District Not Recorded

GUAM –ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced the filing on October 30, 2013, of federal criminal charges against MICHAEL SAN NICOLAS SANTOS stemming from recent bomb threats directed at the Dededo Mall.

The federal criminal complaint (a copy of which is attached) alleges that on three occasion – September 26, 2013, October 10, 2013, and October 29, 2013 – SANTOS, using a cellular phone, called 911 and falsely reported a bomb threat to the Dededo Mall located in Dededo, Guam. On each of those dates, SANTOS was scheduled to appear as a defendant in a small claims case pending in the Superior Court of Guam, Northern Court Satellite, which is located in the Dededo Mall. Each of the phone calls was made shortly before SANTOS’ scheduled court appearance and caused the evacuation of the court and other occupants of the Dededo Mall, and the continuance of SANTOS’ hearing and all court cases. Santos was arrested on October 29, 2013, shortly after the most recent bomb threat.

The complaint charges three counts of violating Title 18, United States Code, Section 844(e). Under that statute, it is a federal criminal offense to willfully make a threat or maliciously convey false information, through the use of a telephone, an instrument of interstate or foreign commerce, concerning an alleged attempt being made to unlawfully damage or destroy a building by means of an explosive. Each violation of the statute carries a maximum potential sentence of ten years in federal prison and a $250,000 fine.
The defendant made his initial appearance before U.S. Magistrate Judge Joaquin V.E. Manibusan, Jr. on October 30, 2013, at 10:00 am. The Court set a preliminary examination hearing for November 13, 2013, at 2:30 pm, and remanded the defendant to the custody of the U.S. Marshals Service.

The investigation was conducted by the Federal Bureau of Investigation, the Guam Police Department, E911 personnel, the Guam Fire Department, and the Joint Terrorism Task Force. The case is being prosecuted by Assistant United States Attorney Marivic David.

The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.

Attorney General Eric Holder today announced a total of $6.7 million in grants to state and local criminal and civil legal services organizations across the country that provide legal defense services for the poor.  These grants from the Office of Justice Programs (OJP) are part of the Justice Department’s continuing efforts to improve indigent defense, which is often underfunded and understaffed, and to support training, mentoring, technical assistance, leadership development and research to enhance the effectiveness of adult, juvenile and tribal indigent defense practices.

 “Everyone accused of a serious crime has the right to legal representation – even if she or he cannot afford it,” said Attorney General Holder.  “In recent years, the Department of Justice has made a commitment to improving the delivery, quality and availability of legal services for everyone in our country, including the very poor.  Today's significant grant awards will help ensure America’s criminal justice system is fair for every defendant, regardless of wealth.”

 “These awards, in conjunction with other efforts we’re making to strengthen indigent defense, will fortify our public defender system and help us to meet our constitutional and moral obligation to administer a justice system that matches its demands for accountability with a commitment to fair, due process for poor defendants,” said Associate Attorney General Tony West.

 The FY 2013 grants, which promote cost-effective innovations to improve indigent defense, are administered by OJP’s Bureau of Justice Assistance (BJA), National Institute of Justice (NIJ) and Office of Juvenile Justice and Delinquency Prevention (OJJDP).

 In FY 2013, BJA awarded a total of $5.4 million.  Of this amount, $1 million was awarded to Gideon’s Promise, a nonprofit organization that partners with public defender offices to build a community of attorneys committed to indigent defense reform.  The funds will provide 25 new attorneys, including criminal defense lawyers working on tribal lands; establish training and leadership development for public defender trainers and supervisors and a semi-annual leadership summit for chief defenders; and create an advisory council to test measures and indicators showing the outcomes of providing effective counsel for all individuals. 

 Another $90,000 was awarded to the states of Mississippi, Tennessee and Utah through BJA’s National Training and Technical Assistance Center (NTTAC).  Through NTTAC, BJA assists jurisdictions with meeting their constitutional obligation to provide adequate representation to indigent defendants.  Services include assessing the effectiveness of indigent defense systems, developing recommendations to ensure adequate and appropriate services are provided consistently throughout the state and determining appropriate measures for evaluating a defender services program.

 The Measures for Justice (MFJ) initiative, which will provide a framework for using indicator metrics to evaluate local criminal justice systems against a national standard of excellence, received $50,000.  MFJ is conducting a pilot study in Milwaukee to examine the capacity and availability of resources at the local level and to determine where additional resources are needed within the criminal justice system.

Answering Gideon’s Call, a national assistance program to improve the effectiveness of right to counsel services, received $1.8 million of the $5.4 million awarded by BJA.  Of the $1.8 million, Seattle University received $450,000 to, in partnership with the Sixth Amendment Center (6AC), provide training and technical assistance to educate policymakers and aid the unfunded, legislatively established Office of the Public Defender in Mississippi and work with the Utah Judicial Council to develop standards assessing indigent defense services to help state legislatures meet their constitutional obligations.  Another $891,854 was awarded to the National Association of Criminal Defense Lawyers (NACDL) to train public defenders and assigned counsel by regions to meet specific jurisdictional needs, such as helping them to better manage workloads.  The remaining $450,000 went to American University in partnership with the National Legal Aid and Defender Association to conduct a nationwide self-assessment evaluating whether state and local indigent defense providers comply with standards incorporated into the American Bar Association’s Ten Principles, producing the first national empirical assessment of quality of indigent defense services. 

Through its Encouraging Innovation:  Field Initiated Programs, BJA awarded a total of $619,700 to the San Francisco Public Defender’s Office ($395,231) to create the first local and nationally applicable checklist system to better guide attorneys through key moments in cases, ensuring competent representation and avoiding costly errors, and to NACDL ($224,469) to develop pretrial release manuals for the defense bar and to provide onsite training and distance learning to give attorneys the necessary tools to engage in effective bail advocacy.

The remaining $1.9 million of BJA’s awarded $5.4 million was provided through the Tribal Civil and Criminal Legal Assistance Initiative, designed to improve access to tribal justice systems and strengthen representation of indigent defendants in civil causes of action and in criminal cases under Indian tribes’ jurisdiction.  Of the $1.9 million, the Tulalip Foundation received $262,943 to provide regional, direct legal services to tribal members and $121,779 to create a Criminal Conflict Counsel Program to train defense counsel and provide services to resolve cases.  The Native American Rights Fund received $715,944 to continue its partnership with the National American Indian Legal Association and its 25 Indian Legal Services organizations providing civil legal representation to tribes and tribal members, and a second award of $515,940 to provide indigent defense services to tribes and tribal members.  The William Mitchell College of Law received $283,394 to provide direct criminal defense services and legal assistance to up to seven tribes.

OJJDP made two FY 2013 awards, totaling more than $1 million, to the National Juvenile Defender Center in the District of Columbia in order to improve juvenile indigent defense across the nation.  The first award, in the amount of $400,000, will provide juvenile defense counsel with customized technical assistance, training, and resources for policy development and reform.  The second award, in the amount of $695,000, will support the Juvenile Indigent Defense Special Initiative to reduce the overrepresentation of minority youth in the juvenile justice system and to improve access to counsel and quality of representation for youth with unique needs, including lesbian, gay, bisexual and transgender youth and those with disabilities, substance abuse behaviors and language access needs. 

In FY 2013, NIJ awarded $334,000 to the RAND Corp. in Pittsburgh, Pa., for an empirical evaluation of the holistic approach to individual defense, which includes the defense attorney as one member of an interdisciplinary team providing comprehensive services to address defendants’ legal and social needs.  The study will examine the effect of holistic defense on case outcomes such as plea status, verdict and sentence and disposition length and estimate the effectiveness of the holistic approach for subgroups of offenses or defendants. 

 More information about the Justice Department’s Access to Justice Initiative, which works to strengthen and improve legal services for disadvantaged groups, is available at www.usdoj.gov/atj.

 OJP, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims.  OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking.  More information about OJP can be found at www.ojp.gov.

U.S. District Court Judge S. Thomas Anderson sentenced Terrence Yarbrough, aka “T-Rex,” 38, of Memphis, Tenn., to serve 536 months in prison, the Justice Department announced today. A jury convicted Yarbrough on Dec. 5, 2012 of 10 counts of sex trafficking and one count of conspiracy to commit food stamp fraud.

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

“Today’s sentence of 536 months in prison ensures Terrence Yarbrough, a ruthless predator who inflicted unspeakable physical and emotional harm upon vulnerable young women, will be held accountable for his depraved acts,” said Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee. “We will continue to prosecute those who engage in such reprehensible conduct of coercion and exploitation.”

During the trial, victims recounted a series of violent acts perpetrated by Yarbrough to coerce them into prostituting for him, including being beat with belts, wooden coat hangers, crowbars, padlocks and dog chains; being thrown down stairs; having their heads smashed in car doors; having their legs burned with irons; and being scalded with boiling water.

“The horrific physical violence, sexual abuse, and emotional torment suffered by the victims in this case cannot be undone, but this sentence ensures that their violent and evil predator will face the consequences of his actions,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation.  “The efforts of the FBI and our law enforcement partners have removed a human trafficker from our streets.  We will continue to work together to aggressively pursue and bring to justice those who cruelly exploit others for profit, and to restore the rights and dignity of human trafficking victims.”

“ The USDA-Office of Inspector General is committed to the investigation and prosecution of those individuals who fraudulently obtain food stamp benefits,” said Karen Citizen-Wilcox, Special Agent in Charge of the Southeast Region for the U.S. Department of Agriculture’s Office of the Inspector General.  “We are very pleased we were able to work with the U.S. Attorney's Office and other law enforcement agencies in this case .”

Evidence presented at trial included the testimony of 10 victims identified in the indictment as well as several eyewitnesses. Numerous witnesses testified that Yarbrough repeatedly lured vulnerable victims, some as young as 15 years old, into prostitution with false promises of love, family and prosperity. The evidence showed that any time a victim refused to engage in prostitution, Yarbrough resorted to threats, intimidation and violence.  The jury heard testimony that Yarbrough’s pattern of recruitment, exploitation, and violent coercion continued for years before his 2009 arrest in St. Louis.

One victim testified that Yarbrough forced her to engage in prostitution the entire time she was pregnant with his child and that he frequently beat her on the stomach when she did not want to comply with his demands. He induced labor through a severe beating in her eighth month of pregnancy, during which time he also had her working as a prostitute in Tunica, Miss. Yarbrough drove her back to Memphis, dropped her off at a hospital, and forced her to resume prostituting the day after her release. At a later date, Yarbrough smashed her on the head with a lamp and kicked out her front teeth when she tried to stop prostituting for him.

Another victim testified that Yarbrough lured her into prostitution by promising to reunite her with their children, then beat her severely when she insisted on seeing them and refused to continue working, punching her in the face so hard that he broke three of her teeth. On another occasion, he beat her knees with a metal pipe, causing injuries that continue to affect her. She also testified that Yarbrough threatened to prostitute their nine-year-old daughter.

Further testimony showed that a victim slept through a phone call from a client after prostituting for days on end with almost no sleep, and that when Yarbrough found out that she had missed the call, he smashed her head into a car door, dragged her by the hair to his hotel room and beat her with his belt. Jurors also saw a letter addressed to the same victim and signed by Yarbrough stating that he was proud she did not scream during the aforementioned beating.

Witnesses testified that as a warning, Yarbrough bragged about his beatings of some victims to other victims. Jurors also saw the “T-Rex” logos Yarbrough tattooed on four separate victims, and heard that he claimed that they had been “branded” as his property. Testimony and jail recordings showed that Yarbrough confiscated his victims’ identification documents and money to make it difficult for them to escape. 

Jurors also heard testimony that Yarbrough conspired with his mother, Norma Yarbrough Webb, 66, and Michelle Johnson, 41, to fraudulently obtain food stamp benefits while Yarbrough was incarcerated. Johnson and Webb previously pled guilty to related charges.

The case was investigated by the FBI and the U.S. Department of Agriculture Office of the Inspector General, with assistance from the St. Louis Police Department. Assistant U.S. Attorney Jonathan Skrmetti and Trial Attorney Benjamin J. Hawk of the United States Department of Justice Civil Rights Division’s Human Trafficking Prosecution Unit prosecuted the case.

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank)   has entered into an agreement with the Department of Justice to pay a $325 million penalty to resolve violations arising from Rabobank’s submissions for the London InterBank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (Euribor), which are leading benchmark interest rates around the world, the Justice Department announced today. 

A criminal information will be filed today in U.S. District Court for the District of Connecticut that charges Rabobank as part of a deferred prosecution agreement (DPA).  The information charges Rabobank with wire fraud for its role in manipulating the benchmark interest rates LIBOR and Euribor.  In addition to the $325 million penalty, the DPA requires the bank to admit and accept responsibility for its misconduct as described in an extensive statement of facts.  Rabobank has agreed to continue cooperating with the Justice Department in its ongoing investigation of the manipulation of benchmark interest rates by other financial institutions and individuals.  

“For years, employees at Rabobank, often working with traders at other banks around the globe, illegally manipulated four different interest rates – Euribor and LIBOR for the U.S. dollar, the yen, and the pound sterling – in the hopes of fraudulently moving the market to generate profits for their traders at the expense of the bank’s counterparties,” said Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.  “Today’s criminal resolution – which represents the second-largest penalty in the Criminal Division’s active, ongoing investigation of the manipulation of global benchmark interest rates by some of the largest banks in the world – comes fast on the heels of charges brought against three former ICAP brokers just last month.  Rabobank is the fourth major financial institution that has admitted its misconduct in this wide-ranging criminal investigation, and other banks should pay attention: our investigation is far from over.”

“Rabobank rigged multiple benchmark rates, allowing its traders to reap higher profits at the expense of their unsuspecting counterparties,” said Deputy Assistant Attorney General Leslie C. Overton of the Justice Department’s Antitrust Division.  “Not only was this conduct fraudulent, it compromised the integrity of globally-used interest rate benchmarks – undermining financial markets worldwide.”

“Rabobank admitted to manipulating LIBOR and Euribor submissions which directly affected the rates referenced by financial products held by and on behalf of companies and investors around the world,” said Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office.  “Rabobank’s actions resulted in the deliberate harm to counterparties holding products referencing the manipulated rates.  Today’s announcement is yet another example of the tireless efforts of the FBI special agents and forensic accountants who are dedicated to investigating complex fraud schemes and, together with prosecutors, bringing to justice those who participate in such schemes.”

Together with approximately $740 million in criminal and regulatory penalties imposed by other agencies in actions arising out of the same conduct – $475 million by the Commodity Futures Trading Commission (CFTC) action, $170 million by the U.K. Financial Conduct Authority (FCA) action and approximately $96 million by the Openbaar Ministerie (the Dutch Public Prosecution Service) – the Justice Department’s $325 million criminal penalty brings the total amount to be paid by Rabobank to more than $1 billion.   

According to signed documents, LIBOR is an average interest rate, calculated based upon submissions from leading banks around the world and 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.  From at least 2005 through 2011, Rabobank was a member of the Contributor Panel for a number of currencies, including United States dollar (dollar) LIBOR, pound sterling LIBOR, and yen LIBOR. 

The Euro Interbank Offered Rate (Euribor) is published by the European Banking Federation (EBF), which is based in Brussels, Belgium, and is calculated at 15 maturities, ranging from overnight to one year.  Euribor is the rate at which Euro interbank term deposits within the Euro zone are expected to be offered by one prime bank to another at 11:00 a.m. Brussels time.  The Euribor at a given maturity is the result of a calculation based upon submissions from Euribor Contributor Panel banks.  From at least 2005 through 2011, Rabobank was also a member of the Contributor Panel for Euribor. 

According to the statement of facts accompanying the agreement, from as early as 2005 through at least November 2010, certain Rabobank derivatives traders requested that certain Rabobank dollar LIBOR, yen LIBOR, pound sterling LIBOR, and Euribor submitters submit LIBOR and Euribor contributions that would benefit the traders’ trading positions, rather than rates that complied with the definitions of LIBOR and Euribor. 

In addition, according to the statement of facts accompanying the agreement, from as early as January 2006 through October 2008, a Rabobank yen LIBOR submitter and a Rabobank Euribor submitter had two separate agreements with traders at other banks to make yen LIBOR and Euribor submissions that benefitted trading positions, rather than submissions that complied with the definitions of LIBOR and Euribor.

The Rabobank LIBOR and Euribor submitters accommodated traders’ requests on numerous occasions, and on various occasions, Rabobank’s submissions affected the fixed rates.

According to the statement of facts, Rabobank employees engaged in this conduct through electronic communications, which included both emails and electronic chats.  For example, on Sept. 21, 2007, a Rabobank Yen derivatives trader emailed the Rabobank Yen LIBOR submitter at the time with the subject line “libors,” writing: “Wehre do you think today’s libors are?  If you can, I would like 1mth libors higher today.”  The submitter replied: “Bookies reckon 1m sets at .85.”  The trader wrote back: “I have some fixings in 1 mth so would appreciate if you can put it higher mate.”  The submitter replied: “No prob mate let me know your level.”  The trader responded: “Wud be nice if you could put 0.90% for 1mth cheers.”  The submitter wrote back: “Sure no prob. I’ll probably get a few phone calls but no worries mate!”  The trader replied: “If you may get a few phone calls then put 0.88% then.”  The submitter responded: “Don’t worry mate – there’s bigger crooks in the market than us guys!”  That day, as requested, Rabobank’s 1-month Yen LIBOR submission was 0.90, an increase of seven basis points from its previous submission, whereas the other panel banks’ submissions decreased by approximately a half of a basis point on average.  Rabobank’s submission went from being tied as the tenth highest submission on the Contributor Panel on the previous day to being the highest submission on the Contributor Panel.

On Nov. 29, 2006, a Rabobank dollar derivatives trader wrote to Rabobank’s Global Head of Liquidity and Finance and the head of Rabobank’s money markets desk in London, who supervised rate submitters: “Hi mate, low 1s high 3s LIBOR pls !!! Don't tell [another Rabobank U.S. Dollar derivatives trader] haa haaaaaaa.  Sold the market today doooooohhhh!”  The money markets desk head replied: “ok mate , will do my best …speak later.”  After the LIBOR submissions that day, Rabobank’s ranking compared to other panel banks dropped as to 1-month dollar LIBOR and rose as to 3-month dollar LIBOR. Two days later, on Dec. 1, 2006, the trader again wrote to the money markets desk head: “Appreciate 3s go down, but a high 3s today would be nice… cheers chief.”  The money markets desk head wrote back: “I am fast turning into your LIBOR bitch!!!!”  The trader replied: “Just friendly encouragement that’s all , appreciate the help.”  The money markets desk head wrote back: “No worries mate , glad to help ….We just stuffed ourselves with good ol pie , mash n licker !!”

In an example of an agreement with traders at other banks, on July 28, 2006, a Rabobank rate submitter and Rabobank trader discussed their mutual desires for a high fixing.  The submitter stated to the trader: “setting a high 1m again today - I need it!” to which the trader responded: “yes pls mate…I need a higher 1m libor too.”  Within approximately 20 minutes, the submitter contacted a trader at another Contributor Panel bank and wrote: “morning skipper.....will be setting an obscenely high 1m again today...poss 38 just fyi.”  The other bank’s trader responded, “(K)...oh dear..my poor customers....hehehe!! manual input libors again today then!!!!”  Both banks’ submissions on July 28 moved up one basis point, from 0.37 to 0.38, a move which placed their submissions as the second highest submissions on the Contributor Panel that day.

As another example, on July 7, 2009, a Rabobank trader wrote to a former Rabobank yen LIBOR submitter: “looks like some ppl are talking with each other when they put libors down. . . quite surprised that 3m libors came down a lot.”  The former submitter replied: “yes deffinite manipulation – always is tho to be honest mate. . . i always used to ask if anyone needed a favour and vise versa. . . . a little unethical but always helps to have friends in mrkt.”

By entering into a DPA with Rabobank, the Justice Department took several factors into consideration, including that Rabobank has no history of similar misconduct and has not been the subject of any criminal enforcement actions or any significant regulatory enforcement actions by any authority in the United States, the Netherlands, or elsewhere.  In addition, Rabobank has significantly expanded and enhanced its legal and regulatory compliance program and has taken extensive steps to remediate the misconduct.  Significant remedies and sanctions are also being imposed on Rabobank by several regulators and an additional criminal law enforcement agency (the Dutch Public Prosecution Service). 

This ongoing investigation is being conducted by special agents, forensic accountants, and intelligence analysts of the FBI’s Washington Field Office.  The prosecution of Rabobank is being handled by Assistant Chief Glenn S. Leon and Trial Attorney Alexander H. Berlin of the Criminal Division’s Fraud Section and Trial Attorneys Ludovic C. Ghesquiere, Michael T. Koenig and Eric L. Schleef of the Antitrust Division.  Deputy Chiefs Daniel Braun and William Stellmach of the Criminal Division’s Fraud Section, Criminal Division Senior Counsel Rebecca Rohr, Assistant Chief Elizabeth B. Prewitt and Trial Attorney Richard A. Powers of the Antitrust Division’s New York Office, and Assistant U.S. Attorneys Eric Glover and Liam Brennan of the U.S. Attorney’s Office for the District of Connecticut, along with Criminal Division’s Office of International Affairs, have provided valuable assistance in this matter.  
 
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.  The department has also worked closely with the Dutch Public Prosecution Service and De Nederlandsche Bank (the Dutch Central Bank) in the investigation of Rabobank.  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.

Related Materials:

Deferred Prosecution Agreement
Statement of Fact

The owners and supervisor of Alpha Ambulance Inc. (Alpha), a now-defunct Los Angeles-area ambulance transportation company, have pleaded guilty in connection with an ambulance fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.

Alex Kapri, aka Alex Kapriyelov or Alexander Kapriyelov, 56; Aleksey Muratov, aka Russ Muratov, 32; and Danielle Hartsell Medina, 36, pleaded guilty on Oct. 28, 2013, before U.S. District Court Judge Audrey B. Collins in the Central District of California to conspiracy to commit health care fraud.  They face a maximum penalty of 10 years in prison when they are sentenced on Feb. 24, 2014. 

Kapri and Muratov were owners and operators of Alpha, an ambulance transportation company that operated in the greater Los Angeles area and that specialized in the provision of non-emergency ambulance transportation services to Medicare-eligible beneficiaries, primarily dialysis patients.  Medina was employed by Alpha and ultimately supervised the training and education of its employees. 

According to court documents, Kapri, Muratov and Medina knowingly provided non-emergency ambulance transportation services to Medicare beneficiaries whose medical condition at that time did not require those services.  With Kapri’s knowledge, Muratov and Medina instructed certain Alpha employees to conceal the Medicare beneficiaries’ medical conditions by altering requisite paperwork and creating fraudulent reasons that justified, on paper, the transportation services.  Based on these medically unnecessary transportation services, the defendants caused Alpha to submit false and fraudulent claims to Medicare. 

Additionally, as the defendants were submitting false and fraudulent claims to Medicare, Medicare notified Alpha the company would be subject to a Medicare audit.  In response to this notice, Muratov and Medina instructed Alpha employees – with Kapri’s knowledge – to alter requisite paperwork and create fraudulent reasons that justified, on paper, transportation services for the beneficiaries identified as the subject of Medicare’s audit. 

From at least June 2008 through at least July 2012, Alpha submitted more than $49 million in claims for ambulance transportation services.  As a result, Medicare paid Alpha more than $13 million for these claims, many of which were false and fraudulent. 

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 Central District of California.  This case was prosecuted by Trial Attorneys Blanca Quintero and Alexander F. Porter and Assistant Chief O. Benton Curtis III. 
                       
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $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. 

A Massachusetts man was sentenced to serve 30 months in prison today for engaging in an illegal practice known as “swatting,” in which he made hoax emergency telephone calls reporting an ongoing, dangerous crime to elicit an armed police response from a SWAT team to a specific location, typically in order to harass someone he believed was at the location.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Carmen M. Ortiz of the District of Massachusetts made the announcement after sentencing by U.S. District Court Judge Timothy Hillman. 

Nathan Hanshaw, 22, of Athol, Mass., pleaded guilty on Aug. 30, 2013, to a three-count information charging him with one count of making interstate threats, one count of threats to use explosives and one count of threats to use a firearm.

According court records, Hanshaw typically claimed in his swatting calls that he was a fugitive who was wanted by the authorities; that he was armed with weapons, explosives and nerve agents; and that he had taken hostages.  He demanded cash and a helicopter ride to Mexico and threatened to detonate his bombs and kill his hostages if his demands were not met.  He also threatened to kill any law enforcement personnel who arrived at the location.  Hanshaw generally claimed to be, and, because he used techniques to disguise his location, appeared to be, calling from an address that, unbeknownst to the law enforcement officers responding to the call, was the address of his intended swatting victim.

At the change of plea hearing in August, prosecutors told the court that, had the case proceeded to trial, the government would have proven that, from September 2012 through mid-January 2013, Hanshaw made swatting calls to emergency services numbers across the United States, including Denver; Ventura, Calif.; and Waverly, N.Y.  In each case, armed police responses ensued.  In response to Hanshaw’s swatting call to Ventura, for example, more than 40 local and federal officers arrived at the purported crime scene, a hotel was evacuated, and nearby streets were closed for several hours.  His activities created a serious risk of physical harm to innocent victims and caused extensive disruptions to important public services.

The case was investigated by the FBI and is being prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the District of Massachusetts’ Computer Crimes Unit.

The Justice Department announced today that, jointly with the Commonwealth of Puerto Rico, it is moving in the U.S. District Court for the appointment of Juan Mattos Jr. as Technical Compliance Advisor (TCA).  Mattos will be responsible for evaluating the implementation of a comprehensive settlement agreement to reform the Puerto Rico Police Department (PRPD).  He will begin his term as TCA pursuant to appointment by U.S. District Court Judge Gustavo A. Gelpí.

Under the agreement, the TCA will assist in determining whether the terms of the reform plan have been fully implemented in a timely manner.  The TCA’s assessment will include a thorough review of PRPD’s policies, training curricula, standard operating procedures, plans, protocols and other operational documents related to the agreement.  The TCA will also assess whether the implementation of the agreement results in constitutional policing, increased community trust and the professional treatment of individuals by PRPD officers. To this end, the TCA will engage community stakeholders including representatives of civic and community organizations, minority communities, lesbian, bisexual, gay, transgender and transsexual communities, student and labor groups, civil rights organizations, and women’s advocacy groups to ensure they have a voice in the reform process. The TCA will also assess and report on PRPD’s compliance, as well as provide technical assistance to promote constitutional policing. Once appointed, Mattos will assist PRPD officials with the development of action plans to modernize its administrative systems and professionalize its police force.

The parties jointly selected Mattos to serve as TCA given his extensive experience in law enforcement and his efforts in the successful implementation of a federal consent decree. Mattos is a career law enforcement officer with nearly 40 years of service in the New Jersey State Police (NJSP) and the United States Marshals Service. During his tenure with the NJSP, Mattos served as a state trooper, an equal employment opportunity/affirmative action officer, as Commandant of the NJSP Academy and as Commander of both the Division Staff and Intelligence Services Sections. Mattos also actively supervised the efforts of the NJSP to comply with a 1999 consent decree related to racial profiling. Under his leadership, the NJSP received national recognition for its patrol practices and procedures. Following his retirement from the NJSP, Mattos joined the Middlesex County Prosecutor’s Office where he oversaw the development of policies and procedures for the office’s Bias Crime Unit and established a community outreach initiative with minority community leaders and advocacy groups in Middlesex County. Currently, Mattos serves as the U.S. Marshal for the District of New Jersey, having been appointed to the position by President Obama in July 2011. Mattos intends to hire several other experienced law enforcement professionals to assist him in assessing compliance with the agreement.

“We are pleased to have worked collaboratively with the Commonwealth to select Mr. Mattos, who we believe is uniquely positioned to assess and report on the Puerto Rico Police Department’s reform efforts,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “We look forward to working with Mr. Mattos, the Commonwealth of Puerto Rico and the community to ensure effective and constitutional policing throughout the commonwealth.”

A copy of the complaint, the final agreement and the September 2011 letter of findings can be found at www.justice.gov/crt If individuals have information that is relevant to the case and PRPD, you may contact the Department of Justice at community.prpd@usdoj.gov or at 877-871-9726.

The Civil Rights Division and U.S. Attorney Carmen M. Ortiz announced today the filing of a complaint alleging that the Iron Workers District Council of New England Pension Fund (the Pension Fund) and the Trustees of the Iron Workers District Council of New England Pension Fund (the Trustees) willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to credit U.S. Navy Reserve Member Thomas Shea, a member of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local 7 (the Union), with service time while he was serving in the armed forces in Afghanistan.  The suit was filed in the Federal District Court for the District of Massachusetts.

USERRA requires that service members who leave their civilian jobs to serve in the military be treated as not having incurred a break in service with regard to their pension plans.  USERRA further provides that each period served by a person in the uniformed services shall upon reemployment be deemed to constitute service with the employer(s) maintaining the plan for the purpose of determining the nonforfeitabilty of the person's accrued benefits and for the purpose of determining the accrual of benefits under the plan.

The complaint alleges that the Pension Fund and the trustees violated USERRA by refusing to grant Shea pension credits that he earned while on military duty unless and until he worked at least 300 hours in the one year period following his discharge from the military and accrued 2.5 pension credits, which is equal to 3,000 hours, in the subsequent five year period following his release from active duty.  Both of these requirements exceed those placed on members of the Pension Fund who do not take military leave and therefore violate USERRA.  The complaint also seeks back payment of annuity contributions that were not made while Shea was on active duty.

“Congress enacted USERRA to protect our men and women in uniform from experiencing exactly this kind of injustice,” said Jocelyn Samuels, Acting Assistant Attorney General for the Department of Justice’s Civil Rights Division.  “The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our service members.”

“Reservists who are called to active duty sacrifice time away from their jobs to serve their country,” said Ortiz.  “USERRA ensures that they are not discriminated against after they have returned from service and that their employment rights are protected.  We are committed to vigorously enforcing USERRA’s protections.”

"It is important for all employers and their organizations to realize that the Labor Department is here to protect the employment and reemployment rights of American service members under USERRA," said Assistant Secretary Keith Kelly of the Veterans' Employment and Training Service.  "We owe these brave Americans every protection when they return from their military obligations."

The U.S. Department of Labor’s (DOL) Veterans’ Employment and Training Service investigated Shea’s allegations with the assistance of the DOL’s Office of Regional Solicitor.  This case is being handled jointly by the Civil Rights Division and the U.S. Attorney’s Office for the District of Massachusetts.

Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.

Holly Springs Tax Preparers Allegedly File Fraudulent Tax Returns for Customers

The United States has sued Eric Hardaway, aka Eric Brittenum, and Yvonne Hardaway, seeking to bar them and their business, Hardaway Taxx, from preparing federal tax returns for others, the Justice Department announced today.

The civil injunction complaint, filed in U.S. District Court for the Northern District of Mississippi, alleges that the Hardaways, of Holly Springs, Miss., have prepared federal income tax returns for customers that fraudulently understated their tax liabilities or overstated refunds by claiming frivolous fuel tax credits.  According to the complaint, an Internal Revenue Service (IRS) investigation revealed that 156 income tax returns prepared by the Hardaways and audited by the IRS resulted in tax deficiencies.  The lawsuit alleges that the tax harm caused by the Hardaways’ misconduct exceeds $321,000 in erroneous refunds issued to taxpayers.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 .  The IRS has tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional .  In the past ten years, the Justice Department's Tax Division has obtained injunctions against hundreds of unscrupulous tax-return preparers.  Information about these cases is available on the Justice Department Website at www.justice.gov/tax/taxpress2013.htm .

Related Materials:

United States v. Eric Hardaway, etc. et al.
Complaint for Permanent Injunction and Other Relief
 

A Rockford, Ill., man was arrested today in connection with an indictment charging three Chicago-area residents for their roles in an alleged $12 million health care fraud scheme. 

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Zachary Fardon of the Northern District of Illinois, Acting Special Agent in Charge Robert J. Shields Jr. of the FBI’s Chicago Office, and Special Agent in Charge Lamont Pugh III of the Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.

According to the 10-count indictment returned on Oct. 23, 2013, and unsealed today, Rick E. Brown, 56, and two other individuals allegedly participated in a Medicare fraud scheme operating out of a home visiting physician practice, Medicall Physicians Group Ltd., in Schaumburg, Ill., that billed for services that Medicall never provided.  Medicare allegedly paid the company approximately $4.7 million for fraudulently reported services from January 2007 to December 2011.

Brown and an alleged co-conspirator, Roger A. Lucero, 62, of Elmhurst, Ill., are charged with conspiracy to commit health care fraud and health care fraud.  The two men and another defendant, Mary C. Talaga, 53, of Elmwood Park, Ill., are also charged with making false statements relating to health care matters. 

According to the indictment, Lucero and Brown owned and operated Medicall, and Talaga submitted the company’s bills to Medicare.  The indictment alleges that Brown instructed employees to bill Medicare for patient oversight and other services that were never provided, and Lucero created backdated records in an effort to conceal the fraudulent billings.  Talaga is alleged to have billed Medicare for these services even though she knew they had not been documented, a practice that required her to fabricate the information submitted to Medicare.

The charges of health care fraud conspiracy and health care fraud each carry a maximum potential penalty of 10 years in prison and a $250,000 fine.  The charges of false statements relating to health care matters carry a maximum potential penalty of five years in prison and a $250,000 fine.

An indictment is merely a charge and defendants are presumed innocent unless and until proven guilty.

The investigation is being conducted jointly by the FBI and HHS-OIG and 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 Northern District of Illinois.  The case is being prosecuted by Trial Attorney Brooke Harper 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 1,500 defendants who have collectively billed the Medicare program for more than $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.

United States Attorney Alicia A.G. Limtiaco, announced today that after undergoing a six-week curriculum taught by Gang Resistance Education And Training (G.R.E.A.T.) officers, over 75 fifth grade students at P.C. Lujan Elementary School will be receiving their certificates of completion on Wednesday, October 30, 2013, at 9:00 A.M., in the school's cafeteria.

Parents are invited and highly encouraged to attend and participate alongside our students, in the graduation. 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 providing life skills to help students avoid delinquent behavior and violence to solve problems.

Mr. Jon Fernandez, Guam Department of Education Superintendent and Barrigada Mayor June U. Blas have also been invited to attend.

U.S. Attorney Limtiaco stated, AWe praise the hard work, motivation and significant accomplishments of our students in completing the G.R.E.A.T. Program, and the continued commitment and dedication of the G.R.E.A.T. instructors to our youth in taking the G.R.E.A.T. message to our schools in Guam.

Anyone interested in learning more about the program can log on to www.great-online.org.

A former U.S. Army Sergeant and a co-conspirator have been sentenced in the District of Colorado for their roles in stealing fuel at Forward Operating Base (FOB) Fenty, Afghanistan, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division announced.  

U.S. Army Sergeant Christopher Weaver, 30, of Fort Carson, Colo., was sentenced on Oct. 28, 2013, to serve 37 months in prison.  Weaver pleaded guilty Oct. 20, 2012, and was sentenced by U.S. District Court Judge Marcia S. Krieger.                     

Jonathan Hightower, 31, of Houston, Texas, who worked at FOB Fenty as a civilian employee of a contractor and who had conspired with Weaver, was also sentenced on Oct. 28, 2013, to serve 27 months in prison. He pleaded guilty Aug. 3, 2012, and was sentenced by U.S. District Court Judge William J. Martinez.

A third conspirator, former soldier Stephanie Charboneau, pleaded guilty on Sept. 5, 2013, before U.S. District Court Judge Philip A. Brimmer.  Her sentencing is set for Dec. 9, 2013.

Weaver and Hightower were also ordered to pay $1,225,000 in restitution, jointly with Charboneau.  Hightower was also ordered to pay $400,000 in restitution for a related fuel theft scheme that was the subject of the prosecution.

According to court documents, from in or about January 2010 through June 2010, Weaver, Hightower and Charboneau were involved in handling the uploading and transportation of fuel from FOB Fenty, near Jalalabad, Afghanistan, to nearby military bases.  Weaver and Charboneau created false and fraudulent documents purporting to authorize the transport of fuel from FOB Fenty to other military bases, even though no legitimate fuel transportation was required.  Hightower was a civilian who worked at the base’s “fuel point” uploading fuel trucks, occasionally filling the trucks with fuel to be stolen and taking other steps to assist the conspiracy.  At the direction of Weaver and Charboneau, fuel truck drivers used the fraudulent documents to justify the filled trucks’ departures from FOB Fenty.  In truth, after the filled fuel truck left the base, the fuel was simply stolen, and Weaver and Charboneau would receive cash from the representative of the trucking company that supplied the fuel trucks.  The cash would be split among the three conspirators.     
 
All three conspirators pleaded guilty to receiving payments from a representative of the trucking company in exchange for facilitating the theft of approximately 70 5,000-gallon truckloads of fuel.  Each of the three acknowledged that the loss to the United States was in excess of $1 million.

The cases were investigated by the Special Inspector General for Afghanistan Reconstruction, the Department of the Army, Criminal Investigations Division (CID); the Defense Criminal Investigative Service; and the FBI.

These cases were handled by Special Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section, who is on detail from the Special Inspector General for Afghanistan Reconstruction (SIGAR). 

The Justice Department announced today that the U.S. District Court of Nevada has approved a settlement in which the owners and operators of Rosewood Park Apartments, a 902 unit apartment complex in Reno, Nev., will pay $167,000 to resolve a lawsuit alleging discrimination against persons with disabilities who use assistance animals.  

Under the agreement, the defendants in United States v. Rosewood Park LLC et al., will pay a total of $127,500 to a family that was not allowed to move into the complex because one of the members of the household used an assistance animal and to the Silver State Fair Housing Council, a non-profit Nevada organization that assisted the family and conducted testing to investigate the rental practices at Rosewood Park.  The defendants will also pay an additional $25,000 to compensate any other persons harmed by the defendants’ discriminatory policies, who are identified through a process established by the agreement, and will pay $15,000 to the government in civil penalties.  The agreement also requires that defendants adopt and maintain a new policy regarding assistance animals, provide non-discrimination training to their employees and agree to record keeping and monitoring requirements for the terms of the agreement.  The agreement has been approved by the U.S. District Court of Nevada, and takes the form of a consent order that can be enforced by the court.

The department’s complaint had alleged that the owners, employees and management company of Rosewood Park Apartments violated the Fair Housing Act by limiting individuals with certain assistance animals to a particular section of Rosewood Park Apartments; subjecting such individuals to pet fees; requiring assistance animals to be licensed or certified; and barring companion or uncertified service dogs altogether.  The case began when a family that had sought housing at Rosewood Park and the Silver State Fair Housing Council filed complaints with the Department of Housing and Urban Development (HUD).   HUD investigated the complaint, issued a charge of discrimination and referred the matter to the Department of Justice.  

“The Fair Housing Act ensures that persons with disabilities searching for a home are protected from discrimination,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “The Justice Department will continue to vigorously protect the civil rights of persons with disabilities in Nevada and across the country.”

“Persons who think they have been discriminated against in housing issues should not hesitate to file a report with HUD,” said U.S. Attorney Bogden.  “The U.S. Attorney’s Office, as part of the U.S. Department of Justice, works with HUD to ensure that companies that are treating disabled persons unfairly are punished, and that they adopt policies to prevent further discrimination.”

“Assistance animals play a vital role in helping people with disabilities conduct everyday activities and fully enjoy their homes,” said Bryan Greene, HUD's Acting Assistant Secretary for Fair Housing and Equal Opportunity.  “HUD and DOJ will continue to enforce the Fair Housing Act's protections and ensure that housing providers do not illegally limit assistance animals.”

Fighting illegal housing discrimination is a top priority of the Justice Department.  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 Justice Department at 1-800-896-7743, e-mail the Justice 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 hwww.justice.gov/crt/housing/ or www.hud.gov/fairhousing .

The Department of Justice announced today that it has reached a settlement with All Battery Sales and Service (ABS) of Everett, Wash., to resolve a lawsuit it filed on behalf of Curtis Kirk, a U.S. Army reservist.  The lawsuit alleged that the company violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by failing to properly reemploy Kirk in September 2010 after he returned from military service in support of Operation Iraqi Freedom.  The lawsuit also alleged that the defendant unlawfully demoted and then terminated Kirk’s employment without proper cause.  If approved by the court, the settlement would resolve the allegations that the defendant violated the reemployment rights of Kirk. 

ABS is a wholesaler, distributor and retailer of battery products, parts and services.  According to the complaint, filed in the U.S. District Court for the Western District of Washington, the defendant violated USERRA by not properly reemploying Kirk in a position as a front counter representative, or in a position with comparable seniority, status and pay.  The defendant reemployed Kirk in a lower status position than the one he held when he left for active duty service, with fewer guaranteed working hours, a less lucrative commission and bonus structure and fewer opportunities for promotion.  ABS later demoted Kirk further and terminated his employment without cause, also in violation of USERRA.                       

Under the terms of the settlement, ABS must pay Kirk $37,500 to compensate him for lost or reduced wages and benefits.  Among other things, the settlement also requires the defendant to provide training to ABS’ high-level officials and human resources staff on the USERRA rights and obligations of employers and covered employees. 

“Employers have a legal obligation to ensure service members get their jobs back when they return from military duty as required by law,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “The Civil Rights Division is committed to protecting the rights of those who, through their courage and sacrifice, secure the rights of all Americans.” 

“Just as our dedicated men and women of the military protect our freedoms overseas, we must protect their interests here at home,” said U.S. Attorney Jenny A. Durkan.  “These soldiers have made many sacrifices, and the loss of a career or the job they are entitled to when they return home cannot be allowed.  The U.S. Attorney’s Office is committed to enforcing the laws that protect the rights of those brave men and women who serve our country proudly.”

Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment been not interrupted by military service or in a position of like seniority, status and pay.  In addition, any individual with Kirk’s length of absence for military service who is reemployed cannot be terminated within one year after the date of full and proper reemployment except for just cause.

The case was litigated by Assistant U.S. Attorney J. Michael Diaz in the U.S. Attorney’s Office for the Western District of Washington, in collaboration with Andrew Braniff, USERRA/USAO Program Coordinator, in the Employment Litigation Section of the Civil Rights Division of the Justice Department. 

The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA.  Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov , as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm .

The former president of Port Arthur Chemical and Environmental Services LLC (PACES) has been sentenced for occupational safety crimes which resulted in the death of an employee, announced Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and John M. Bales, U.S. Attorney for the Eastern District of Texas.

Matthew Lawrence Bowman, 41, of Houston, pleaded guilty on May 9, 2013, to violating the Occupational Safety and Health Act (OSH Act) and making a false statement and was sentenced to serve 12 months in federal prison today by U.S. District Judge Marcia Crone.  Bowman was also ordered to pay fines in the amount of $5,000.  

Bowman admitted to not properly protecting PACES employees from exposure to hydrogen sulfide, a poisonous gas resulting in the death of truck driver Joey Sutter on Dec. 18, 2008.  In addition, Bowman admitted to directing employees to falsify transportation documents to conceal that the wastewater was coming from PACES after a disposal facility put a moratorium on all shipments from PACES after it received loads containing hydrogen sulfide. 

“Today’s sentence is a just punishment for Bowman’s actions, which placed workers at unacceptable risk and had fatal consequences,” said Acting Assistant Attorney General Dreher. “The Justice Department and the U.S. Attorney’s Offices will continue to work with our law enforcement partners to vigorously investigate and prosecute those who violate the laws enacted to ensure the safety of workers handling hazardous materials and to prevent the kind of tragedies that occurred in this case.”

“The government’s prosecution of Matthew Bowman is now complete.  While Mr. Bowman is being held accountable for his criminal conduct, and that is appropriate, there is no amount of time in prison; no amount of criminal fine that can be levied that will compensate for the loss of life at PACES.  We extend our deepest condolences and well wishes to the friends and family of Mr. Sutter, who died pitilessly and needlessly because of the criminally negligent actions of Matthew Bowman,” said U.S. Attorney Bales.  “The agents and prosecutors conducted an outstanding investigation and prosecution.”

"The sentencing today is a clear signal of the U.S. Department of Transportation’s (USDOT), and its Office of Inspector General’s (OIG) commitment to protecting the public from illegally transported hazardous materials,” said Max Smith, regional Special Agent-in-Charge, USDOT OIG.  “Working with our law enforcement and prosecutorial colleagues we will continue our vigorous efforts to prosecute to the fullest extent of the law those who would seek to disregard the Nation’s transportation laws and endanger the public.”

“Environmental violations are serious crimes, and in a worst-case scenario, they can kill people,” said Ivan Vikin, special Agent in Charge of EPA’s criminal enforcement program in Texas.  “In this case, a senior manger’s actions led directly to the death of one of his employees.  This is why we have laws regarding the safe and legal handling of hazardous materials.  Enforcement of these laws must be consistent and uncompromising.”

“When a worker loses his or her life on the job, it has a ripple effect on their families, friends, community and the workplace. Matt Bowman and PACES knowingly violated workplace safety standards that led to Joey Sutter's death,” said OSHA's Deputy Regional Administrator Eric Harbin in Dallas. “OSHA standards are in place to protect workers and employers will be held accountable when they fail to follow these standards.”
According to information presented in court, Bowman was president and owner of PACES, located in Port Arthur, Texas, and CES Environmental Services (CES) located in Houston.  PACES was in operation from November 2008 to November 2010, and was in the business of producing and selling caustic materials to paper mills.  The production of caustic materials involved hydrogen sulfide, a poisonous gas.  According to the National Institute for Occupational Safety and Health, hydrogen sulfide is an acute toxic substance that is the leading cause of sudden death in the workplace.  Employers are required by OSHA to implement engineering and safety controls to prevent employees from exposure above harmful limits of hydrogen sulfide.
  
Bowman was responsible for approving and directing PACES production operations, the disposal of hydrogen sulfide wastewater, and ensuring implementation of employee safety precautions. In some cases, Bowman personally handled the investigation of work-related employee injuries, directed the transportation of PACES wastewater, and determined what safety equipment could be purchased or maintained.  In the cases at issue, hazardous materials were transported illegally with false documents and without the required placards.  Most importantly, the workers were not properly protected from exposure to hazardous gases.  The exposure resulted in the deaths of two employees, Joey Sutter and Charles Sittig, who were truck drivers, at the PACES facility on Dec. 18, 2008 and Apr. 14, 2009.  Placarding is critical to ensure the safety of first responders in the event of an accident or other highway incident.  Bowman and PACES were indicted by a federal grand jury on July 18, 2012. 

This case was investigated by EPA Criminal Investigation Division; the U.S. Department of Transportation Office of Inspector General; the Texas Commission on Environmental Quality - Environmental Crimes Unit, part of the Texas Environmental Enforcement Task Force; the Texas Parks & Wildlife Department - Environmental Crimes Unit; the Houston Police Department - Major Offenders, Environmental Investigations Unit; the Travis County, Texas - District Attorney’s Office; the Harris County, Texas, District Attorney’s Office - Environmental Crimes Division; the Houston Fire Department; OSHA; the U.S. Coast Guard; the Port Arthur Police Department; and the Port Arthur Fire Department.

The case was prosecuted by the U.S. Attorney’s Office for the Eastern District of Texas and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division. 

Former U.S. Congressman Rick Renzi was sentenced today to serve 36 months in prison following his June conviction by a federal jury in Tucson, Ariz., for extortion, bribery, insurance fraud, money laundering and racketeering. Renzi’s co-defendant, James Sandlin, was also sentenced today to serve 18 months in prison for his role in the extortion, bribery and money laundering scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Elizabeth A. Strange of the District of Arizona, Special Agent in Charge Douglas G. Price of the FBI’s Phoenix Division, and Special Agent in Charge Dawn Mertz of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement following sentencing by Senior U.S. District Judge David C. Bury.

Renzi, 55, of Burke, Va., and Sandlin, 62, of Sherman, Texas, were convicted on June 11, 2013. Renzi was found guilty of 17 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right, racketeering, money laundering and making false statements to insurance regulators. Sandlin was convicted of 13 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right and money laundering.

“Mr. Renzi abused the power – and the corresponding trust – that comes with being a member of Congress by putting his own financial interests over the interests of the citizens he had sworn to serve,” said Acting Assistant Attorney General Raman.  “He fleeced his own insurance company to fund his run for Congress, and then exploited his position for personal gain.  Mr. Renzi’s conviction and today’s sentence demonstrate the Justice Department’s commitment to fighting corruption at the highest levels of government.”

“Former Congressman Renzi disregarded his oath to uphold the law, ignoring the interests of the people he was elected to serve in favor of his own interests,” stated First Assistant U.S. Attorney Strange.  “The sentences imposed today reinforce the fundamental principle that no one, including an elected official, is above the law.”

“When our elected officials betray the trust of the American people it strikes at the very core of our democracy,” said FBI Special Agent in Charge Price.  “The sentencing of former Congressman Rick Renzi illustrates the commitment by the FBI and our law enforcement partners to investigate and prosecute corruption at all levels.   Today’s sentencing is a reminder that when a public official violates the public's trust they will be held accountable to the fullest extent of the law.”

“The public expects its elected officials to be honest, to be trustworthy and to show respect for the law," stated IRS Special Agent in Charge Mertz.  “Those in public office should be held to a higher standard and are not exempt from criminal prosecution.  The prison sentence imposed today should serve as a wake-up call to other public officials who believe there are no consequences for betraying the public trust.”

According to evidence at trial, Renzi, then a member of Congress from Arizona’s 1st Congressional District, promised in 2005 to use his legislative influence to profit from a federal land exchange that involved property owned by Sandlin, a real-estate investor.

At the time, Sandlin owed Renzi $700,000 in future payments from their business dealings, and Renzi threatened proponents of the land exchange that he would not support it unless they purchased Sandlin’s property in Cochise County, Ariz.  When they refused, Renzi promised a second proponent of a land exchange that he would support the exchange if they purchased Sandlin’s property.  According to an agreement reached in May 2005, Sandlin was paid $1 million in earnest money, out of which he paid $200,000 to Renzi.  Just before Sandlin received the $1.6 million balance owed on the exchange, he paid an additional $533,000 to Renzi. 

Evidence at trial further showed that from 2001 to 2003, Renzi engaged in insurance fraud by diverting his clients’ insurance premiums to fund his first campaign for Congress, and he subsequently sent false letters to his insurance customers and provided false statements to various state regulators who were investigating his activities.  

This case was investigated by the FBI and the Internal Revenue Service – Criminal Investigation.  The prosecution was handled by Trial Attorneys David Harbach and Sean Mulryne of the Department of Justice’s Public Integrity Section and Assistant U.S. Attorneys Gary Restaino and James Knapp of the District of Arizona.

Nolan L. Agner, the last of five Virginia Beach charter fishing boat captains convicted of poaching Atlantic striped bass was sentenced today in federal court in Norfolk, Va.  All five captains – including Agner, Jeffery S. Adams, Raymond Carroll Webb, David Dwayne Scott, and William W. “Duby” Lowery IV – were sentenced for violating the Lacey Act by selling illegally-harvested striped bass, the Justice Department announced.

“As charter boat captains, these men had an obligation to know and follow the laws that protect this natural resource from overharvesting,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Their illegal poaching of striped bass gave them an unfair economic advantage over law abiding fisherman and irresponsibly posed a threat to this food supply.  “With these sentences, they will pay the price by serving jail time or receiving probation, as well as paying fines, surrendering their captain’s license, or having their operations closely monitored or curtailed.”

In 1984, Congress passed the Atlantic Striped Bass Conservation Act, recognizing that “Atlantic striped bass are of historic commercial and recreational importance and economic benefit to Atlantic coastal States and to the Nation,” and that it “is in the national interest to implement effective procedures and measures to provide for effective inter-jurisdictional conservation and management of this species.”  Since 1990, the Secretary of Commerce has imposed a moratorium on fishing for striped bass within the exclusive economic zone (EEZ), the zone where the U.S. and other coastal nations have jurisdiction over economic and resource management.  The moratorium makes it unlawful to fish for or harvest striped bass in the EEZ.  The moratorium also makes it unlawful to retain any striped bass that were taken in or from the EEZ.

The Lacey Act makes it unlawful for any person to import, export, transport, sell, receive, acquire or purchase any fish or wildlife taken, possessed, transported or sold in violation of any law or regulation of the United States, or to attempt to do so.  Such conduct constitutes a felony crime if the market value of the fish or wildlife is in excess of $350.  Under the Lacey Act, it is a “sale” of fish or wildlife for any person, for money or other consideration, to offer or provide guiding, outfitting, or other services.  

Each of the captains, all of whom operated charters out of Rudee Inlet in Virginia Beach, was charged separately on Nov. 8, 2012, with violating the Lacey Act by selling charter fishing trips to harvest striped bass illegally from the EEZ, among other charges.

Today, Agner, captain of the Flat Line, having previously pleaded guilty to violating the Lacey Act, was sentenced to pay a $3,500 fine.  He and his corporation, Agner, Inc., were also placed on three years’ probation with special conditions requiring them to purchase and maintain a Vessel Monitoring System (VMS) device on any vessel that they own or operate for fishing purposes during the term of probation.
  
The other four defendants all previously pleaded guilty to violating the Lacey Act and have been sentenced:

On, April 25, 2013, Scott, captain of the Stoney’s Kingfisher, was sentenced to a $5,600 fine and $1,900 in restitution to the National Oceanic and Atmospheric Administration (NOAA).  Scott was also sentenced to three years’ probation with special conditions prohibiting Scott from engaging in either the charter or commercial fishing industries, anywhere in the world, in any capacity, during the term of his probation.  Scott is prohibited not only from captaining a vessel, but also rendering any assistance, support, or other services, with or without compensation, for other charter or commercial fishermen. 

Also on April 25, 2013, Adams, captain of the Providence II, and his corporation Adams Fishing Adventures, were sentenced to three years’ probation with special conditions requiring them to apply for and receive a Federal Fisheries permit, and to purchase and install a VMS device on any vessel that they own or operate during the term of probation.

On May 30, 2013, Lowery, captain of the Anna Lynn, was sentenced to 30 days’ in jail, followed by 12 months of supervised release with the special conditions that Lowery surrender his captain’s license to the U.S. Coast Guard and that he not be eligible for reinstatement of that license.  Lowery is also prohibited from engaging in the charter fishing industry in any capacity during the term of his supervised release. 

 On July 2, 2013, Webb, captain of the Spider Webb, and his corporation Peake Enterprises were sentenced to pay a $3,000 fine and $1,000 restitution to NOAA.  Webb and Peake Enterprises were also sentenced to three years’ probation with special conditions requiring them to apply for and receive a Federal Fisheries permit, and to purchase and install a VMS device on any vessel that they own or operate during the term of probation.

This case was investigated by NOAA’s Office of Law Enforcement and the Virginia Marine Police with assistance from the Federal Communications Commission Enforcement Bureau, Norfolk Office.  Assistant U.S. Attorney Stephen W. Haynie of the United States Attorney’s Office for the Eastern District of Virginia and Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section of the Environment and Natural Resources Division prosecuted the case on behalf of the United States.

ALABAMA MAN PLEADS GUILTY TO HIS INVOVLEMENT IN AN
IDENTITY THEFT SCHEME USING STOLEN PRISONER NAMES AND A CORRUPT POSTAL EMPLOYEE

 According to court documents and court proceedings, Harvey James obtained stolen identities from individuals who had access to inmate information from the Alabama Department of Corrections.  For several years, James, his sister, Jacqueline Slaton, and others used those inmate names to file false federal and state tax returns.  James and Slaton directed some of the false refunds to be sent to either prepaid debit cards or issued via check.  In 2012, James and Slaton enlisted the assistance of U.S. Postal Service mail carrier Vernon Harrison in the scheme.  Harrison, who provided James and his co-conspirators with mailing addresses to which they could mail debit cards, retrieved the debit cards from the mail and delivered them to James and his co-conspirators.  In exchange, Harrison received substantial payments.  Between 2010 and 2012, James and his co-conspirators filed hundreds of federal and state income tax returns that claimed over $1,000,000 in fraudulent tax refunds.

 Sentencing has not yet been scheduled.  James faces a minimum sentence of two years in prison and a maximum sentence of twenty-two years in prison, three years of supervised release, restitution and a maximum fine of $250,000.  Slaton already pleaded guilty and was sentenced to 70 months in prison.  In July 2013, Harrison was found guilty by a jury for his role in the scheme.  Harrison will be sentenced on Oct. 31, 2013.

 The case was investigated by Special Agents of the IRS - Criminal Investigation.  Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.

 Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.

Jason W. Pleau, 35, of Providence, R.I., was sentenced today to life in prison for the murder and robbery of Woonsocket, R.I., gas station manager David D. Main.  Pleau chased, shot at close range and robbed Main on Sep. 20, 2010, as Main approached the doorstep of a Woonsocket bank where he was to have deposited receipts belonging to the gas station that he managed.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Peter F. Neronha of the District of Rhode Island; Rhode Island Attorney General Peter F. Kilmartin; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; Woonsocket Police Chief Thomas S. Carey; and Special Agent in Charge Vincent B. Lisi of the FBI’s Boston Field Office made the announcement following sentencing by U.S. District Court Judge William E. Smith.

Pleau pleaded guilty on July 31, 2013, to conspiracy to commit Hobbs Act robbery; Hobbs Act robbery; and carrying, using, and discharging a firearm during and in relation to a federal crime of violence resulting in death. 

Co-defendant Jose A. Santiago, 36, formerly of Springfield, Mass., pleaded guilty on Sep. 5, 2013, to conspiracy to commit Hobbs Act robbery; Hobbs Act robbery; and carrying, using, and discharging a firearm during and in relation to a federal crime of violence resulting in death.  Santiago is scheduled to be sentenced on Jan. 9, 2014.

A third defendant, Kelly Marie Lajoie, 35, formerly of Springfield, Mass., pleaded guilty on Dec. 9, 2011, to Hobbs Act conspiracy, aiding and abetting a Hobbs Act robbery, and use of a firearm during a federal crime of violence.  A sentencing hearing has not been scheduled.

The matter was investigated by the Woonsocket Police Department, Rhode Island State Police and the FBI.

The case was prosecuted by Assistant U.S. Attorneys Adi Goldstein and William J. Ferland of the District of Rhode Island and Trial Attorney Jacabed Rodriguez-Coss of the Criminal Division's Capital Case Section.

The Justice Department today filed a lawsuit against the owner and operators of a Fremont, Calif., apartment complex, alleging that they had discriminated against families with children in violation of the Fair Housing Act by prohibiting children from playing in the common grassy areas of the complex.

“Families with children should have the same ability to enjoy their homes as all other tenants,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.    

The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that the owners and rental staff of Woodland Garden Apartments, a 37 unit apartment complex, adopted and enforced a policy prohibiting children from playing outside in the common grassy areas of the complex.  The complex is owned by Fred Martin and managed by Fatima Rivera, both of whom are named in the suit.  Alfredo Rivera, a former maintenance worker who participated in enforcing the policy, is also named as a defendant in the suit. 

This lawsuit arose as a result of complaints filed with the Department of Housing and Urban Development (HUD) by five families with children who lived at Woodland Garden Apartments, and Project Sentinel, a non-profit organization based in Santa Clara, Calif., that promotes fair housing.  After HUD investigated the complaints, it issued a charge of discrimination and the matter was referred to the Justice Department.

“Housing providers cannot impose more restrictive policies on families with children or evict them simply because their children leave the unit,” said Bryan Greene, HUD Acting Assistant Secretary for Fair Housing and Equal Opportunity.  “HUD and DOJ are committed to enforcing the fair housing rights of all people, including families with children.”

The lawsuit seeks a court order prohibiting future discrimination by the defendant, monetary damages for those harmed by the defendant’s actions and a civil penalty.

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.  Individuals who believe they may have been victims of housing discrimination may contact the Justice Department at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov ., or contact HUD at 1-800-669-9777 or through www.hud.gov/fairhousing .  

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

Dr. Ronald Eugene Jamerson of Schererville, Ind., entered a guilty plea to one count of willfully failing to truthfully account for, collect and pay over employment taxes to the Internal Revenue Service (IRS), the Department of Justice and IRS announced today.  Under the terms of the plea agreement, Jamerson also agreed to pay restitution in the amount of $541,083.20 to the IRS.

On June 20, 2012, Jamerson was indicted on 11 counts of willfully failing to file quarterly employment tax returns (Forms 941) with the IRS and willfully failing to pay over to the IRS the federal income taxes and the Federal Insurance Contributions Act (FICA) taxes due and owing from the second quarter of 2006 through the fourth tax quarter of 2008.  According to the indictment and other court pleadings, Jamerson, an ear, nose and throat surgeon who opened his own medical practice in the late 1990s, deducted and collected from his employees’ paychecks federal income taxes and FICA taxes, but he failed to file the employment tax returns and related employment taxes from 2003 through 2008.  In the plea agreement, Jamerson agrees that the total tax loss based on his failure to report and pay employment taxes is $541,083.20.

Sentencing is scheduled for Jan. 24. 2014. Jamerson faces a maximum penalty of five years in prison, three years of supervised release and a maximum fine of $250,000.

The case was investigated by Special Agents from IRS - Criminal Investigation and prosecuted by Justice Department Trial Attorneys Erin S. Mellen and Chris J. Maietta, with valuable support from the United States Attorney’s Office in Hammond, Indiana.

David Ostermeyer, who retired from the U.S. Agency for International Development (USAID) in 2012, will pay the government a $30,000 penalty to settle allegations that he participated in a matter in which he had a financial interest that conflicted with his duties when he was Chief Financial Officer of the agency, the Justice Department announced today. 

 
“We expect government officials to earn and maintain the trust of taxpayers by acting with the highest integrity,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “This requires, at a minimum, that they do their work free of prohibited conflicts of interest.  The Justice Department will pursue those who violate their ethical obligations.” 

The government alleged that shortly before Ostermeyer retired from USAID, he helped the agency draft a contract solicitation for a senior advisor – a position that Ostermeyer intended to apply for after he retired .  In an effort to ensure he would be awarded the position, Ostermeyer allegedly tailored the solicitation to his specific skills and experiences. 

 
Federal conflict of interest laws prohibit executive branch employees from participating personally and substantially in matters in which they have a financial interest.  Since Ostermeyer had a financial interest in the contract solicitation, the government alleged that he could not participate in drafting it and, therefore, violated 18 U.S.C. § 208(a).

 
“To maintain public trust in our institutions, it is vital that those in government adhere to the highest standards of integrity,” said Michael Carroll, Acting Inspector General for USAID.  “The exceptional work of the investigators and attorneys on this case reflects our resolve to uphold these standards.”

This settlement was the result of a coordinated effort by the Justice Department’s Civil Division and USAID’s Office of Inspector General.  The claims resolved by this settlement are allegations only; there has been no determination of liability.   

An indictment was unsealed today charging Dominick Pannitti, formerly of North Bellmore, N.Y., with tax crimes, the Justice Department announced.

According to the indictment, which was returned by a grand jury on Sept. 26, 2013, Pannitti was Head of Operations at a securities brokerage firm in Syosset, N.Y.  The securities firm had an automated system designed to adjust customers’ trading accounts for amounts less than $1,000.  During 2005 and 2006, Pannitti used the automated system to credit his own trading accounts hundreds of times in increments less than $1,000.  Pannitti was not entitled to most of these credits, which totaled over $570,000.  Pannitti concealed from his accountant the income he obtained and failed to report the income on his tax returns. 

A trial date has not been scheduled.  An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.  Pannitti faces a potential maximum sentence of eight years in prison and a potential fine of up to $500,000.

The case was investigated by the Internal Revenue Service (IRS) - Criminal Investigation and the FBI.  The case is being prosecuted by Trial Attorneys Mark Kotila and Jeffrey Bender of the Justice Department’s Tax Division.

Harvey James pleaded guilty to one count of mail fraud and one count of aggravated identity theft for his role in a Stolen Identity Refund Fraud (“SIRF”) scheme , announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.

According to court documents and court proceedings, Harvey James obtained stolen identities from individuals who had access to inmate information from the Alabama Department of Corrections.  For several years, James, his sister, Jacqueline Slaton, and others used those inmate names to file false federal and state tax returns.  James and Slaton directed some of the false refunds to be sent to either prepaid debit cards or issued via check.  In 2012, James and Slaton enlisted the assistance of U.S. Postal Service mail carrier Vernon Harrison in the scheme.  Harrison, who provided James and his co-conspirators with mailing addresses to which they could mail debit cards, retrieved the debit cards from the mail and delivered them to James and his co-conspirators.  In exchange, Harrison received substantial payments.  Between 2010 and 2012, James and his co-conspirators filed hundreds of federal and state income tax returns that claimed over $1,000,000 in fraudulent tax refunds.

Sentencing has not yet been scheduled.  James faces a minimum sentence of two years in prison and a maximum sentence of twenty-two years in prison, three years of supervised release, restitution and a maximum fine of $250,000.  Slaton already pleaded guilty and was sentenced to 70 months in prison.  In July 2013, Harrison was found guilty by a jury for his role in the scheme.  Harrison will be sentenced on Oct. 31, 2013.

The case was investigated by Special Agents of the IRS - Criminal Investigation.  Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.

ALABAMA MAN PLEADS GUILTY TO STEALING TAX REFUNDS

According to court documents, Tellis obtained and used the stolen means of identification of individuals, including their names, dates of birth and Social Security numbers, for the purpose of filing false federal income tax returns.  Tellis instructed his co-conspirators and others to provide him with bank account numbers for accounts at financial institutions that were used to receive the fraudulently obtained tax refunds.  Tellis used the account numbers and stolen means of identification to file false tax returns that claimed over $700,000 in false refunds.  As a result of his plea, Tellis faces a maximum sentence of 17 years in prison and a maximum fine of $250,000 per count.

This case was investigated by special agents of the Internal Revenue Service (IRS) - Criminal Investigation.  Trial Attorneys Charles M. Edgar Jr. and Michael Boteler of the Justice Department’s Tax Division prosecuted the case.

Two men from Miami have pleaded guilty to laundering millions of dollars obtained through a $10.5 million Medicare fraud scheme using shell companies they controlled.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Health and Human Services Office of Inspector General (HHS-OIG) region including all of Florida made the announcement.

Rafael Roche, 43, and Alain Remy, 35, pleaded guilty on Oct. 24, 2013, and Oct. 23, 2013, respectively, in the U.S. District Court for the Middle District of Florida to an indictment charging them with conspiracy to commit money laundering involving the proceeds of a health care fraud scheme.  Remy is scheduled for sentencing on Jan. 16, 2014; Roche’s sentencing date has yet to be scheduled.  They each face a maximum penalty of 20 years in prison.

According to documents filed in the case, Roche, Remy and others conspired to engage in financial and monetary transactions of health care fraud proceeds from Renew Therapy Center of Port St. Lucie LLC (Renew Therapy), a comprehensive outpatient rehabilitation facility.  From November 2007 through August 2009, Renew Therapy submitted approximately $10,549,361 in fraudulent claims for reimbursement to Medicare for therapy services that were not legitimately prescribed and not legitimately provided to Medicare beneficiaries.  As a result of those fraudulent claims, Medicare deposited approximately $6,248,056 into a Renew Therapy bank account.  The fraud proceeds in that account were subsequently disbursed to various entities, including a combined total of $1,847,222 to Ariguanabo Investment Group Inc. and IRE Diagnostic Center Inc., shell companies that Roche and Remy controlled.

Court records indicate that more than $1.2 million was laundered through Ariguanabo Investment Group between Feb. 5, 2009, and Sep. 22, 2009.  The money was subsequently removed from the Ariguanabo Investment Group bank account to various individuals and entities, including to Ibiza Future Planning Inc., a shell company that Remy established and controlled.

More than $600,000 was laundered through IRE Diagnostic Center from Aug. 7, 2008, and Jan. 29, 2009.  The money was subsequently removed from the IRE Diagnostic Center bank account to various individuals and entities, including to A&R Medical Services of South Florida Inc., another shell company that Roche and Remy established and controlled.
 
This 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 U.S. Attorney’s Office for the Middle District of Florida.  This case is being prosecuted by Trial Attorney Christopher J. Hunter 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 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

David Oquendo-Rivas, 29, was sentenced today to life in prison for his role in the murder of eight people and an unborn child during a mass shooting at a Puerto Rico nightclub in 2009.
 
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez made the announcement.

Oquendo-Rivas and his co-defendant, Alexis Candelario-Santana, were convicted by a federal jury on March 8, 2013.  Oquendo-Rivas was convicted of 28 counts of committing violent crimes in aid of racketeering activity and nine counts of using a firearm in relation to a crime of violence.  These offenses occurred on Oct. 17, 2009, in what became known as the “La Tómbola Massacre.”  Candelario-Santana was sentenced to life in prison on Aug. 28, 2013. 
 
According to the evidence presented at trial, Oquendo-Rivas was recruited by Candelario-Santana in 2009 to assist Candelario-Santana in reinstituting control over his drug trafficking organization, which operated principally in Sabana Seca, Toa Baja, Puerto Rico.  The organization purchased drugs in bulk, processed and packaged the drugs, and sold them at Sabana Seca through numerous sellers, runners and enforcers under Candelario-Santana’s control.  The organization sold crack, cocaine, heroin and marijuana, and members of the organization routinely possessed firearms to protect its drug points.

On Oct. 17, 2009, the new leader of Candelario-Santana’s drug trafficking organization, who had displaced Candelario-Santana, held the grand opening of a nightclub he had rented and refurbished called La Tómbola, located in Toa Baja, Puerto Rico, complete with a popular live band and a festive Paso Fino horse parade, known as a “cabalgata.”  The event was heavily attended, with families congregating inside and outside the establishment, most of whom had nothing to do with the drug trafficking organization and merely resided in the general area.  At approximately 11:50 p.m., Oquendo-Rivas, Candelario-Santana and others – all of whom were heavily armed – drove to La Tómbola. When they arrived, they immediately opened fire indiscriminately on all the patrons located outside, many of whom were women, children and elderly people.  Oquendo-Rivas and Candelario-Santana stormed into the La Tómbola, and Candelario-Santana was heard to yell “no one gets out alive” as they opened fire on the people inside. 
 
In all, eight people and an 8-month unborn child were killed as a result of the gunfire at La Tómbola, and 19 other victims were shot and injured.  The evidence introduced at trial demonstrated that 335 expended shell-casings were recovered from the La Tómbola crime scene.  The ballistics evidence established that three AK-47-type assault rifles, one AR-15-type assault rifle, eight 9mm semi-automatic pistols, three 40-caliber semi-automatic pistols, and two 45-caliber semi-automatic pistols were used in the attack.
 
 Oquendo-Rivas and another individual were discovered several days following the massacre with three pistols, one of which was scientifically matched to the La Tómbola massacre.

The case was investigated by the FBI and the Puerto Rico Police Department, with the collaboration of the U.S. Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Postal Inspection Service; Instituto de Ciencias Forenses; and the Puerto Rico Department of Justice.  The case was prosecuted by First Assistant U.S. Attorney María Dominguez-Victoriano and Assistant U.S. Attorney Marcela C. Mateo of the U.S. Attorney’s Office for the District of Puerto Rico and Trial Attorney Bruce R. Hegyi of the Criminal Division’s Capital Case Section.

 The United States filed a civil complaint yesterday asking a federal court in Honolulu to enjoin James A. Ericson from preparing federal tax returns for others, the Justice Department announced today.  The complaint alleges that Ericson frequently prepares returns for individuals claiming refunds from the federal government that are not deserved.  The complaint also alleges that Ericson prepares roughly over 1,000 tax returns per year for individuals on Maui, Hawaii.

According to the complaint, Ericson improperly understates his customers’ federal tax liabilities by creating phony businesses and then listing those fake businesses on returns and fabricating expenses and losses for them, claiming false or inflated credits and deducting personal expenses of his customers, such as costs associated with customers’ hobbies, which are not legally deductible.  In total, the government’s complaint alleges that the loss to the U.S. Treasury from Ericson’s activities could be as much as $31 million for tax years 2007-2012.  The government also asserts that many of Ericson’s customers may owe additional tax, interest, and penalties because of the improperly prepared returns.

In addition to asking the court to prohibit Ericson from preparing or filing federal tax returns for others, the complaint also seeks to enjoin anyone acting in concert with Ericson from preparing or filing federal tax returns, to prohibit Ericson from requesting or directing the preparation of federal tax returns for others,  to require Ericson, within 30 days of entry of an injunction issued in this case, to contact all persons for whom he prepared a federal tax return since Jan. 1, 2008,  in order to inform all such persons of the permanent injunction entered against him, to  require Ericson to provide a list of all such persons to the United States, to allow the United States to monitor Ericson’s compliance with any such injunction, and  to request that the Court retain jurisdiction over this case to enforce any injunction entered against Ericson.

Return preparer fraud is one of the Internal Revenue Service’s Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 .  The Internal Revenue Service has some tips for choosing a tax preparer: http://www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional . In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm .

Earlier today, charges were unsealed against Romanian fugitive Nicolae Popescu, the leader of an international organized crime syndicate that ran a multimillion dollar cyber fraud scheme, and six other fugitives charged with participating in the same scheme.  Interpol has issued red notices to foreign law enforcement partners seeking assistance in the apprehension of these fugitives, and the FBI has also released “Wanted” posters to facilitate their arrests.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, and Assistant Director in Charge George Venizelos of the FBI’s New York Office made the announcement.

“Today, we have unsealed charges – and issued “wanted” posters and Interpol red notices – for a band of dangerous cybercriminals who are alleged to have stolen millions of dollars from unsuspecting consumers around the globe,” said Acting Assistant Attorney General Raman.  “As described in the indictment, the leader of this band of thieves openly proclaimed that he is beyond the reach of the U.S. criminal justice system.  But with the help of our international partners, we will track down and capture every alleged member of this criminal syndicate, no matter where they are hiding.”

“Using forged documents and phony websites, for years Popescu and his criminal syndicate reached across the ocean to pick the pockets of hard working Americans looking to purchase cars,” said United States Attorney Lynch.  “They thought their distance would insulate them from law enforcement scrutiny.  They were wrong.  By now, Popescu and his band of fugitives have seen their co-conspirators brought here to account for their crimes.  Today’s actions place them squarely in the sights of our partners in international law enforcement. We will not stop in our efforts to find these fugitives and bring them to justice for the crimes they have allegedly committed against our citizens. ”

“As alleged, the defendants infiltrated the cyber marketplace with advertisements for high-value items that didn’t exist,” said FBI Assistant Director in Charge Venizelos.  “They siphoned funds from victims to fuel their greedy desires and created false identities, fake websites and counterfeit certificates of title in order to make the scheme more convincing.  Popescu and his co-conspirators were masters of illusion, but they can’t escape their ultimate reality.  With the help of our law enforcement partners at home and abroad, we will bring them to justice.”

Popescu, Romanian nationals Daniel Alexe, Dmitru Daniel Bosogioiu, Ovidiu Cristea, and Dragomir Razvan, and a defendant who goes by the names “George Skyper” and “Tudor Barbu Lautaru,” as well as Albanian national Fabjan Meme, were originally charged in a criminal complaint with six other defendants for their participation in a cyber-fraud conspiracy that targeted primarily American consumers on such U.S.-based websites as Cars.com and AutoTrader.com.  Their six co-defendants were arrested in a coordinated international takedown on Dec. 5, 2012, but Popescu, Alexe, Bosogioiu, Cristea, Razvan, and Meme have remained at large.

As alleged in the complaint and subsequent indictment, the defendants participated in a long-term conspiracy to saturate Internet marketplace websites including eBay, Cars.com, AutoTrader.com, and CycleTrader.com with detailed advertisements for cars, motorcycles, boats, and other high-value items – generally priced in the $10,000 to $45,000 range – that did not actually exist.  The defendants employed co-conspirators who corresponded with the victim buyers by email, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money.  The defendants allegedly even pretended to sell cars from nonexistent auto dealerships in the United States and created phony websites for these fictitious dealerships.  As part of the scheme, the defendants produced and used high-quality fake passports to be used as identification by co-conspirators in the United States to open U.S. bank accounts.  After the “sellers” reached an agreement with the victim buyers, they would often email them invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with instructions to transfer the money to the U.S. bank accounts used by the defendants.  The defendants and their co-conspirators allegedly used counterfeit service marks in designing the invoices so that they would appear identical to communications from legitimate payment services.  The illicit proceeds were then withdrawn from the U.S. bank accounts and sent to the defendants in Europe by wire transfer and other methods.  
            
The complaint and indictment describe the extent to which Popescu, in particular, led the conspiracy.  Among other things, Popescu coordinated the roles of the various participants in the scheme – he hired and fired passport makers based on the quality of the fake passports they produced, supervised co-conspirators who were responsible for placing the fraudulent ads and corresponding with the victims, and ensured that the illicit proceeds transferred to the U.S. bank accounts were quickly collected and transferred to himself and others acting on his behalf in Europe.  Popescu also allegedly directed Cristea to obtain and transfer luxury watches purchased using the illegal proceeds of the scheme, including three Audemars Piguet watches with a combined retail value of over $140,000, to his associates in Europe.  It is estimated that the defendants earned over $3 million from the fraudulent scheme.

According to the charging documents, Popescu and his close associate Bosogioiu demonstrated that they were aware of the risks of prosecution in the United States.  In a recorded conversation on Oct. 23, 2011, Bosogioiu asked about the difference between federal and state law in the United States and vowed to avoid the FBI.  Popescu, meanwhile, predicted on July 28, 2011, that “criminals will not be extradited from Romania to U.S.A….[I]t will never happen.”

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

The government’s case is being prosecuted by Senior Litigation Counsel Carol Sipperly of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Cristina Posa, Nadia Shihata, and Claire Kedeshian of the U.S. Attorney’s Office for the Eastern District of New York.

The offices of the FBI Legal Attachés in Romania, the Czech Republic, the United Kingdom, Canada and Hungary were instrumental in coordinating efforts with the United States’ international partners, and the U.S. government thanks its partners in Romania, the Czech Republic, Hungary, the United Kingdom, Canada and Germany for their close cooperation throughout this investigation.  The Criminal Division’s Computer Crime and Intellectual Property Section, Office of International Affairs, and Asset Forfeiture and Money Laundering Section provided assistance with this investigation, as did the International Organized Crime Intelligence and Operations Center; the Internet Crime Complaint Center; the Costa Mesa, Calif., Police Department; the Orange County, Calif., District Attorney’s Office; and the New York City Police Department. 

A former owner of a Salt Lake City medical equipment supply company has been indicted and three former company employees have pleaded guilty for allegedly engaging in a $20 million Medicare fraud scheme. 

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney David B. Barlow of the District of Utah, Special Agent in Charge Mary Rook of the FBI’s Salt Lake City Field Office, Special Agent in Charge Gerry Roy of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Kansas City Regional Office, and Special Agent in Charge Janice M. Flores of the Defense Criminal Investigative Service’s (DCIS) Southwest Field Office made the announcement.

Jacob Kilgore, 34, of Fruit Heights, Utah, was indicted in the District of Utah on three counts of health care fraud, three counts of false statements relating to health care matters, and three counts of wire fraud. 

According to court documents, Kilgore was the co-owner, vice president, and regional sales manager of Orbit Medical Inc. (Orbit), a durable medical equipment supplier located in Salt Lake City specializing in power wheelchairs.  From approximately September 2008 through June 2011, Kilgore allegedly directed a scheme to defraud Medicare by submitting false and fraudulent claims to Medicare for power wheelchairs.  Court documents allege that Kilgore and others falsified medical records – including power wheelchair prescriptions and chart notes obtained from physicians – to make it appear that beneficiaries qualified to receive power wheelchairs when they did not and that the claims otherwise met all Medicare requirements.  Kilgore and others then used these falsified documents to support false and fraudulent claims from Orbit to Medicare. 

Additionally, former Orbit sales representatives Morgan Workman, 35, of Farmington, Utah; David Evans, 29, of South Jordan, Utah; and Hunter Hartman, 29, of Ladera Ranch, Calif., have each pleaded guilty to conspiring to commit health care fraud, based on the same alleged scheme to defraud Medicare.  They are awaiting sentencing. 

The scheme allegedly resulted in more than $20 million in claims from Orbit to Medicare for power wheelchairs, of which Medicare paid more than $15 million.

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

The case was investigated by the FBI, HHS-OIG and DCIS.  This case is being prosecuted by Trial Attorney Niall M. O’Donnell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark Y. Hirata of the U.S. Attorney’s Office for the District of Utah.

Gilberto Lerma Plata, a former commander of the Mexican State Police and member of the Gulf Cartel, was sentenced today to serve 151 months in prison for conspiring to import multi-ton quantities of marijuana into the United States, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA). 

Lerma Plata, 50, was sentenced before U.S. District Judge Colleen Kollar-Kotelly in the District of Columbia.  In addition to his prison term, Lerma Plata was ordered to forfeit $10 billion in drug proceeds as part of a money judgment.  At a post-trial hearing, the United States proved that from 2006 to 2011, the Gulf Cartel distributed in excess of 1.4 million kilograms of cocaine and 8,000 metric tons of marijuana.  The money judgment represents the gross receipts of the Gulf Cartel’s drug sales into the United States from its principal distribution centers located along the U.S.-Mexico border.

“Gilberto Lerma Plata chose his own interests and those of the Gulf Cartel over fulfilling his duty to protect the Mexican people,” said Acting Assistant Attorney General Raman.  “As a police officer, the defendant should have fought narco-traffickers; but, instead, he helped those traffickers transport massive quantities of dangerous drugs into the U.S.  Today, this former crime fighter will start serving his prison sentence alongside the cartel members he assisted and will be required to forfeit 10 billion dollars in ill-gotten gains - a fitting end to his criminal career.”

On July 29, 2011, Lerma Plata was charged with conspiracy to manufacture and distribute five kilograms or more of cocaine and 1,000 kilograms or more of marijuana for importation into the United States.  Lerma Plata was arrested in McAllen, Texas, on April 6, 2012.  On March 1, 2013, Lerma Plata pleaded guilty to conspiracy to import multi-ton quantities of marijuana into the United States.

Lerma Plata was employed as the commander of the state police in Miguel Aleman, Tamaulipas, Mexico.  According to court documents, Lerma Plata was on the Gulf Cartel’s payroll while he was employed by the state police, and he used his position of authority to engage in drug trafficking activities with the cartel.  Lerma Plata also contributed to the acts of violence committed by the cartel in its efforts to control drug trafficking routes to the United States by aiding in the procurement of firearms.  Intercepted conversations revealed that Lerma Plata and high ranking members of the Gulf Cartel discussed the shipment of large quantities of marijuana for distribution in the United States as well as the transportation from the United States of proceeds from the sales of the drugs.  These intercepted conversations also revealed that Lerma Plata obtained AK-47 and AR-15 assault rifles, as well as pistols, for members of the cartel.

The investigation in this case was led by the DEA’s Houston Field Division and the DEA Bilateral Investigation Unit and was part of a DOJ Organized Crime and Drug Enforcement Task Force investigation.  The case was prosecuted by Trial Attorney Adrián Rosales of the Criminal Division’s Narcotic and Dangerous Drug Section.

Bridgett Terry-Sankey of Montgomery, Ala., was sentenced today to serve 24 months and one day of imprisonment for filing a false claim and aggravated identity theft, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.

Terry-Sankey previously pleaded guilty to one count of filing a false claim and one count of aggravated identity theft on June 18, 2013.  According to court documents, Terry-Sankey worked as a tax preparer at Davis Professional Tax in Montgomery.  Terry-Sankey admitted that while employed at Davis Professional Tax she prepared and electronically filed four false 2010 federal income tax returns using the means of identification of actual individuals without their knowledge or permission.  Terry-Sankey then caused the false refunds to be deposited onto debit cards or issued as refund anticipation loans, and she used the false refunds for her personal benefit.

This case was investigated by Special Agents of the Internal Revenue Service (IRS) - Criminal Investigation.  Tax Division Trial Attorneys Alexander Effendi and Jason H. Poole and Assistant U.S. Attorney Todd Brown prosecuted the case.

Dr. Patricia Lynn Hough, of Englewood, Fla., was convicted today by a jury in Fort Myers, Fla., of conspiring to defraud the Internal Revenue Service (IRS) by concealing millions of dollars in assets and income in offshore bank accounts at UBS and other foreign banks, and of filing false individual income tax returns which failed to report the existence of those foreign accounts or the income earned in those accounts, the Justice Department and the Internal Revenue Service (IRS) announced today.  

 
According to court documents and court proceedings, Hough owned two Caribbean-based medical schools – The Saba University School of Medicine located in Saba, Netherlands Antilles, and The Medical University of the Americas located in Nevis, West Indies. Hough conspired to defraud the IRS with her husband, Dr. David Fredrick, who is awaiting trial.  They carried out the conspiracy by creating and using nominee entities, including a foundation, and undeclared accounts in their names and the names of nominee entities at UBS and other foreign banks to conceal assets and income from the IRS.  Both schools and associated real estate were sold on April 3, 2007, for more than $35 million, all of which was deposited into undeclared accounts in the name of the nominee entities.  The majority of the sale proceeds were not reported to the IRS on their tax returns and no tax was paid. 

The evidence at trial further proved that Hough and her co-conspirator used emails, telephone calls and in-person meetings to instruct Swiss bankers and asset managers to make investments and transfer funds from their undeclared accounts at UBS. The evidence established that Hough and her co-conspirator caused funds from the undeclared accounts in the names of the medical schools to be transferred to undeclared accounts in their individual names or in the names of nominee entities.  Hough and her husband then used the funds in their undeclared accounts to purchase an airplane, two homes in North Carolina and a condominium in Sarasota, Fla.   
Hough was also convicted of four counts of filing false tax returns for 2005, 2006, 2007 and 2008.  The evidence at trial established that Hough filed false tax returns that substantially understated her total income because she failed to report substantial interest and investment income and in 2007  because she failed to report her half of the proceeds from the sale of the medical schools.  In addition, Hough failed to report on Schedule B of the tax returns that she had an interest in or signature or other authority over bank, securities or other financial accounts located in foreign countries. 
U.S. citizens, resident aliens and legal permanent residents of the United States have an obligation to report to the IRS on Schedule B of a U.S. Individual Income Tax Return, Form 1040, whether they have a financial interest in, or signature authority over, a financial account in a foreign country in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account is maintained. U.S. citizens and residents also have an obligation to report all income earned from foreign bank accounts on their tax returns.
“Today's jury verdict is another example that those who would attempt defraud the IRS by hiding income and assets in offshore accounts risk prosecution and, upon conviction, potentially significant jail time,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “In the end, they will still owe taxes due and face severe civil penalties.”

“Dr. Hough's financial transactions were nothing more than a shell game to hide her income,” said Richard Weber, Chief, IRS-Criminal Investigation. “Her earned income was placed into foreign bank accounts to advance her tax fraud. Taxpayers participating in international tax fraud are under the watchful scrutiny of the IRS, and stopping them is one of our highest priorities."

U.S. District Judge John Steele scheduled sentencing for Feb. 10, 2013.  The conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine. The false return counts each carry a maximum potential penalty of three years in prison and a $250,000 fine.
This case was prosecuted by Trial Attorneys Caryn Finley and Leigh Kessler of the Justice Department’s Tax Division and was investigated by IRS – Criminal Investigation.  Tax Division Assistant Attorney General Kathryn Keneally thanks them for their work, and also thanks the U.S. Attorney’s Office for the Middle District of Florida, Fort Myers Division, for their assistance and support in the prosecution. 
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.

Tarrish Tellis of Montgomery County, Ala., pleaded guilty today to conspiracy, theft of public funds and aggravated identity theft, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.

According to court documents, Tellis obtained and used the stolen means of identification of individuals, including their names, dates of birth and Social Security numbers, for the purpose of filing false federal income tax returns.  Tellis instructed his co-conspirators and others to provide him with bank account numbers for accounts at financial institutions that were used to receive the fraudulently obtained tax refunds.  Tellis used the account numbers and stolen means of identification to file false tax returns that claimed over $700,000 in false refunds.  As a result of his plea, Tellis faces a maximum sentence of 17 years in prison and a maximum fine of $250,000 per count.

This case was investigated by special agents of the Internal Revenue Service (IRS) - Criminal Investigation.  Trial Attorneys Charles M. Edgar Jr. and Michael Boteler of the Justice Department’s Tax Division prosecuted the case.

A Talladega County, Ala., man pleaded guilty today in federal court to attempting to hire a member of the Ku Klux Klan to murder an African-American neighbor, the Justice Department announced today.

Allen Wayne Densen Morgan, 29, of Munford, Ala., entered a guilty plea before U.S. District Judge Karon O. Bowdre to one count of using and causing someone else to use interstate facilities and travel -- a telephone and a motor vehicle -- with the intent to commit a murder-for hire.  Morgan's sentencing is scheduled Feb. 27, 2014, and he faces a statutory maximum penalty of 10 years in prison.

Federal officials arrested Morgan in August of 2013 after he told FBI agents posing as members of the KKK that he would pay them to murder his neighbor.  Morgan admitted he offered a watch, a necklace and a gun as payment for the murder and gave explicit details for the man's torture and murder.

Morgan's efforts to arrange the paid murder of his neighbor unfolded as follows, according to his plea:

 Morgan talked to an undercover FBI agent by telephone on Aug. 22, 2013, who identified himself as a KKK member.  The men arranged to meet three days later at an Oxford motel to discuss payment for the murder.  In that phone conversation, Morgan used a racial slur to describe the man he wanted killed and bragged that he had just fired several shots toward the man to intimidate him.  Morgan also described, in detail, how he wanted the man to be “hung from a tree like a deer and gutted," to have body parts cut off and to "die a slow, painful death."

“The defendant attempted to arrange the brutal murder of his neighbor as vengeance for a perceived wrong,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division of the Department of Justice.  “The Justice Department will prosecute with vigor those who seek violent vigilantism.”

“This defendant’s effort to solicit a murder for hire is a federal crime,” Joyce White Vance, U.S. Attorney for the Northern District of Alabama said. “The prosecution here was swift and the punishment will be in a federal penitentiary. Future wrongdoers are on notice that we vigorously prosecute these crimes."

The FBI investigated the case.  Assistant U.S. Attorneys Pat Meadows and John B. Felton of the Northern District of Alabama and Civil Rights Division Trial Attorney David Reese are prosecuting the case.

The Justice Department announced that former Jefferson Parish, La. Sheriff’s Office Sergeant Gary J. Shine pleaded guilty today before Federal District Court Judge Ivan L.R. Lemelle  to assaulting a detainee at the Jefferson Parish Correctional Center in Gretna, La., thereby depriving the detainee of his civil rights.  

During the plea hearing, Shine admitted that on Oct. 21, 2012, while he was working as a sergeant, he struck an inmate with his knee, while the inmate’s hands were cuffed behind his back.  Shine admitted that he also punched the inmate in the head.  Shine’s actions caused bruising.  Shine acknowledged that the inmate did not pose a threat to Shine or any other person, and that there was no legal justification for Shine to strike the inmate.  

“It is a federal crime for law enforcement officers to willfully use excessive force,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “Today’s guilty plea demonstrates the Justice Department’s commitment to ensuring that official misconduct is addressed fully and fairly.”

“The vast majority of our law enforcement officials serve with honor and integrity,” said Kenneth Polite, U.S. Attorney for the Eastern District of Louisiana. “However, when someone abuses the power and privileges of his office, as Gary Shine did here, he will be held accountable.”

At sentencing, which is set for Jan. 22, 2014, Shine faces a statutory maximum sentence of 10 years of incarceration. 

This case was investigated by the FBI and was prosecuted by Trial Attorney Christine M. Siscaretti of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Stephen C. Parker for the Eastern District of Louisiana.

The administrator and employee of two Miami health care companies was sentenced today to serve 60 months in prison for her participation in a $74 million home health Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the 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 Dennis of the HHS Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.

Myriam Acevedo, 63, of Miami, was sentenced by U.S. District Judge Marcia G. Cooke in the Southern District of Florida.  In May 2013, Acevedo pleaded guilty, without a plea agreement, to one count of conspiracy to pay health care kickbacks and two counts of payment of health care kickbacks.

According to court documents, Acevedo was an administrator of LTC Professional Consultants Inc. (LTC) and an employee of Professional Home Care Solutions Inc. (Professional), Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.  Acevedo and her co-conspirators agreed to and actually did operate LTC and Professional 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.

Acevedo’s primary role in the scheme was to pay kickbacks and bribes to patient recruiters of LTC and Professional.  As part of this role, Acevedo and others would distribute cash to patient recruiters in exchange for providing patients to LTC and Professional, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries.  Acevedo and her co-conspirators would use these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for home health care services, which Acevedo knew was in violation of federal criminal laws. 

From approximately September 2007 through June 2012, LTC and Professional submitted approximately $41 million in claims for home health services that were not medically necessary and/or not provided.  Medicare actually paid approximately $27 million for these fraudulent claims.  Acevedo was part of an overall scheme that fraudulently billed Medicare more than $74 million.

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

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Deputy Attorney General James M. Cole and Panamanian Attorney General Ana Belfon today signed an agreement in Panama City, Panama, to share more than $36 million in forfeited criminal assets with the Government of Panama.  The asset sharing is based on the extensive and wide-ranging assistance provided by the Government of Panama in connection with a 2000 money laundering case brought involving Panama-based jewelry stores.  The agreement acknowledges the first time the Department of Justice has shared forfeited assets with the Government of Panama and is the second largest sum ever shared by the Department of Justice with a foreign government.

“Today’s agreement marks the Department of Justice’s recognition, through asset sharing, of the remarkable assistance that the Panamanian authorities have provided,” Deputy Attorney General James M. Cole said.  “For more than 12 years, the assistance of the Panamanian authorities has been consistent, reliable, and broad-ranging.  As we see, in this case, how much can be accomplished through international cooperation, let us resolve to continue this same high level of cooperation in future cases.”

 The asset sharing results from an investigation that United States Drug Enforcement Administration (DEA) agents and Panamanian authorities began in 1998 into Speed Joyeros S.A., which operated in the Colon Free Trade Zone in Panama.  The owners were found to be laundering massive sums of narcotics, trafficking proceeds through Speed Joyeros and another jewelry business, Argento Vivo S.A. 

 In 2000, a federal grand jury in the Eastern District of New York indicted the businesses and their owners on charges of money laundering and money laundering conspiracy.  At the request of the United States, Panamanian authorities restrained the assets of the businesses and extradited their owners to the United States for trial.  The owners pleaded guilty in April 2002, and the U.S. court issued a final order of forfeiture in May 2006 for all corporate assets of Speed Joyeros and Argento Vivo.  In October 2008, the Panamanian Supreme Court ordered enforcement of the U.S. forfeiture order and in April 2010 authorized the transfer to the United States of 468 boxes filled with 10 tons of gold and silver jewelry, gem stones and watches for liquidation by the U.S. Marshals Service.  In May 2011, more than $52 million in proceeds from the liquidation was deposited into the Department of Justice Assets Forfeiture Fund. 

 In recognition of Panama’s assistance in the case, the Department of Justice relied on statutory authority to share 70 percent of the net forfeited assets with the Government of Panama.  The Deputy Attorney General approved the sharing in August 2010, and the Department of State concurred with the decision in March 2012, contingent upon the conclusion of an agreement with the Government of Panama to implement the transfer of the funds.  United States law requires that international asset sharing must be authorized by an international agreement between the United States and the recipient country. 

 Because of the large sum of money being shared, the agreement establishes a six-member Executive Sharing Committee to oversee the sharing process.  The agreement authorizes the committee to approve the selection of programs, projects and other expenditures consistent with the goal of strengthening the capacity of the Republic of Panama to combat money laundering and forfeit illicit assets in criminal investigations and prosecutions.  The agreement provides for representation on the committee from the United States Departments of Justice, Treasury, and State, and from the Panamanian Attorney General’s Office and Ministries of Public Security and Foreign Affairs.  The signing of the case-specific agreement will enable the Executive Sharing Committee to solicit and consider specific proposals for funding.

 Other Central American countries that have received asset sharing from the United States in connection with other U.S. forfeitures include Costa Rica, Guatemala and Honduras.  The largest recipient to date has been Guatemala, having received nearly $1 million in sharing stemming from five separate forfeiture cases.  Over the past 24 years, the United States has shared more than $277 in forfeited criminal assets with 54 countries in recognition of their assistance to United States forfeiture investigations and proceedings.

Two current U.S. Army National Guard soldiers have pleaded guilty for their role in bribery and fraud schemes that caused a total of at least $70,000 in losses to the U.S. Army National Guard Bureau. 

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.

Sergeant Annika Chambers, 28, of Houston, pleaded guilty today to one count of conspiracy and one count of bribery. Specialist Elisha Ceja, 27, of Barboursville, W.V., previously pleaded guilty to the same charge on Oct. 1, 2013. The cases against both defendants arise from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses.  To date, the investigation has led to charges against 25 individuals, 17 of whom have pleaded guilty. 

According to court documents filed in both cases, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker, Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP).  The G-RAP was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard.  Through this program, a participating soldier could receive up to $3,000 in bonus payments for referring another individual to join.  Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account.  To participate in the program, soldiers were required to create online recruiting assistant accounts.

Ceja and Chambers both admitted that they paid Army National Guard recruiters for the names and Social Security numbers of potential Army National Guard soldiers.  They further admitted that they used the personal identifying information for these potential soldiers to falsely claim that they were responsible for referring the potential soldiers to join the Army National Guard.

As a result of these fraudulent representations, Ceja collected approximately $12,000 in fraudulent bonuses, and Chambers collected approximately $17,000 in fraudulent bonuses. 
The charge of bribery carries a maximum penalty of 15 years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.  The charge of conspiracy carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss. 

Ceja and Chambers are scheduled to be sentenced before U.S. District Judge Lee H. Rosenthal in Houston on Dec. 19, 2013, and March 11, 2013, respectively.

These cases are being investigated by Special Agents from the San Antonio Fraud Resident Agency of Army Criminal Investigation Command’s Major Procurement Fraud Unit. The cases are being prosecuted by Trial Attorneys Sean F. Mulryne, Mark J. Cipolletti, and Heidi Boutros Gesch of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas. 

A member of the Playboy Bloods street gang was sentenced today to life in prison for the retaliation murder of a man in November 2004 and the armed robbery of a Henderson, Nev., casino in 2002, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.

Jacorey Taylor, aka “Mo-B,” 30, who was convicted by a jury in May 2013, was sentenced by U.S. District Judge Robert C. Jones. Taylor was convicted of engaging in a racketeering (RICO) conspiracy, committing violent crimes in aid of racketeering activity, using a firearm during a crime of violence, participating in a drug conspiracy, and possessing crack cocaine with the intent to distribute.  He is the ninth gang member to be convicted out of 10 charged in a RICO indictment filed in 2008.  The remaining defendant, Markette Tillman, 31, is awaiting trial.

Taylor and co-defendants Reginald Dunlap, aka “Bowlie,” and Steven Booth, aka “Stevie-P,” were convicted of participating in the murder of Billy Ray Thomas, who was shot multiple times in the back on the morning of Nov. 1, 2004, as he worked on a car in the parking lot of the Pecos Terrace Apartments while waiting to take his girlfriend to work.  The defendants murdered Thomas due to their mistaken belief that Thomas was a member of a rival street gang.  According to evidence presented at trial, two car loads of Playboy Bloods members and associates, including Taylor, Dunlap, Booth and others, drove through known Crip neighborhoods searching for rivals to retaliate against for the murder of Quaza Burns, a leader of the Playboy Bloods.  The victim, Billy Ray Thomas, had no gang affiliation. 

Evidence produced at trial also showed that on March 21, 2002, Taylor, armed with an AR-15 style assault rifle, and another man armed with an handgun entered the Klondike Casino in Henderson, forced their way behind the casino cage, and robbed the casino of over $7,000 in currency.

Dunlap and Booth pleaded guilty to racketeering conspiracy charges during Taylor’s trial and were each sentenced in April 2013 to 20 years in prison.  There is no parole in the federal criminal justice system.

According to court documents and evidence produced at trial, the Bloods are a nationally known criminal street gang whose members engage in drug trafficking and acts of violence.  The Playboy Bloods is a local “set” or affiliate of the Bloods, with local control and operation within the Las Vegas metropolitan area.  Other Bloods sets within the Las Vegas metropolitan area include the Piru Bloods and the West Coast Bloods.  A subset of the Playboy Bloods is the Full Throttle Clique, a group made up of Playboy Bloods members who engage in acts of violence, including murder.  According to evidence presented at trial, Taylor, Dunlap, and Booth were all members of the “Full Throttle Clique” of the Playboy Bloods.  Taylor, along with other Playboy Bloods enterprise members, operated drug houses in the Sherman Gardens Annex (also known as “The Jets”) and the surrounding areas.  

Eight other defendants who have been convicted and sentenced, as follows:

• Steven Booth, aka “Stevie-P,” 27, pleaded guilty to RICO conspiracy and was sentenced to 20 years in prison on April 10, 2013

• Reginald Dunlap, aka “Bowlie,” 30, pleaded guilty to RICO conspiracy and was sentenced to 20 years in prison on April 9, 2013

• Demichael Burks, aka “Mikey P,” 29, pleaded guilty to RICO conspiracy and was sentenced to 6½ years in prison on Dec. 3, 2010 

• Anthony Mabry, aka “Akim Slim,” 43, pleaded guilty to RICO conspiracy and was sentenced to 14 years in prison on Oct. 20, 2010

• Delvin Ward, aka “D-Luv,” 37, pleaded guilty to RICO conspiracy and was sentenced to 11 years in prison on Sept. 17, 2010

• Terrence Thomas, aka “Seven,” 40, pleaded guilty to drug conspiracy and was sentenced to 10 years in prison on June 16, 2010

• Sebastian Wigg, aka “Rock,” 36, pleaded guilty to drug conspiracy and was sentenced to five years in prison on March 29, 2010

• Fred Nix, aka “June P,” 36, pleaded guilty to drug conspiracy and was sentenced to five years in prison on March 29, 2010 

 The cases were investigated by the FBI’s Las Vegas Safe Streets Gang Task Force, which includes officers from the North Las Vegas Police Department and Las Vegas Metropolitan Police Department, and are being prosecuted by Assistant United States Attorneys Nicholas D. Dickinson, and Phillip N. Smith, Jr., and Kevin L. Rosenberg, Trial Attorney with the U.S. Department of Justice Organized Crime and Gang Section.

A Georgia real estate investor and his company pleaded guilty today for their role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Separate felony charges were filed on Sept. 25, 2013, in the U.S. District Court for the Northern District of Georgia in Atlanta, against Penguin Properties LLC and its owner, Seth D. Lynn.

According to court documents, from at least as early as Feb. 6, 2007 until at least Jan. 3, 2012, Penguin Properties and Lynn conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Fulton County, Ga.  Penguin Properties and Lynn were also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Fulton 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.

Charges were also brought against Penguin Properties and Lynn for their involvement in similar conspiracies in DeKalb County, Ga., from at least as early as July 6, 2004 until at least Jan. 3, 2012.

“Today’s charges are the first to be filed in the state of Georgia in the Antitrust Division’s ongoing investigation into anticompetitive conduct in real estate foreclosure auctions,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The division’s investigation has already resulted in dozens of guilty pleas in other states, and the division remains committed to eliminating anticompetitive practices at 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 Fulton and DeKalb 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 core of this case was about an unlevel field and one of unfairness with regard to the auction/bidding process of foreclosed properties,” said Mark F. Giuliano, Special Agent in Charge of the FBI Atlanta Field Office.  “The FBI remains committed in providing investigative resources to the U.S. Department of Justice’s Antitrust effort to address such matters.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals and a $100 million fine for corporations.  The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine of $250,000 for an individual, and a fine of $500,000 for a corporation.  The respective maximum fines for the conspiracy to commit mail fraud charge may be increased to twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

The investigation is being conducted by Antitrust Division attorneys in Atlanta and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should call 404-331-7113 or visit www.justice.gov/atr/contact/newcase.htm.

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’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  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.

Diebold Inc. (Diebold), the Ohio-based provider of integrated self-service delivery and security systems, including automated teller machines (ATMs), has agreed to pay a $25.2 million penalty to resolve allegations that it violated the Foreign Corrupt Practices Act (FCPA) by bribing government officials in China and Indonesia and falsifying records in Russia in order to obtain and retain contracts to provide ATMs to state-owned and private banks in those countries.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Steven M. Dettelbach of the Northern District of Ohio made the announcement.

The department today filed in U.S. District Court for the Northern District of Ohio a criminal information and a deferred prosecution agreement.  The two-count information charges Diebold with conspiring to violate the FCPA’s anti-bribery and books and records provisions and violating the FCPA’s books and records provisions.

“In China, Indonesia and Russia, Diebold chose to pay bribes for business and falsify documents to cover its tracks,” said Acting Assistant Attorney General Raman.  “Through its corrupt business practices, Diebold undermined the sense of fair play that is critical for the rule of law to prevail.  Today’s action – which holds Diebold accountable for its criminal conduct, while also recognizing its cooperation and voluntary disclosure to the government of its conduct – underscores that fighting global corruption is and will remain a mainstay of the Criminal Division’s mission.”

“Companies that pay bribes to public officials, whether those officials are in Cleveland, in Ohio or overseas, violate the law,” said U.S. Attorney Dettelbach.  “Corporate earnings cannot be placed above the rule of law, and today’s penalties – nearly $50 million in all – send the message again, loud and clear, that such conduct is unacceptable.  We hope that Diebold will use this opportunity, including the internal controls and compliance monitor required by today’s agreement, to turn the page to a newer and more ethical corporate culture.”

According to court documents, Diebold paid bribes and falsified documents in connection with the sale of ATMs to bank customers in China, Indonesia, and Russia.  With respect to China and Indonesia, the court documents allege that from 2005 to 2010, in order to secure and retain business with bank customers, including state-owned and -controlled banks, Diebold repeatedly provided things of value, including payments, gifts, and non-business travel for employees of the banks, totaling approximately $1.75 million.  Diebold attempted to disguise the payments and benefits through various means, including by making payments through third parties designated by the banks and by inaccurately recording leisure trips for bank employees as “training.”  The court documents also allege that from 2005 to 2009, Diebold created and entered into false contracts with a distributor in Russia for services that the distributor was not performing.  The distributor, in turn, used the money that Diebold paid to it, in part, to pay bribes to employees of Diebold’s privately-owned bank customers in Russia in order to obtain and retain ATM-related contracts with those customers.

In addition to the monetary penalty, Diebold agreed to implement rigorous internal controls, cooperate fully with the department, and retain a compliance monitor for at least 18 months.  The department agreed to defer prosecution for three years and, if Diebold abides by the terms of the deferred prosecution agreement, the department will dismiss the criminal information when the agreement’s term expires. The agreement acknowledges Diebold’s voluntary disclosure and extensive internal investigation and cooperation. 

In a related matter, Diebold reached a settlement with the SEC and agreed to pay approximately $22.97 million in disgorgement and prejudgment interest.  The SEC settlement was filed today.

The case is being prosecuted by Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Justin J. Roberts of the Northern District of Ohio.  The case was investigated by the FBI’s Cleveland Field Office.  The department acknowledges and expresses its appreciation for the assistance provided by the SEC’s Division of Enforcement.

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

A Vietnamese national has been indicted in the District of New Hampshire for allegedly participating in an international scheme to steal and sell hundreds of thousands of Americans’ personally identifiable information (PII) through various underground websites that he operated.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney John P. Kacavas of the District of New Hampshire, and Resident Agent in Charge Holly Fraumeni of the U.S. Secret Service’s Manchester Field Office made the announcement after the indictment was unsealed.

Hieu Minh Ngo, 24, a Vietnamese national, was charged in a 15-count indictment filed under seal in November 2012, charging him with conspiracy to commit wire fraud, substantive wire fraud, conspiracy to commit identity fraud, substantive identity fraud, aggravated identity theft, conspiracy to commit access device fraud, and substantive access device fraud.  Ngo was arrested upon his entry into the United States in February 2013.  The statutory maximum penalties are five years on the identity fraud and identity fraud conspiracy counts, two years each on the aggravated identity theft counts, 20 years on the wire fraud count and wire fraud conspiracy counts, 10 years on the substantive access device fraud count and five years on the conspiracy to commit access device fraud count. 

According to the indictment, from 2007 through 2012, Ngo and other members of the conspiracy acquired, offered for sale, sold, and/or transferred to others packages of PII for more than 500,000 individuals.  These packages, known as “fullz,” typically included a person’s name, date of birth, social security number, bank account number and bank routing number.  During this same time, Ngo and other members of the conspiracy acquired, offered for sale, sold, and/or transferred to others stolen payment card data, which typically included the victim account holder’s payment card number, expiration date, card verification value number, account holder name, account holder address and phone number.

The indictment alleges that Ngo operated one or more online marketplaces for various carding activities, known as carder forums, where he stored and offered for sale “fullz” and other PII, including “fullz” of individuals located in the District of New Hampshire.  On two carder forums, Ngo and his co-conspirators offered buyers the option to obtain a specified quantity of “fullz” or to submit a query of a particular name to obtain that person’s associated PII.  Ngo and his co-conspirators allegedly offered several categories of PII, depending on how recently the data had been acquired, and charged higher prices for more recent data.  Ngo allegedly made arrangements with others who, after paying a fee, could access and then and re-sell the stolen payment card data, “fullz” and other PII.  Ngo and his co-conspirators created one or more accounts with a digital currency service and used those accounts to receive funds for the stolen payment card data, “fullz” and other PII that they sold. 

The case was investigated by the U.S. Secret Service and is being prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.

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

A federal jury in Detroit today convicted the owner and the program coordinator of two Flint, Mich., adult day care centers for their participation in a $3.2 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan; Acting Special Agent in Charge John Robert Shoup of the FBI Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Detroit Office made the announcement.

Glenn English, 53, was found guilty in U.S. District Court for the Eastern District of Michigan of one count of conspiracy to commit health care fraud and seven counts of health care fraud for directing a psychotherapy fraud scheme through New Century Adult Day Program Services LLC and New Century Adult Day Treatment Inc. (collectively known as New Century).

Richard Hogan, 67, an unlicensed social worker who worked as a program coordinator at New Century, was found guilty of one count of conspiracy to commit health care fraud.

The defendants were charged in a superseding indictment returned Dec. 11, 2012.  Another individual charged in the superseding indictment, Donald Berry, awaits trial at a later date.

According to evidence presented at trial, English owned and operated New Century as an adult day care center through which he billed Medicare for individual and group psychotherapy services.  As shown at trial, New Century brought in mentally disabled residents of Flint-area adult foster care homes (AFCs), as well as people seeking narcotic drugs, and used their names to bill Medicare for psychotherapy that was not provided.  The evidence showed that English and Hogan lured drug seekers to New Century with the promise that they could see a doctor there who would prescribe for them the narcotics they wanted if they signed up for the psychotherapy program.  New Century used the signatures and Medicare information of these AFC residents and drug seekers to claim that it was providing them psychotherapy, when in fact it was not. 

The evidence also showed that English directed New Century employees to fabricate patient records to give the false impression that psychotherapy was being provided.  Social workers and untrained employees wrote fake progress notes for therapy sessions that never occurred.  Further, English and New Century employees directed New Century clients to pre-sign sign-in sheets for months at a time, and used these signatures to claim to Medicare they had provided services.  On multiple occasions, New Century billed Medicare as if its social workers had provided over 24 hours of care in a single day.

From March 2010 through April 2012, New Century billed approximately $3.2 million and received more than $988,000 from Medicare.

The health care fraud conspiracy count carries a maximum potential penalty of 10 years in prison; each count of health care fraud carries a maximum penalty of 10 years in prison.  Sentencing for both defendants is scheduled for Feb. 27, 2014.

The investigation was led by the FBI and HHS-OIG and was brought by the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

The Justice Department announced today that Jedediah Stout, 30, of Joplin, Mo., was charged today in a complaint filed in U.S. District Court in Springfield, Mo., with the attempted arson of a Planned Parenthood facility.

As stated in the complaint affidavit, on Oct. 3, 2013, and Oct. 4, 2013, Stout made consecutive attempts to set fire to the Planned Parenthood facility in Joplin. In both instances he threw items containing an accelerant onto the roof of the facility, and then ignited material attached to the accelerant. Stout will have his initial appearance in U.S. District Court on Oct. 21, 2013.

Today’s charge is the result of an investigation conducted by the FBI, the Bureau of Alcohol, Tobaco, Firearms, and Explosives (ATF), the Missouri State Highway Patrol and the Joplin Police Department. Prosecution of this case is being handled by Assistant U.S. Attorney Jim Kelleher in conjunction with the Justice Department’s Civil Rights Division.

The United States has requested that the federal district court in Jackson, Miss., permanently bar Danee Aikens from preparing federal income tax returns for others, the Justice Department announced today.

According to the complaint, Aikens prepares federal income tax returns under the name “Comprotax Service” from an office in Durant, Miss.  The complaint alleges that Aikens prepared returns that overstated income, including by reporting fictitious household help income, in order to increase the amount of her customers' claim to the Earned Income Tax Credit.

The complaint further alleges that Aikens prepared returns that falsely claimed a refundable education credit on behalf of her clients.

As alleged in the complaint, the loss to the government from Aikens’ return preparation from 2009 through 2012 could exceed $7 million.

Return preparer fraud is one of the Internal Revenue Service's Dirty Dozen Tax Scams for 2013 which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 .  In the past ten years the Justice Department's Tax Division has obtained injunctions against hundreds of unscrupulous tax-return preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm .

Related Materials:

United States v. Danee Aikens
Complaint for Permanent Injunction
 

The Justice Department announced today that it has reached an agreement with the Arapahoe County, Colo. Office of the Sheriff resolving allegations that the Office of the Sheriff violated the anti-discrimination provision of the Immigration and Nationality Act (INA).  

The investigation was initiated based on information obtained in the course of a lawsuit filed by a former employee against the Sheriff’s Office alleging discriminatory termination.  The Department’s investigation established that the Office of the Sheriff improperly restricted law enforcement positions to U.S. citizens notwithstanding the fact that no law, regulation, executive order or government contract authorized it to restrict employment in this manner. The former employee who filed the lawsuit was in fact a U.S. citizen and had documentation that showed her work authorization but not her citizenship.  The INA’s anti-discrimination provision prohibits certain discriminatory hiring practices against work-authorized individuals and permits employers to limit jobs to U.S. citizens only where the employer is required to do so by law, regulation, executive order, or government contract. 

Under the settlement agreement, the Office of the Sheriff’s employment eligibility verification practices will be subject to monitoring by the Justice Department and reporting requirements for a period of three years.  The Sheriff’s Office also agreed to pay $500 in civil penalties to the United States.  The Office of the Sheriff had already addressed the identified victim’s back pay claims through an earlier agreement based on her private lawsuit.  In addition, the Office of the Sheriff informed other affected non-U.S. citizen applicants that they could re-apply for available law enforcement positions.  The Sheriff’s Office denied that it committed any violation of the anti-discrimination provision but fully cooperated with the investigation and agreed to revise its hiring policies and procedures to ensure compliance with the INA’s anti-discrimination provision.

“Employers must ensure that their hiring practices do not violate the anti-discrimination provision of the INA,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “Any restrictions in hiring based on citizenship status must be pursuant to requirements established by law or government contract, not internal policies.  The Office of the Sheriff’s cooperation and its efforts to reach out to non-citizens affected by its past policies reflect its commitment to address the issues raised in this investigation in a meaningful manner.”
 

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA.   For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TTY for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TTY for hearing impaired), sign up for a free webinar at www.justice.gov/about/osc/webinars.php , email osccrt@usdoj.gov or visit the website at www.justice.gov/crt/about/osc .

A federal court in Columbus, Ohio, has permanently barred Tobias Elsass and his companies, “Fraud Recovery Group Inc.” and “Sensible Tax Services Inc.,” from preparing federal tax returns, promoting the availability of theft loss deductions, or engaging in any other tax-related business in the future.  The Court found that Elsass and Fraud Recovery Group have continually and repeatedly promoted a nationwide scheme falsely informing their customers that they were entitled to claim large theft loss tax deductions, and then preparing the tax returns that improperly claimed such deductions.  The civil injunction order was signed yesterday by Judge Peter C. Economus of the U.S. District Court for the Southern District of Ohio.

Elsass serves as president and founder of Fraud Recovery Group and Sensible Tax Services. The district court found that Elsass and his companies promoted a scheme that preyed largely on elderly investors across the United States who had suffered financial losses.  Elsass and his companies told the investors that they could deduct their financial losses on their federal income tax returns in an advantaged way and receive large refunds. Under federal tax law, victims of truly fraudulent investment schemes, such as a Ponzi scheme, may properly deduct their financial losses as thefts only if they can substantiate that the losses were, among other things, the product of criminal conduct.

In its opinion, the court concluded that Elsass misled his elderly investor customers into believing that they had valid theft loss deductions, thereby inducing them to pay him and his companies to prepare and file amended tax returns.  The opinion notes that hundreds of theft loss deductions claimed on tax returns prepared by Elsass and his companies were improper, because the financial losses they sought to deduct were merely the result of company mismanagement instead of criminal conduct – as Elsass knew.  Elsass and his companies were also aware that the Internal Revenue Service (IRS) was disallowing such claims, but filed similar claims for other investor customers in any event, in the hope that the later filings would escape IRS scrutiny. The court found that, as a result of such egregious conduct, Elsass and his companies potentially left their investor customers subject “to audits and scrutiny from the IRS.”

The court also determined that Elsass had intentionally engaged in “incompetent or disreputable” behavior not becoming a tax professional.  Based on the record before it, the court found that Elsass seemed “perfectly willing to lie and deceive, even to the extent of possibly committing perjury, in order to advance his own interests.”  Accordingly, the “sheer magnitude and variety of the Defendants’ transgressions” made permanent injunctive relief appropriate.

The court directed that FRG be closed and its operations terminated.  The court’s injunction order permanently bars Elsass from engaging in any business relating to providing tax advice or the preparation of tax returns.  Elsass and his companies are also prohibited from owning any interest in, operating, incorporating, working for or having any other association with any tax-related business in the future, and they must immediately divest any ownership interest they presently have with any such entities.  The court’s order also requires Elsass and his companies to advise their existing customers of the injunction’s terms, and to provide the Government with a list of all current customers.

In the past decade, the Justice Department’s Tax Division has obtained more than 500 injunctions to stop tax fraud promoters and tax return preparers. Information about these cases is available on the Department of Justice website at www.justice.gov/tax/taxpress2013.htm .

Related Materials:

United States v. Tobias H. Elsass, et. al.
Complaint for Permanent Injunction
Opinion and Order

David Kalai and  Nadav Kalai face additional charges after a federal grand jury in the Central District of California returned a second superseding indictment yesterday.  The  superseding indictment charged each with two counts of willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR).  In June 2012, the grand jury charged David Kalai, Nadav Kalai, and David Almog with conspiring to defraud the United States, the Department of Justice and Internal Revenue Service (IRS) announced today. 

As alleged in the June 2012 superseding indictment, David Kalai and Nadav Kalai were principals of United Revenue Service Inc. (URS), a tax preparation business with 12 offices located throughout the United States.  David Kalai worked primarily at URS’ former headquarters in Newport Beach, Calif., and later at URS’ location in Costa Mesa, Calif.  Nadav Kalai, who is David Kalai’s son, worked out of URS’ headquarters in Bethesda, Md., as well as URS locations in Newport Beach and Costa Mesa. David Almog was the branch manager of the New York office of URS and supervised tax return preparers for URS East Coast locations. 

U.S. citizens, resident aliens and legal permanent residents have an obligation to report to the IRS on Schedule B of the U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign country in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. They further have an obligation to report all income earned from the foreign financial account on the tax returns.  Separately, U.S. citizens, resident aliens and permanent legal residents with a foreign financial interest in, or signatory authority over, a foreign financial account worth more than $10,000 in a particular year, must also file a FBAR with the Treasury disclosing such an account by June 30 of the following year. 

The superseding indictment further alleged that the co-conspirators prepared false individual income tax returns which did not disclose the clients’ foreign financial accounts nor report the income earned from those accounts.  In order to conceal the clients’ ownership and control of assets and conceal the clients’ income from the IRS, the co-conspirators incorporated offshore companies in Belize and elsewhere and helped clients open secret bank accounts at the Luxembourg locations of two Israeli banks referred to as Bank A and Bank B in court documents.  Bank A is a large financial institution headquartered in Tel-Aviv, Israel, with branches worldwide.  Bank B is a mid-size financial institution headquartered in Tel-Aviv, with a worldwide presence on four continents.

The indictment also alleged, the co-conspirators incorporated offshore companies in Belize and elsewhere to act as named account holders on the secret accounts at the Israeli banks.  The co-conspirators then facilitated the transfer of client funds to the secret accounts and prepared and filed tax returns that falsely reported the money sent offshore as a false investment loss or a false business expense.  The co-conspirators also failed to disclose the existence of, and the clients’ financial interest in, and authority over, the clients’ secret accounts and caused the clients to fail to file FBARs with the Department of the Treasury.  

In addition to the earlier charges, yesterday’s superseding indictment alleges that David Kalai and Nadav Kalai each failed to file a FBAR for calendar years 2008 and 2009 concerning a foreign account held at Bank A in Luxembourg.  The second superseding indictment alleges that both David Kalai and Nadav Kalai had a financial interest, signature or other authority over a foreign financial account that had an aggregate value of more than $10,000 during 2008 and 2009.  

If convicted, each defendant faces a maximum of five years in prison for each count and a maximum fine of $250,000 for each count. The charges contained in the indictment are only allegations. The defendants are presumed innocent and it is the government’s burden to prove guilt beyond a reasonable doubt.

Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked Tax Division Trial Attorneys Christopher S. Strauss and Ellen M. Quattrucci, who prosecuted the case, and Assistant U.S. Attorney Sandra A. Brown of the U.S. Attorney’s Office for the Central District of California, who assisted with the prosecution.  The case was investigated by special agents of IRS – Criminal Investigation.                                             

Two Latino men associated with the Compton 155 street gang pleaded guilty today to federal hate crime charges related to a racially motivated attack on African-American juveniles at a residence in Compton, Calif. on New Year’s Eve.

Jeffrey Aguilar, 20, who uses the moniker “Terco,” and Efren Marquez Jr., 22, who is also known as “Stretch” and “Junior,” each pleaded guilty to violating the Matthew Shepard-James Byrd Hate Crime Prevention Act.     

Appearing before United States District Judge Terry J. Hatter Jr., Aguilar admitted that on Dec. 31, 2012, he and another individual physically attacked a 17-year-old African-American, who was walking down a street in the City of Compton.  Aguilar chased down and struck the victim in the head with a metal pipe.  During the incident, Marquez threatened to shoot another African-American juvenile who was present.  Both Aguilar and Marquez admitted that the attack on the 17-year-old victim was substantially motivated by his race and color.

“These juvenile victims were threatened and assaulted because of their race,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “Such intimidation and violence has no place in our society. The Justice Department will continue to vigorously prosecute those who commit such acts of hate.”

“The perpetrators of hate crimes hurt not only the individuals who are attacked, but also society as a whole,” said United States Attorney André Birotte Jr.  “For this reason, we are dedicated to working with our law enforcement partners to ensure that justice is brought to those who choose to commit such heinous crimes.”        

“Finding justice for victims of civil rights violations is among the most important responsibilities of FBI agents,” said Bill Lewis, Assistant Director for the FBI's Los Angeles Field Office.  “The success of this case is due to the shared goals and long-term cooperation between the Los Angeles Sheriff's Department and the FBI, and prosecutors at the Department of Justice.”    

“Hate crimes affect not only the victims, they also destroy our society’s democratic principles” said Sheriff Lee Baca of the Los Angeles Sheriff’s Department.  “Law enforcement is dedicated to protecting the civil rights of all members of our community. The success of this joint investigation sends a message that racially motivated crimes will not be tolerated.”         

Aguilar and Marquez are scheduled to be sentenced by Judge Hatter on Jan. 6, 2014.  At sentencing, each defendant will face a statutory maximum penalty of 10 years in federal prison.       

This case is the result of an investigation conducted by the FBI and the Los Angeles County Sheriff’s Department.  It is being prosecuted by Assistant U.S.  Attorney Reema El-Amamy of the Violent and Organized Crime Section of the U.S. Attorney’s Office and Trial Attorney Saeed Mody of the Civil Rights Division.