. Ahmad and his co-conspirators received in excess of $500,000 from Hampton. Both Hampton and Chiavaroli entered guilty pleas in August 2013.

Ahmad was indicted on Aug. 15, 2013, on charges of conspiracy, honest services wire fraud, money laundering, conspiracy to commit money laundering, federal program bribery, and false statements. He is scheduled for trial on March 3, 2014. A criminal indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Douglas W. Squires of the Southern District of Ohio and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section.

The Justice Department and the Consumer Financial Protection Bureau filed a consent order today to resolve allegations that National City Bank engaged in a pattern or practice of discrimination that increased loan prices for African-American and Hispanic borrowers who obtained residential mortgages between 2002 and 2008 from National City Bank’s retail offices and nationwide network of mortgage brokers. 

The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the Western District of Pennsylvania.  The complaint alleges that National City Bank violated the Fair Housing Act and the Equal Credit Opportunity Act (ECOA) by charging more than 75,000 African-American and Hispanic borrowers higher loan prices not based on borrower risk, but because of their race or national origin.  Specifically, the allegations involve loans made to African-American and Hispanic borrowers through the more than 400 retail offices directly operated by National City Bank nationwide between 2002 and 2008.  The allegations also involve loans made to African-American and Hispanic borrowers between 2003 and 2008 through National City Bank’s national network of mortgage brokers.  National City Bank, which was headquartered in Cleveland , Ohio, was purchased in 2009 by Pittsburgh-based PNC Financial Services Group, which is the successor in interest to National City Bank. 

“This settlement will provide deserved relief to thousands of African-American and Hispanic borrowers who suffered discrimination at the hands of National City Bank,” said Attorney General Eric Holder.  “As alleged, the bank charged borrowers higher rates not based on their creditworthiness, but based on their race and national origin.  This alleged conduct resulted in increased loan prices for minority borrowers.  This case marks the Justice Department’s latest step to protect Americans from discriminatory lending practices, and shows we will always fight to hold accountable those who take advantage of consumers for financial gain.”

“With today’s settlement, thousands of African-American and Hispanic borrowers who were discriminated against by National City Bank will be entitled to compensation,” said Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division.  “We look forward to further collaboration with the Bureau in protecting consumers from illegal and discriminatory lending practices.”

“Borrowers should never have to pay more for a mortgage loan because of their race or national origin,” said Consumer Financial Protection Bureau Director Richard Cordray.  “Today’s enforcement action puts money back in the pockets of harmed consumers and makes clear that we will hold lenders accountable for the effects of their discriminatory practices.”

"It undermines confidence in our banking system when people get different deals not only based on their credit scores, but their skin color,” said U.S. Attorney for the Northern District of Ohio Steve Dettelbach.  “With all the positive things for which National City Bank stood for so many years, this is a troubling epilogue to be entered on the other side of the ledger.  Hopefully, today's settlement will afford some relief to customers who were shortchanged by this conduct."

“Our commitment to assure fair and equal treatment under the law is absolute,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania.  “This settlement addresses a serious failure by National City to protect potential homebuyers from discriminatory lending practices.”

           National City Bank’s business practices allowed its loan officers and mortgage brokers discretion to vary a loan’s interest rate and fees from the price it set based on the borrower’s objective credit-related factors.  This subjective and unguided pricing discretion resulted in African-American and Hispanic borrowers paying more than similarly qualified non-Hispanic White borrowers.

The allegations in the complaint relate solely to loans originated by National City Bank and do not relate to any mortgage lending practices of PNC Financial Services Group.

Under the terms of the proposed settlement, PNC will pay $35 million dollars into a fund for the benefit of victims of National City Bank’s mortgage discrimination.  The proposed settlement provides for an independent administrator to contact and disburse payments to borrowers whom the agencies’ identify as victims of National City Bank’s discrimination, at no cost to the borrowers.  PNC will pay all costs and expenses of the administrator.  Borrowers who are eligible for compensation will be contacted by the administrator.  The department will make a public announcement and post contact information on its website once the administrator begins contacting victims.  Individuals who believe that they may have been victims of lending discrimination by National City Bank and have questions about the settlement may email the department at nationalcitybank@usdoj.gov .

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 31 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act.  The settlements in these matters provide for over $800 million in monetary relief for impacted communities and individual borrowers.  The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications .

The Civil Rights Division and the Consumer Financial Protection Bureau are members of the Financial Fraud Enforcement Task Force.  President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.  For more information on the task force, visit www.StopFraud.gov.

A copy of the complaint and proposed order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.

A 63-count superseding indictment charging Chatonda Khofi, Ishmael Kosh, Amadou Sangaray and Francis Saygbay in a conspiracy to defraud the Internal Revenue Service (IRS) was unsealed on Monday, December 23, in Minneapolis, Minn., the Justice Department and IRS announced today.  The superseding indictment was returned by a federal grand jury on Nov. 19, 2013, and alleges that Primetime Tax Services Inc. was a tax return preparation business with three storefronts in the Minneapolis area.  Khofi worked as the Chief Executive Officer of Primetime, and Kosh and Sangaray worked as managers of the Brooklyn Center location of Primetime.  All four named defendants allegedly prepared false tax returns under the name of Primetime.

According to court documents, Khofi, Kosh, Sangaray and Saygbay conspired amongst themselves and with others to prepare and file false individual income tax returns for the customers of Primetime.  Some of these returns reported false dependents, false deductions, false Schedule C business losses and false wage income.  These false entries resulted in fraudulently inflated refunds for their customers.  As part of the scheme, court documents allege that the defendants prepared and filed false Minnesota state income tax returns for their customers that contained the same or similar false information as reported on the federal income tax returns.  From 2007 to 2009, Primetime filed over 2,000 customer federal income tax returns with the IRS.

The indictment further charges each defendant with multiple counts of aggravated identity theft and multiple counts of aiding and assisting in the preparation of false individual income tax returns.  The aggravated identity theft charges stem from the defendants’ alleged use of the names and social security numbers of actual persons to falsely claim as dependents on their customers’ individual income tax returns.

According to the indictment, the defendants also accompanied some customers to check-cashing businesses to cash their falsely inflated tax refund checks, then demanded a portion of the cashed refund check in addition to tax preparation fees already collected.  The indictment alleges that, in some instances, the defendants withdrew cash from debits cards containing their customers’ refunds without permission, again in addition to the tax preparation fees they had already collected. 

An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.  If convicted, the defendants face a maximum potential sentence of five years in prison for the conspiracy count and three years in prison for each count of aiding in the preparation of a false tax return.  The aggravated identity theft counts have a mandatory two year sentence. 

The case was investigated by special agents of IRS-Criminal Investigation.  It is being prosecuted by Trial Attorneys Dennis Kihm and Thomas Flynn of the Justice Department's Tax Division.

The former Ohio deputy treasurer pleaded guilty today for his role in leading a bribery and money laundering scheme involving the Ohio Treasurer’s Office.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, and Special Agent in Charge Kevin R. Cornelius of the FBI’s Cincinnati Division made the announcement.

Amer Ahmad, 38, of Chicago, appeared before U.S. District Judge Michael H. Watson of the Southern District of Ohio and pleaded guilty to conspiracy, which carries a maximum penalty of five years in prison, and federal program bribery, which carries a maximum penalty of 10 years in prison. Sentencing will be scheduled at a later date.

According to court documents, from approximately January 2009 through January 2011, Ahmad and others conspired to use Ahmad’s role as deputy treasurer to direct official State of Ohio broker services business to Douglas E. Hampton, 39, a securities broker from Canton, Ohio, in return for payments from Hampton. Ahmad and Joseph M. Chiavaroli, 33, of Chicago, concealed those payments from Hampton by passing them through the accounts of a landscaping business in which Ahmad and Chiavaroli held ownership interests. Hampton also funneled in excess of $123,000 to Mohammed Noure Alo, 35, of Columbus, Ohio, an attorney and lobbyist who was Ahmad’s close personal friend and business associate.

As a result of the scheme, Hampton received approximately $3.2 million in commissions for 360 trades on behalf of the Ohio Treasurer’s Office. Ahmad and his co-conspirators received in excess of $500,000 from Hampton. Hampton and Chiavaroli entered guilty pleas in August 2013 and Alo pleaded guilty on Dec. 20, 2013.

The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Douglas W. Squires of the Southern District of Ohio and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section.

WASHINGTON - El Departamento de Justicia y la Oficina para la Protección Financiera del Consumidor [Consumer Financial Protection Bureau (CFPB)] presentaron hoy una orden por consentimiento en resolución de alegatos de que National City Bank exhibió un patrón o práctica de discriminación que aumentó los precios de los préstamos para prestatarios afroestadounidenses e hispanos que obtuvieron hipotecas residenciales entre 2002 y 2008 de las oficinas minoristas y la red nacional de corredores hipotecarios de National City Bank.

El acuerdo conciliatorio, que está sujeto a aprobación del tribunal, fue presentado junto con la demanda de las agencias en el Tribunal Federal de Distrito del Distrito Oeste de Pensilvania. La demanda alega que National City Bank violó la Ley de Vivienda Justa y la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)] al cobrarles a más de 75,000 prestatarios afroestadounidenses e hispanos precios de préstamos más altos no basados en el riesgo que presentaba el prestatario, sino en su raza u origen nacional. Específicamente, los alegatos se refieren a préstamos realizados a prestatarios afroestadounidenses e hispanos a través de más de 400 oficinas minoristas operadas directamente por National City Bank en todo el país entre 2002 y 2008. Los alegatos también se refieren a préstamos realizados a prestatarios afroestadounidenses e hispanos entre 2003 y 2008 a través de la red nacional de corredores hipotecarios de National City Bank. National City Bank, con sede central en Cleveland , Ohio, fue comprada en 2009 por PNC Financial Services Group, con sede en Pittsburgh, la sucesora en interés de National City Bank.

"El acuerdo conciliatorio permitirá merecida compensación a miles de prestatarios afroestadounidenses e hispanos que sufrieron discrimen por National City Bank", señaló el Secretario de Justicia de los Estados Unidos Eric Holder. "Según los alegatos, el banco les cobró a los prestatarios tasas más altas no basadas en su solvencia, sino en su raza y origen nacional. Esta presunta conducta resultó en precios de préstamos más altos para los prestatarios minoritarios. Este caso marca la más reciente medida del Departamento de Justicia para proteger a los estadounidenses contra las prácticas de otorgamiento de préstamos discriminatorias, y demuestra que seguiremos luchando siempre contra quienes se aprovechen de los consumidores por ganancia financiera".

"Con el acuerdo conciliatorio de hoy, miles de prestatarios afroestadounidenses e hispanos que fueron víctimas de discriminación por parte de National City Bank tendrán derecho a indemnización", indicó la Secretaria de Justicia Auxiliar Interina Jocelyn Samuels de la División de Derechos Civiles del Departamento de Justicia. "Nos complacerá seguir colaborando en el futuro con la CFPB para proteger a los consumidores contra prácticas de otorgamiento de préstamos ilegales y discriminatorias".

"Prestatarios nunca deberán tener que pagar más por una hipoteca debido a su raza u origen nacional", señaló el Director la Oficina para la Protección Financiera del Consumidor Richard Cordray. "La acción de legal de hoy devuelve dinero a los bolsillos de consumidores perjudicados y deja claro que responsabilizaremos a los prestamistas por los efectos de sus prácticas discriminatorias".

"Se socava la confianza en nuestro sistema bancario cuando las personas obtienen diferentes condiciones de préstamo no basadas en sus puntajes de crédito, sino en el color de su piel", dijo el Fiscal Federal para el Distrito Norte de Ohio Steve Dettelbach. "Con todas las cosas positivas que National City Bank representó durante tantos años, éste es un epílogo preocupante a ser ingresado en el lado opuesto de hoja de contabilidad. Esperamos que el acuerdo conciliatorio de hoy le brinde cierta reparación a los clientes perjudicados por esta conducta".

"Nuestro compromiso de asegurar un tratamiento justo e igualitario bajo la ley es absoluto", dijo David J. Hickton, Fiscal Federal para el Distrito Oeste de Pensilvania. "Este acuerdo conciliatorio resuelve la falla grave por parte de National City de no proteger a potenciales compradores de vivienda contra las prácticas de otorgamiento de préstamos discriminatorias".

Las prácticas comerciales de National City Bank permitieron que sus agentes de préstamos y corredores hipotecarios variaran la tasa de interés y los cargos de préstamos respecto del precio que estableció con base en factores crediticios objetivos del prestatario. Debido a esta libertad subjetiva y libre, los prestatarios afroestadounidenses e hispanos acabaron por pagar más que prestatarios blancos no hispanos con calificaciones similares.

Los alegatos de la demanda se refieren únicamente a préstamos originados por National City Bank y no están relacionados con las prácticas de otorgamiento de préstamos hipotecarios de PNC Financial Services Group.

Bajo los términos del acuerdo conciliatorio propuesto, PNC pagará 35 millones de dólares a un fondo para el beneficio de las víctimas de la discriminación hipotecaria exhibida por National City Bank. El acuerdo conciliatorio propuesto dispone que un administrador independiente contacte y realice los pagos a prestatarios identificados por las agencias como víctimas de discriminación por parte de National City Bank, sin ningún costo para los prestatarios. PNC pagará todos los costos y gastos del administrador. Los prestatarios que reúnan los requisitos para compensación serán contactados por el administrador. El Departamento realizará un anuncio público y publicará información de contacto en su portal en Internet una vez que el administrador comience a comunicarse con las víctimas. Las personas que crean que pueden haber sido víctimas de discriminación en el otorgamiento de préstamo por parte de National City Bank y tengan preguntas sobre el acuerdo conciliatorio pueden enviar un mensaje de correo electrónico al departamento a nationalcitybank@usdoj.gov.

La Unidad de Préstamos Justos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles es responsable, en el Departamento de Justicia, de hacer valer las leyes de otorgamiento justo de préstamos. Desde su fundación en febrero de 2010, la Unidad de Préstamos Justos ha iniciado o resuelto 31 casos asociados con préstamos bajo la Ley de Vivienda Justa [Fair Housing Act], ECOA y la Ley de Amparo Civil para Militares [Servicemembers Civil Relief Act]. Los acuerdos conciliatorios logrados en estos casos consistieron en más de 800 millones de dólares en indemnizaciones a comunidades y prestatarios individuales afectados. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso bajo ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications.

La División de Derechos Civiles y la Oficina para la Protección Financiera del Consumidor son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero. El Presidente Obama estableció la fuerza de tarea interagencial para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades reguladoras, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando juntos, aprovechan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.

Para obtener una copia de la demanda y la orden propuesta, así como también información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en www.justice.gov/fairhousing.

An unlicensed nurse who fled after being charged in 2008 and was captured this year was sentenced today to serve 108 months in prison for her role in a fraud scheme that resulted in more than $11 million in fraudulent claims to Medicare.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.

Carmen Gonzalez, 39, of Cape Coral, Fla., worked at St. Jude Rehabilitation Center, a fraudulent HIV infusion clinic in Miami, that was controlled by her cousins, Jose, Carlos and Luis Benitez, aka the Benitez Brothers. Gonzalez was also sentenced for failing to appear at a June 2008 bond hearing. The sentencing follows her conviction at trial to one count of conspiracy to defraud the United States to cause the submission of false claims and to pay health care kickbacks and one count of conspiracy to commit health care fraud. Gonzalez had previously pleaded guilty to a separate charge of failure to appear.

Gonzalez was sentenced by Chief United States District Judge Federico A. Moreno in Miami, who also sentenced her to serve three years of supervised release.

Evidence at trial revealed that Gonzalez was an unlicensed nurse who paid thousands of dollars over a five month period to HIV beneficiaries so that St. Jude could submit millions of dollars in false and fraudulent claims to Medicare. Gonzalez knew that St. Jude billed millions of dollars to Medicare for expensive HIV infusion therapy that was neither medically necessary nor provided. Gonzalez fabricated patient medical records to facilitate and conceal the fraud, and these fabricated records were utilized to support the false and fraudulent claims submitted to Medicare on behalf of St. Jude.

On Oct. 17, 2013, Gonzalez pleaded guilty to knowingly and willfully failing to appear at a June 2008 hearing as directed by Judge Moreno. Court documents reveal that Gonzalez was released on bond pending trial, but she knowingly and willfully failed to appear as directed by the court to a June 2008 hearing.

In January 2013, Gonzalez’s father, Enrique Gonzalez, was sentenced to 70 months in prison by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida for his role in separate health care fraud conspiracy.

The Benitez Brothers remain fugitives. Anyone with information regarding their whereabouts is urged to contact HHS-OIG at 202-619-0088.

The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. This case was prosecuted by Trial Attorneys Allan Medina and Nathan Dimock of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Timothy Stafford, 41,  pleaded guilty today in federal court in Nashville, Tenn.,  for his role in the April 30, 2012, cross burning in front of an interracial family’s home in Minor Hill, Tenn., the Department of Justice announced.

 Stafford pleaded guilty to conspiring with others to threaten, intimidate and interfere with an interracial couple’s enjoyment of their housing rights.  Stafford admitted in court that on the night of April 30, 2012, he and two other individuals devised a plan to burn a cross in the yard of an interracial couple in Minor Hill, Tenn..  Stafford constructed a wooden cross in a workshop behind his house.  Stafford and his co-conspirators then purchased diesel fuel and covered the cross in diesel fuel-soaked cloth.  Stafford then drove his conspirators and the cross to the victims’ residence.  Upon arriving at the residence, the other conspirators placed the cross in the driveway and ignited it.  Stafford and the conspirators chose to burn the cross at the victims’ house, because of their race, as well as the race of their child.  Stafford admitted to targeting the interracial couple because he did not want interracial dating in his community.

Ivan “Rusty” London IV, 21, of Lexington, Ky., previously pleaded guilty for his role in the conspiracy, and is currently awaiting sentencing. 

“Hate motivated crimes will not be tolerated in our country,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “The Justice Department will vigorously prosecute individuals that violate the rights of others because of race.”

 “The right to live in a community of your choosing, free of acts of intimidation that are meant to inspire fear, is a fundamental right in the United States,” said David Rivera, U.S. Attorney for the Middle District of Tennessee.  “The Department of Justice takes these transgressions very seriously and to the extent that individuals interfere with fundamental civil rights, they will be prosecuted to the full extent of the law.”

Timothy Stafford faces a statutory maximum of 10 years in prison.  Ivan London faces a statutory maximum of 5 years in prison.

This case was investigated by the Columbia, Tenn., Division of the FBI and is being prosecuted by Assistant U.S. Attorney Blanche Cook of the Middle District of Tennessee and Trial Attorney Jared Fishman of the Civil Rights Division.

A patient recruiter and a therapy staffing company owner were sentenced today to serve 50 months and 46 months in prison, respectively, for their participation in a $7 million health care fraud scheme involving defunct home health care company Anna Nursing Services Corp.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.

Ivan Alejo, 48, and Hugo Morales, 37, both of Miami, were sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. In addition to their prison terms, Alejo and Morales were both sentenced to serve three years of supervised release. Alejo and Morales were also ordered to pay jointly and severally with their co-defendants $6,928,931 and $1,958,279, respectively, in restitution.

In August 2013, Alejo and Morales pleaded guilty before Judge Martinez to conspiracy to commit health care fraud.

Alejo worked as a patient recruiter at Anna Nursing, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries. Morales owned a therapy staffing company, Professionals Therapy Staffing Services Inc., which provided therapists to Anna Nursing.

According to court documents, co-conspirators of Alejo and Morales operated Anna Nursing for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.

Alejo’s primary role in the scheme at Anna Nursing involved negotiating and paying kickbacks and bribes, interacting with patient recruiters and assisting in the submission of fraudulent claims to the Medicare program. Alejo and his co-conspirators would pay kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Anna Nursing for home health and therapy services that were medically unnecessary and/or not provided. Alejo and his co-conspirators would pay kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications and other documentation. Alejo and his co-conspirators would use the prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services, which Alejo knew was in violation of federal criminal laws.

Morales’s primary role in the scheme at Anna Nursing involved operating Professionals Therapy, where he and others created fictitious progress notes and other patient files indicating that therapists from Professionals Therapy had provided physical or occupational therapy services to particular Medicare beneficiaries, when in many instances those services had not been provided and/or were not medically necessary. Morales knew the documents he and others from Professionals Therapy falsified were used to support false claims for home health care services billed to Medicare by his co-conspirators at Anna Nursing, which Morales knew was in violation of federal criminal laws.

From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care services that were not medically necessary and/or not provided.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Francis Marimo was sentenced today in connection with an odometer tampering scheme, the Justice Department announced.  Marimo was sentenced by U.S. District Court Judge Louise Wood Flanagan in New Bern, N.C., to serve 18 months in prison and one year of supervised release.  Marimo also was ordered to pay $190,845 in restitution.

“Used car shoppers rely on mileage readings to judge both the value and safety of vehicles they might purchase,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Tampering with a vehicle’s odometer in order to swindle a would-be buyer is a federal crime that will be prosecuted.” 

In June, Marimo pleaded guilty to two counts of odometer tampering.  According to the Information filed in the case, from 2008 through 2012, Marimo purchased used vehicles primarily through online advertisements, then replaced the existing odometers with odometers showing lower mileages.  Marimo sold these vehicles to consumers in the Raleigh, N.C., area while representing the low mileages on the replacement odometers as accurate.  Mileage for one of the vehicles described in the Information was “rolled back” more than 100,000 miles.  As part of a plea agreement, Marimo agreed that his conduct had caused between $120,000 and $200,000 in losses to consumers.

“The importance of accurate mileage readings on used car odometers cannot be overstated,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker.  “This case demonstrates our determination to protect the consumer from this type of fraud.”

The North Carolina Division of Motor Vehicles and the National Highway Traffic Safety Administration (NHTSA) Office of Odometer Fraud Investigation investigated this case.  The case was prosecuted by the Justice Department’s Civil Division, Consumer Protection Branch.

More information on odometer fraud is available at www.nhtsa.gov/Odometer-Fraud .