District Not Recorded

Brandon Shane Mundy, a former police officer of numerous law enforcement agencies, the most recent being the Town Creek, Ala., Police Department was sentenced today by U.S. District Court Judge R. David Proctor to serve five years in prison and three years of supervised release, and to pay $3,745 in restitution for violating the civil rights of a man during the course of an arrest.  Mundy previously pleaded guilty on April 25, 2013, to one count of willfully depriving the man of his constitutional right to be free from excessive force by a law enforcement officer acting under color of law.  According to information presented to the court, on Nov. 22, 2009, Mundy was involved in a vehicle pursuit and fired shots at a man’s vehicle before later ramming the vehicle and causing it to wreck in a ditch.  While another police officer reached the man and placed him under arrest without resistance, Mundy arrived and unjustifiably and repeatedly beat the man in the head with an object that was either a baton or a flashlight causing the man to suffer physical injury.  After Mundy lost control of the object, he continued to strike the man in the head with his fist.

“When law enforcement officers abuse their power and violate the civil rights of those in custody, they will be held accountable,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “The Justice Department will continue to vigorously prosecute those who cross the line to engage in acts of criminal misconduct.”

“Every police officer is sworn to serve and protect, and virtually all of them take that oath seriously.  This officer did not, and assaulted a citizen in violation of his oath,” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama.  “My office continues to aggressively prosecute police misconduct and takes a zero tolerance policy in this regard.”

This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Elizabeth Holt of the Northern District of Alabama and Civil Rights Division Trial Attorney Daniel H. Weiss.

A pastor and owner of a Los Angeles-area medical supply company was sentenced today for his role in a power wheelchair fraud scheme that defrauded Medicare out of more than $11 million.

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); Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office; and Special Agent in Charge Joseph Fendrick of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.

Charles Agbu, 58, of Carson, Calif., was sentenced by U.S. District Judge George H. Wu to serve 87 months in prison and was ordered to pay $5,788,725 in restitution to Medicare.  In December 2012, Agbu pleaded guilty to conspiracy and money laundering charges based on his role as owner and operator of Bonfee Inc., a fraudulent durable medical equipment (DME) supply company that Agbu operated with his daughter and co-defendant, Obiageli Agbu, and members of his family from a nondescript office building in Carson.  Agbu admitted that he paid patient recruiters and doctors to provide him with fraudulent prescriptions for expensive, highly specialized power wheelchairs and other DME that he, Obiageli Agbu and their co-conspirators used in submitting more than $11 million false claims to Medicare.  Agbu billed the power wheelchairs to Medicare at a rate of approximately $6,000 per wheelchair even though he paid approximately $900 wholesale per wheelchair.  In many cases, the Medicare beneficiaries to whom Agbu and his co-conspirators claimed they supplied the power wheelchairs and DME did not have any legitimate medical need for the medical equipment, and, in some cases, never received the medical equipment from Agbu’s company.  At the time Agbu engaged in this fraud, he was a pastor at Pilgrim Congregational Church in South Central Los Angeles. 

On Sept. 30, 2013, and Oct. 2, 2013, Agbu’s co-defendants, Alejandro Maciel, 43, of Huntington Park, Calif., and Dr. Emmanuel Ayodele, 65, of Los Angeles, were sentenced to serve 41 and 37 months in prison and ordered to pay $5,388,755 and $6,355,949 in restitution to Medicare, respectively.  Two other co-defendants, Dr. Juan Van Putten and Candelaria Estrada, have pleaded guilty to Medicare fraud charges and are scheduled for sentencing on Dec.12, 2013, and Oct. 31, 2013, respectively.  Obiageli Agbu was convicted by a jury on nine counts of conspiracy to commit health care fraud and health care fraud on July 19, 2013.  Her sentencing date has not been set.

The case is being investigated by the FBI, HHS-OIG and the California Department of Justice 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.  The case is being prosecuted by Trial Attorneys Jonathan T. Baum and Alexander Porter of the Criminal Division’s Fraud Section. 

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

Boston Scientific Corp. and its subsidiaries, Guidant LLC, Guidant Sales LLC and Cardiac Pacemakers Inc. (Guidant), have agreed to pay $30 million to settle allegations that, between 2002 and 2005, Guidant knowingly sold defective heart devices to health care facilities that in turn implanted the devices into Medicare patients, the Justice Department announced today.  Boston Scientific acquired Guidant, a medical device manufacturer, in 2006.

“Medicare patients who depend on cardiac defibrillators should not have to worry about whether their devices will work when they are needed,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “This settlement, along with the prior criminal prosecution of Guidant, demonstrates that there will be significant consequences when companies engage in conduct that threatens health and safety and violates the law.”

The Guidant devices at issue are implantable defibrillators, used in patients at risk of cardiac arrest due to an irregular heartbeat.  The devices are surgically implanted into patients’ chests, and when the devices detect an irregular heartbeat, they send an electrical pulse to the heart to “shock” it back to its normal rhythm.  The government’s complaint alleged that two lines of implantable cardiac devices manufactured and sold by Guidant, known as the Prizm 2 and the Renewal 1 and 2, contained a defect that resulted in “arcing.”  Arcing occurs when the device detects the irregular heartbeat and delivers a shock, but instead of the current traveling to the heart, the current “arcs” back to the device itself.  This causes the device to short circuit, rendering the device ineffective.

The government alleged that Guidant learned as early as April 2002 that the Prizm was defective, and as early as November 2003 that the Renewal 1 and 2 were similarly defective.  Nevertheless, although Guidant took corrective action to fix the defects, the company continued to sell its remaining stock of the old, defective versions of the devices.  The government alleged further that, as Guidant learned about the cause of the defect, it took steps to hide the problem from patients, doctors and the Food and Drug Administration (FDA).  Instead of disclosing the problem, Guidant issued a misleading communication to doctors regarding the nature of the defect and did not fully disclose the problem with the devices to doctors and the FDA until May 2005, after first being contacted by a New York Times reporter.  Subsequently, the company recalled the devices after a front-page article about the defects appeared in The New York Times.

“The United States is fortunate that innovative health care companies regularly develop and market remarkable medical devices that improve patients’ lives,” said John R. Marti, Acting U.S. Attorney for the District of Minnesota.  “But in this case, Guidant valued profits more than patient safety by selling defective cardiac defibrillators.  This office, along with several other components within the U.S. Department of Justice, will continue to vigorously investigate and take appropriate action against health care companies that place public safety at risk.”

In February 2010, Guidant pleaded guilty to criminal charges of misleading the FDA and failing to submit a labeling change to the FDA relating to the defective devices.  In 2011, the government joined a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act by James Allen, who had received one of the defective devices.  Under the Act, a private citizen, known as a “relator,” can sue on behalf of the government and share in any recovery.  As part of the resolution, Allen will receive $2.25 million. 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was handled by the Justice Department’s Civil Division, Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Minnesota, with assistance from the Department of Health and Human Services’ Office of Inspector General and Office of General Counsel and the FDA’s Office of Criminal Investigations and Office of Chief Counsel.

Except for the conduct admitted in connection with the criminal plea, the claims resolved today are allegations only, and there has been no determination of liability.  The civil case is United States ex rel. Allen v. Guidant LLC et al., No. 11-CV-22 (D. Minn.).

            A Canadian caught with more than 2600 stolen debit card numbers on his laptop computer was sentenced to five years in prison for access device fraud and aggravated identity theft, announced U.S. Attorney Jenny A. Durkan.  DENNIS NGUYEN, of Vancouver, B.C. Canada was sentenced by Chief U.S. District Judge Marsha J. Pechman on October 4, 2013.  NGUYEN was arrested in February 2013, after he traveled to Seattle to meet with some of the conspirators he used to make cash withdrawals using the stolen debit card numbers.  The investigation revealed the numbers had been stolen using “skimming” devices surreptitiously attached to point of sale machines in coffee shops in Vancouver, BC.

            The investigation revealed that NGUYEN directed various co-conspirators who would take the debit cards he manufactured with the stolen information and conduct rapid cash withdrawals from customer accounts at various ATMs in and around Seattle and Everett.  When two of the co-conspirators were arrested, law enforcement seized a bag containing $77,140 in cash, 460 counterfeit cards, seven burner cell phones, a cash counting machine, a magnetic card strip encoder, a label printer, and miscellaneous supplies associated with the mass card skimming operation.  When NGUYEN was arrested, his laptop computer, which he brought from British Columbia, contained over 2,600 bank card numbers linked to approximately 100 different financial institutions, both foreign and American.  Of those card numbers, approximately 463 were connected to fraudulent cards previously recovered in the case.

            The case was investigated by the U.S. Secret Service Electronic Crimes Task Force and was prosecuted by Assistant United States Attorney Steven Masada.

Two financial investors who purchased municipal tax liens pleaded guilty today for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of those tax liens, the Department of Justice announced.

A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, against Robert U. Del Vecchio Sr., of Hawthorne, N.J. According to the charge, from in or about 2000 until approximately December 2008, Del Vecchio Sr. participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on.  Additionally, a felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Michael Mastellone, of Cedar Knolls, N.J. for participating in a similar conspiracy from in or about 2000 until approximately February 2009.  The department said that Del Vecchio Sr. and Mastellone proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

“By conspiring to rig the bids of municipal tax liens, the conspirators profited at the expense of those already struggling financially,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “Protecting Americans from these types of bid-rigging schemes remains a high priority for the division.”

The department said the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates.  When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes.  If the taxes remain unpaid after a waiting period, the lien may be sold at auction.  State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption.  By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent.  If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

According to the court documents, Del Vecchio Sr. and Mastellone were involved in the conspiracy with others not to bid against one another at municipal tax lien auctions in New Jersey.  Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate.  Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the $1 million statutory maximum.

Today’s pleas are the 13th and 14th guilty pleas resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions.  Nine individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler and Norman T. Remick – and three companies –  DSBD LLC, Crusader Servicing Corp. and Mercer S.M.E. Inc. – have previously pleaded guilty as part of this investigation. 
 
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.

This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office.  Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.

A Pennsylvania man today admitted he conspired to defraud FIRSTPLUS Financial Group Inc. (FPFG), a Texas-based financial services company allegedly targeted for extortionate takeover and looting by a group led by alleged Lucchese organized crime family member Nicodemo S. Scarfo.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District of New Jersey made the announcement.

Cory Leshner, 30, pleaded guilty before U.S. District Judge Robert B. Kugler in a federal court in Camden, N.J., to a superseding information charging him with conspiracy to commit wire fraud. He faces a maximum of five years in prison when he is sentenced on Jan. 17, 2014.
 
According to documents filed in this case and statements made in court, Leshner and 12 others – including Scarfo, an alleged member of the Lucchese La Cosa Nostra (LCN) crime family, and Salvatore Pelullo, an alleged associate of the Lucchese and Philadelphia LCN families – were variously charged in a November 2011 indictment with a racketeering conspiracy that included acts of securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice.  The indictment charged that FPFG was targeted for extortionate takeover and looting by a group of the conspirators.  A substantial part of the enterprise’s activities occurred in New Jersey, including communications and the transfer of money into and out of the state.  Cory Leshner admitted that he joined the conspiracy in April 2007.

Leshner admitted that he assisted Scarfo and Pelullo in managing family trusts and limited liability companies as part of the scheme to defraud FPFG.  Pelullo directed Leshner in the use of various bank accounts through which Pelullo received hundreds of thousands of dollars between July 2007 and April 2008 as part of the scheme.  The money involved proceeds of the fraud that Pelullo allegedly received as part of a fraudulent “consulting” agreement between his shell company, Seven Hills Management, and codefendant William Maxwell, a Texas attorney who served as “special counsel” to FPFG as part of the scheme.  The money also involved proceeds received from the fraudulent sale of Scarfo and Pelullo’s worthless companies to FPFG in 2007.  The receipt of the fraudulent proceeds often occurred in the form of wire transfers from accounts in Pennsylvania to accounts in New Jersey.

According to his court statements, Leshner was a law student during the scheme.  Leshner graduated from law school in 2009 and became an attorney in Pennsylvania in 2011.  As part of his plea agreement, Leshner agreed to notify the Pennsylvania Supreme Court of his guilty plea and to accept any disciplinary action brought by disciplinary officials as a result of the guilty plea and sentence.  Leshner also agreed to not seek the reinstatement of his license to practice law while serving any sentence of imprisonment imposed in the case. 

Scarfo, Pelullo, and five other defendants charged in November 2011 – including attorneys William Maxwell, David Adler, Gary McCarthy, and Donald Manno, as well as John Maxwell – are scheduled for trial beginning Oct. 28, 2013.  Todd Stark, also charged in the indictment, previously pleaded guilty to providing ammunition to Scarfo and Pelullo, convicted felons.

This case was investigated by the FBI; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of the U.S. Securities and Exchange Commission. The case is being prosecuted by Trial Attorney Adam Small of the Organized Crime and Gang Section of the Justice Department’s Criminal Division and Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the New Jersey U.S. Attorney’s Office Organized Crime/Gangs Unit and Criminal Division in Camden.

With respect to the defendants awaiting trial, the charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

William Robert Hupman Jr., of Mebane, N.C., was sentenced to serve 17 months in prison followed by one year of supervised release for tax fraud today, the Justice Department and the Internal Revenue Service (IRS) announced.  Hupman was also ordered to pay restitution to the IRS of $103,420.

Hupman pleaded guilty on May 31, 2013, to corruptly endeavoring to obstruct or impede the due administration of the Internal Revenue laws.  According to court documents and court proceedings, Hupman managed and controlled Security Concepts LLC (SC), a security alarm company based in Mebane, N.C.  Instead of receiving a salary from SC, Hupman received income by using an SC debit card to pay his expenses.  Despite receiving over $770,000 in such fees between 2007 and 2011, Hupman has not filed an individual income tax return since tax year 2006. 

Court documents indicate that in addition to his failure to comply with his personal income tax responsibilities, Hupman also failed to comply with his employment tax responsibilities at SC.  As the person who managed and controlled SC, Hupman was responsible for withholding employment taxes and paying them over to the IRS on a periodic basis.  SC last paid over employment taxes and filed the required tax form for the third quarter of 2009, despite the fact that employment taxes were actually withheld from the wages of SC employees. Hupman did not pay employment taxes or file the required tax form for the fourth quarter of 2009 or any of the quarters in 2010 and 2011.  He also has not paid the federal unemployment taxes owed or filed the required tax form for years 2009, 2010 or 2011.  According to court documents and court proceedings, the criminal tax loss was $103,420.

Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Todd Ellinwood and Kevin Lombardi for prosecuting the case.

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

The Justice Department announced today that it intends to file a lawsuit against the State of North Carolina, the North Carolina State Board of Elections, and the Executive Director for the State Board of Elections over recent voting changes made by North Carolina House Bill 589, which was signed into law in August 2013.  The United States’ complaint challenges provisions of House Bill 589 under the non-discrimination requirements of Section 2 of the Voting Rights Act.

"By restricting access and ease of voter participation, this new law would shrink, rather than expand, access to the franchise,” said Attorney General Eric Holder.  “Allowing limits on voting rights that disproportionately exclude minority voters would be inconsistent with our ideals as a nation.  Whenever warranted by the facts and the law, the department will not hesitate to use the tools and legal authorities at our disposal to fight against racial discrimination, to stand against disenfranchisement, and to safeguard the right of every eligible American to cast a ballot."

The United States’ complaint contends that at least four provisions of House Bill 589 were adopted with the purpose, and will have the result, of denying or abridging the right to vote on account of race, color, or membership in a language minority group.  The complaint asks the court to prohibit North Carolina from enforcing these requirements, and also requests that the court order bail-in relief under Section 3(c) of the Voting Rights Act.  If granted, this would subject North Carolina to a new preclearance requirement.

House Bill 589 imposes a number of restrictions on voting that will deny or abridge the right of minority voters to participate in the political process.  Over the years, voter participation rates in North Carolina have steadily increased as the state adopted election practices and procedures that made voting more accessible to more voters.  In the November 2008 and November 2012 general elections, for example, African-American voters dramatically increased their participation rates and heavily relied on early voting in North Carolina.  In the November 2008 and November 2012 general elections, about 71 percent of all African Americans who cast ballots in North Carolina during those elections voted during the early voting period.

Although the prior system encouraged expanded voter participation, the state legislature chose in 2013 to adopt numerous barriers to voting and to eliminate voter-friendly practices.  Additionally, the state waited to adopt many of these changes until after the Supreme Court’s recent decision in Shelby County v. Holder, which held that certain jurisdictions, including 40 counties in North Carolina, were no longer required to obtain preclearance of voting changes prior to their implementation. 

The complaint cites several provisions of House Bill 589.  In particular, it cites:  the elimination of the first week of early voting, which reduces the total number of days of early voting (from 17 days to 10 days); the elimination of same-day voter registration during the early voting period; the prohibition on counting certain provisional ballots; and the failure to provide adequate safeguards for voters who lack the limited types of acceptable photo identification cards that will be required in future elections.  The first three changes are scheduled to take effect in 2014, and the last change will take effect in 2016. 

Based on the state’s own data, all four changes will have a discriminatory impact on minority voters, who disproportionately have relied on the first seven days of early voting, the same-day registration process and past practices regarding the counting of certain provisional ballots in order to participate in the elections process.  In addition, the State Board of Elections released a report earlier this year showing that African-Americans disproportionately lacked photo identification cards issued by the state’s Department of Motor Vehicles.  Despite knowledge of this report, the legislature adopted a strict photo identification requirement that lacks the types of protections for voters without identification that are common in other states that require voter identification.  Minority voters will disproportionately face obstacles and barriers to obtaining certain permitted photo identification cards that are now required to vote, and the State has failed to provide adequate protections to ensure that these voters will not be disenfranchised by the new law. 

“The right to vote is one of the sacred rights that we hold dear as a nation,” said Jocelyn Samuels, Acting Assistant attorney General for the Justice Department’s Civil Rights Division.  “The Department of Justice will use all the tools it has available to ensure that each citizen can cast a ballot free from discrimination.  North Carolina adopted these changes in a rushed process, despite evidence before the legislators that a number of these changes will harm minority voters.”

“The United States Attorneys for all three districts in North Carolina support today’s action to protect the rights of all eligible North Carolinians to exercise the right to vote free from discrimination,” said United States Attorney Ripley Rand of the Middle District of North Carolina.  “Anne Tompkins of the Western District, Thomas Walker of the Eastern District and I will ensure that our respective offices provide whatever support and assistance is needed to pursue this important voting rights case.”

If the federal court in this case finds that the State of North Carolina should be covered by Section 3(c), then the state would be required to submit voting changes to the U.S. Attorney General or to the federal court for review prior to implementation, to ensure that the changes do not have a discriminatory effect or a discriminatory purpose. 

 More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice’s website at www.justice.gov/crt/about/vot.  Complaints about discriminatory voting practices may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

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Complaint

The Justice Department announced today that it has filed a lawsuit against the manager and owner of the Linden House Apartments in Cleveland for refusing to rent apartments to families with children in violation of the federal Fair Housing Act. 

The complaint, filed in the U.S. District Court for the Northern District of Ohio names the management company responsible for Linden House Apartments, Zaremba Management Company Inc., the manager of Linden House Apartments, Katrina Ivanskis and the owner of the property, Linden Apartment Company.  It alleges that Zaremba and Ivanskis maintained a policy of refusing to rent units at Linden House to families with children.  It also alleges that the Linden House has a policy of evicting tenants or asking tenants to relocate if they have children while living at Linden House.

“Fighting illegal discrimination in housing is a top priority of the Justice Department,” said Jocelyn Samuels, Acting Assistant Attorney General for Civil Rights.  “We will vigorously enforce the Fair Housing Act to ensure families are not denied the home of their choice because they have children.”

The lawsuit seeks an order prohibiting the defendants from engaging in future unlawful discrimination.  It also seeks the payment of a civil penalty and monetary damages for the persons who were refused the opportunity to rent at Linden House because of familial status, or who were asked to leave Linden House because of familial status.

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.usdoj.gov/crt .  Individuals who believe that they have been victims of housing discrimination at Linden House or have other information related to this lawsuit can call the Justice Department at 1-800-896-7743 or e-mail the Justice Department at fairhousing@usdoj.gov.  Individuals who believe they have experienced housing discrimination elsewhere can contact the Justice Department at 1-800-896-7743 or fairhousing@usdoj.gov or contact the Department of Housing and Urban Development at 1-800-669-9777.

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

The Justice Department announced today that it has reached a settlement with the South Carolina Department of Corrections (SCDC) and its director, to resolve alleged violations of Title II of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973 (Section 504).  The agreement, filed today along with a complaint in the U.S. District Court for the District of South Carolina, resolves the department’s investigation of SCDC policies and practices of segregating inmates with HIV/AIDS (HIV) and denying them the opportunity to participate equally in services, programs and activities.

The department’s investigation found that, under policies implemented in the late 1990s, SCDC unnecessarily segregates all inmates with HIV in two of SCDC’s highest security prisons, regardless of their individual security classification.  There are currently approximately 350 male and female inmates with HIV who are segregated in SCDC’s highest security prisons solely on the basis of their HIV-positive status.  SCDC further segregates inmates with HIV to “HIV-only” dorms in these two high security prisons and the inmates are required to wear clothing and badges that identify their dorms and effectively disclose their HIV status to other inmates, correctional staff and visitors.  Because certain programs are not provided at the two prisons, inmates with HIV are unable to participate in a variety of SCDC’s programs, such as drug treatment, work release, pre-release preparation, intermediate psychiatric care and SCDC jobs that are available to other inmates without HIV.

“With this consent decree, SCDC joins 49 other state correctional systems that recognize that  individuals with HIV are entitled to equal treatment under the law.  Science and longstanding experience have demonstrated that HIV, alone, is not a basis for segregation from the general population without an individualized assessment of the inmate’s circumstances,” said Jocelyn Samuels Acting Assistant Attorney General for the Civil Rights Division,  “We applaud SCDC’s efforts to close this final chapter of illegal segregation of inmates based on HIV and, to instead commit to the integration of current and future inmates with HIV, based on their individual circumstances, individualized assessment and classification level.”

“I am proud that this office had the opportunity to work with the Department of Justice and the state of South Carolina in addressing this issue,” said William Nettles, U.S. Attorney for the District of South Carolina. “This consent decree will put us all on the right side of history.”

Title II of the ADA and Section 504 prohibit discrimination against people with disabilities, including people with HIV.  Discrimination includes unnecessary segregation of people with disabilities as well as excluding people with disabilities from programs or providing unequal access to people with disabilities.  While Title II of the ADA provides that public entities, such as correctional institutions, may impose legitimate safety requirements necessary for the safe operation of their services, programs or activities, the requirements must be based on actual risks, not on mere speculation, stereotypes, or generalizations about people with disabilities.  The Department of Justice found that SCDC’s segregation policies were based on generalizations and stereotypes about HIV, not on actual risks.  No other U.S. state prison system continues to segregate inmates based solely on their HIV positive status; in fact, a court recently invalidated an Alabama policy that, similar to that of South Carolina,  segregated inmates with HIV from the general population. 

Under the terms of the consent decree, SCDC and its director will implement policies prohibiting discrimination on the basis of disability, including HIV in particular.  SCDC will revoke all policies that separate or segregate inmates with HIV, solely on the basis of HIV and regardless of security classification status.  Additionally, inmates with HIV who are currently housed in the SCDC’s two high security prisons will have an opportunity to choose new housing options based on the SCDC’s classification system and without regard to HIV.

SCDC inmates with HIV will also have the opportunity to participate in any programs for which they are otherwise qualified such as drug treatment, work release, pre-release preparation, intermediate psychiatric care, youthful offender programs, re-entry and food service jobs in the cafeteria and canteen. Inmates with HIV who have already been segregated and denied such opportunities will be given priority access to those programs under a plan to be developed by SCDC.

To read the consent decree and complaint or for more information on the ADA and HIV, visit www.ada.gov/aids .   Those interested in finding out more about this settlement or the obligations of public entities under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov .  ADA complaints may be filed by email to ada.complaint@usdoj.gov .

The Justice Department filed a settlement agreement and order today that resolved allegations that Chevy Chase Bank F.S.B. engaged in a pattern or practice of discrimination against qualified African-American and Hispanic borrowers in its home mortgage lending from 2006 through 2009. 

The settlement, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Eastern District of Virginia. The complaint alleges that Chevy Chase Bank charged elevated prices on mortgage loans made to African-American and Hispanic borrowers in violation of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA).  Chevy Chase Bank was purchased in 2009 by Capital One, N.A. and Capital One is its successor in interest.   The United States’ claims relate solely to loans originated by Chevy Chase Bank and do not relate to any mortgage lending practices of Capital One.

“This settlement ensures that African-American and Hispanic borrowers who paid more for their mortgages as a result of Chevy Chase Bank’s actions will be properly compensated,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.  “We commend Capital One for working cooperatively with the Justice Department to reach this agreement.”

The lawsuit originated from a 2010 referral by the Office of the Comptroller of the Currency (OCC) to the Justice Department’s Civil Rights Division. 

“Every loan applicant should be evaluated on objective factors, and not on the basis of the color of their skin, so we are pleased that these illegal loan pricing practices are being remedied,” said Comptroller of the Currency Thomas J. Curry. “The OCC is committed to continuing to work with the Department of Justice and our other federal partners on an interagency basis to ensure fair treatment for everyone in the credit markets.”

Under the proposed settlement, Capital One will pay $2.85 million to approximately 3,100 African-American and Hispanic victims of discrimination.  The settlement requires borrowers who are eligible for compensation to be notified and provides for monitoring of the compensation process by the department. 

“Our office stands committed to ensuring justice and compensation to those who are victims of unfair lending practices,” said Dana J. Boente, Acting U.S. Attorney for the Eastern District of Virginia.  “Through our partnership with the Justice Department’s Civil Rights Division and our membership on the Financial Fraud Enforcement Task Force, we remain steadfastly committed to engaging in this important work.” 

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 28 lending matters under the Fair Housing Act, ECOA, and the Servicemembers Civil Relief Act.  The settlements in these matters provide for a minimum of $660 million in monetary relief for impacted communities and more than 300,000 individual borrowers.  The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications .

The Civil Rights Division, the U.S. Attorney’s Office for the Eastern District of Virginia, and the OCC are members of the 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 on the task force, visit www.StopFraud.gov .

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

The Justice Department announced it has filed a lawsuit today in the federal district court for the Western District of Michigan against the owners and manager of Alger Meadow Apartments in Grand Rapids, Mich., alleging that the manager has sexually harassed tenants in violation of the Fair Housing Act.

The lawsuit alleges that Dale VanderVennen, manager at Alger Meadow Apartments, has sexually harassed female residents at the complex.   The complaint alleges that such harassment has included unwelcome sexual advances, touching female residents without their consent, entering the apartments of female residents without permission and notice, granting and denying tangible housing benefits based on sex; and taking adverse actions against female tenants when they refused his sexual advances.

"No person should be subject to sexual harassment in their own home, especially when that harassment comes from someone who holds the key to the front door," said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.

“This office is committed to addressing civil rights violations and enforcing federal civil rights law” said Patrick A. Miles, Jr. U.S. Attorney for the Western District of Michigan.  “Women should not face this type of discrimination and harassment when making housing choices.”

The suit also names as defendants the owners and/or managers of Alger Meadow Apartments:  Jack VanderVennen, Linda VanderVennen, DDJ Rental Real Estate LLC, Calcutta Associates LLC, and LLJ LLC .

The suit seeks monetary damages to compensate the victims, a civil penalty and a court order barring future discrimination.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination at Alger Meadows or have other information about this matter can contact the Justice Department at 1-800-896-7743, option 5, or e-mail the Justice Department at fairhousing@usdoj.gov .   Persons who believe that they have experienced unlawful housing discrimination elsewhere can contact the Justice Department at 1-800-896-7743, or e-mail fairhousing@usdoj.gov , or contact the Department of Housing and Urban Development at 1-800-669-9777.

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

The Justice Department today announced that it has filed a lawsuit alleging that the Housing Authority for the City of Ruston, La., has engaged in a pattern or practice of discrimination against African-American tenants, in violation of the federal Fair Housing Act.  The Ruston Housing Authority is a public housing authority that provides housing for persons of low income in Ruston.  Currently, the Ruston Housing Authority owns and maintains five housing complexes in Ruston.

The complaint alleges that the Ruston Housing Authority maintained a racially segregated housing authority by steering and assigning applicants to its five complexes based on race, rather than in order of their placement on the Ruston Housing Authority’s waiting list.  The complaint also alleges that the Ruston Housing Authority’s discriminatory assignment practices have harmed dozens of applicants and tenants who were assigned to segregated housing or delayed housing because of their race. 

“Access to housing free from racial discrimination is everyone’s right, including those who seek public housing assistance,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.  “The department will continue its vigorous enforcement of the Fair Housing Act.” 

“The United States Attorney’s Office is committed to addressing unlawful discriminatory practices and enforcing anti-discrimination laws,” said Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana.  “Today’s filing is an example of our continuing efforts to end discrimination.” 

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.   Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov, or contact the Department of Housing and Urban Development at 1-800-669-9777.

WASHINGTON — A New Jersey jury convicted a former project manager for his central role in conspiracies that spanned seven years and involved kickbacks in excess of $1.5 million at two Environmental Protection Agency (EPA) Superfund sites in New Jersey, the Department of Justice announced today.  The jury returned guilty verdicts on 10 counts charged in the indictment against Gordon D. McDonald, which was filed on Aug. 31, 2009.  
In addition to today’s conviction, to date, eight individuals and three companies have pleaded guilty to charges arising out of this investigation. 

After a two-week trial, McDonald, a former project manager for a prime contractor, was convicted of engaging in separate bid-rigging, kickback and/or fraud conspiracies with three subcontractors at two New Jersey Superfund sites – Federal Creosote in Manville, N.J., and Diamond Alkali in Newark, N.J.  He was also convicted of engaging in an international money laundering scheme, major fraud against the United States, accepting illegal kickbacks, committing two tax violations and obstruction of justice.  The various conspiracies took place at different time periods from approximately December 2000 until approximately April 2007.  McDonald was acquitted on counts eight and nine involving certain fraud and kickback charges.

“Today’s guilty verdict sends a clear message that corrupt purchasing officials will be held accountable for engaging in fraudulent schemes designed to undermine the government’s competitive contracting practices,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The Antitrust Division is committed to ensuring there is fair play and competition in our markets.”

As part of the conspiracies, McDonald and co-conspirators at his former company accepted kickbacks from sub-contractors in exchange for the award of sub-contracts at Federal Creosote.  McDonald provided co-conspirators at Bennett Environmental Inc., a Canadian-based company that treats and disposes of contaminated soil, with bid prices of their competitors, which allowed them to submit higher bid prices and still be awarded the sub-contracts.  In exchange for McDonald’s assistance, Bennett Environmental, Inc. provided him with over $1.5 million in kickback payments.

According to court documents, McDonald also accepted kickbacks in exchange for the award of sub-contracts at the Federal Creosote and Diamond Alkali sites from the owner of JMJ Environmental Inc., a wastewater treatment and chemical supply company, and the co-owner of National Industrial Supply LLC, an industrial pipes supplier.  He participated in a conspiracy with the owner of JMJ and co-conspirators to rig bids and allocate sub-contracts at inflated prices for wastewater treatment supplies and services at Federal Creosote. 

The cleanup at Federal Creosote was primarily funded by the EPA.  An interagency agreement between the EPA and the U.S. Army Corps of Engineers designated that the U.S. Army Corps of Engineers hire the prime contractors at Federal Creosote.  According to a settlement with the EPA and the New Jersey Department of Environmental Protection, Tierra Solutions was required to fund remedial action and maintenance of Diamond Alkali.  Tierra Solutions hired the prime contractor for the remedial action and maintenance of Diamond Alkali. 

Sentencing is scheduled for Jan. 6, 2014, before Judge Susan D. Wigenton.  To date, more than $6 million in criminal fines and restitution have been imposed, and five individuals have been sentenced to serve more than 10 years in total prison time. 
 
Today’s conviction is the result of an ongoing federal antitrust investigation being conducted by the Antitrust Division’s New York Office, the EPA Office of Inspector General and the Internal Revenue Service-Criminal Investigation.  Anyone with information concerning bid rigging, kickbacks, tax offenses or fraud relating to subcontracts awarded at the Federal Creosote Superfund site or Diamond Alkali Superfund site should contact the Antitrust Division’s New York Office at 212-335-8000 or visit www.justice.gov/atr/contact/newcase.htm.

A former owner of a Los Angeles medical equipment supply company has been indicted for allegedly engaging in a $4 million Medicare 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.

Valery Bogomolny, 41, of Los Angeles, Calif., was indicted in the Central District of California on six counts of health care fraud, each of which carries a maximum penalty of 10 years in prison upon conviction. Bogomolny was taken into custody on Sept. 27, 2013, and the indictment was unsealed following his initial appearance in federal court that afternoon.

According to court documents, Bogomolny was the owner and president of Royal Medical Supply, a durable medical equipment (DME) supply company located in Los Angeles.  From approximately January 2006 through October 2009, he allegedly engaged in a scheme to commit health care fraud through the operation of Royal by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and submitting false and fraudulent claims to Medicare.  Court documents allege that Bogomolny knew the prescriptions and medical documents were fraudulent and that some of the beneficiaries did not receive the DME, yet he certified to Medicare with the submission of each claim that the DME was received and was medically necessary. 

Bogomolny, through Royal, allegedly submitted approximately $4 million in fraudulent claims to Medicare for power wheelchairs and related services, and Medicare paid Royal approximately $2.7 million on those claims.

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 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 is being prosecuted by Trial Attorney Fred Medick 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.

The former owner of a Los Angeles medical clinic management company has been indicted for his role in a $13 million scheme to defraud Medicare.

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, and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.

Mikran “Mike” Meguerian, 36, of Glendale, Calif., was indicted in the Central District of California on one count of conspiracy to commit health care fraud and five counts of health care fraud, each of which carries a maximum penalty of 10 years in prison upon conviction. Meguerian was arrested on Sept. 26, 2013, and the indictment was unsealed following his initial appearance in federal court on Sept. 27, 2013.

According to court documents, Meguerian owned Med Serve Management, a medical clinic management company located in Van Nuys, Calif.  From approximately 2006 through February 2009, he allegedly engaged in a conspiracy to commit health care fraud, in part through the operation of Med Serve.  According to court documents, Meguerian oversaw several medical clinics that generated prescriptions and other medical documents for medically unnecessary power wheelchairs and other durable medical equipment (DME).  Meguerian and his co-conspirators then sold the prescriptions to DME supply companies, knowing that the prescriptions were fraudulent.  Court documents allege that, based on these fraudulent prescriptions, the DME supply companies then submitted false and fraudulent claims to Medicare. 

Court documents allege that fraudulent prescriptions from Meguerian’s clinics were instrumental in generating approximately $13.6 million in fraudulent claims to Medicare, and Medicare paid approximately $7.6 on those claims.

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

The case was investigated by the FBI 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 is being prosecuted by Trial Attorneys Fred Medick and Blanca Quintero 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.

A former residential sales manager of a Florida property management company was sentenced to serve 24 months in prison today in the U.S. District Court for the Middle District of Florida, in Orlando, for his participation in a wire fraud scheme involving housing repair contracts for the U.S. Department of Veterans Affairs (VA), the Department of Justice announced.

Ryan J. Piana pleaded guilty on July 16, 2013, to two wire fraud counts of a 10-count indictment. In addition to his prison sentence, U.S. District Court Judge Roy B. Dalton Jr. also sentenced Piana to pay $147,285 in restitution to the VA.

The indictment, originally filed in January 2012, in the U.S. District Court for the Northern District of Illinois, in Rockford, charged Piana, Ronald B. Hurst and Bryant A. Carbonell with conspiring to commit bribery and wire fraud from beginning at least as early as January 2006 continuing until as late as September 2007.  Piana, Hurst and Carbonell were also charged with bribery and wire fraud.  As part of the plea agreement, the United States agreed to dismiss the remaining counts against Piana at the time of his sentencing.

 “Steering contracts to a company in return for kickbacks distorts the competitive process and harms consumers,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The Antitrust Division will not tolerate anticompetitive activity that defrauds the Department of Veterans Affairs.”

Piana is a former residential sales manager at West Palm Beach, Fla.-based Ocwen Loan Servicing LLC, and Hurst and Carbonell are former contractors for Ocwen.  According to court documents, Ocwen managed foreclosed properties under contract with the VA, which guaranteed qualifying residential mortgages for veterans.  Under the contract between the VA and Ocwen, if a veteran defaulted, Ocwen completed necessary repairs and re-sold the property.  Proceeds from the re-sale of VA-acquired properties directly benefit the VA by reducing the cost of guaranteeing residential mortgages to veterans.

According to the charges, Hurst and Carbonell paid Piana to steer housing repair work to companies affiliated with Hurst and Carbonell.  Piana recruited other Ocwen employees into the scheme and paid them on behalf of himself and the other conspirators.  The department said in order to execute the scheme, the conspirators sent, or caused to be sent, various transmissions via wire communication.

Carbonell pleaded guilty to the wire fraud counts on Sept. 21, 2012.  Hurst pleaded guilty to the same counts on Feb. 15, 2013.  Both Hurst and Carbonell entered their guilty pleas in the U.S. District Court in Rockford. Their sentencing dates are scheduled for Dec. 5 and 6, 2013, respectively.

This is the third case involving properties managed by Ocwen under contract with the VA. On Dec. 3, 2010, Benjamin K. Graves, also a former Ocwen employee, pleaded guilty in U.S. District Court in Orlando to wire fraud in connection with the VA contract.  On Jan. 25, 2012, Joshua R. Nusbaum, another a former Ocwen employee, and Andrew J. Nusbaum, a former Ocwen contractor, pleaded guilty in U.S. District Court in Orlando to wire fraud in connection with the same VA contract.

The sentence announced today resulted from an ongoing federal investigation of housing repair contracts performed under contract with the VA.  The investigation is being conducted by the Antitrust Division’s Chicago Office and the Central Field Office of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, located in Hines, Ill.  Anyone with information concerning suspicious activity relating to housing repairs performed under a contract with the VA should contact the Antitrust Division’s Chicago Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.

WASHINGTON – El Departamento de Justicia presentó un acuerdo conciliatorio y orden hoy que resolvieron alegatos de que Chevy Chase Bank F.S.B. exhibió un patrón o práctica de discriminación contra prestatarios calificados afroestadounidenses o hispanos en sus préstamos hipotecarios para la vivienda desde el 2006 hasta el 2009.

El acuerdo conciliatorio, que está sujeto a aprobación del tribunal, fue presentado junto con la demanda del Departamento de Justicia en el Tribunal Federal de Distrito del Distrito Este de Virginia. La demanda alega que Chevy Chase Bank cobró precios elevados en préstamos hipotecarios hechos a prestatarios afroestadounidenses e hispanos en violación con la Ley de Vivienda Justa [Fair Housing Act (FHA)] y la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)]. Chevy Chase Bank fue adquirido en 2009 por Capital One, N.A., y Capital One es su sucesor en interés. Las reclamaciones de los Estados Unidos se relacionan únicamente con préstamos originados por Chevy Chase Bank y no se relacionan con ninguna práctica de préstamos hipotecarios de Capital One.

"Este acuerdo conciliatorio asegura que los prestatarios afroestadounidenses e hispanos que pagaron más por sus hipotecas como resultado de las acciones de Chevy Chase Bank sean compensados correctamente", dijo Jocelyn Samuels, Secretaria de Justicia Auxiliar Interina de la División de Derechos Civiles del Departamento. "Felicitamos a Capital One por trabajar en cooperación con el Departamento de Justicia para llegar a este acuerdo".

La demanda se originó en una remisión del 2010 a la División de Derechos Civiles del Departamento de Justicia por parte de la Oficina del Controlador de la Moneda [Office of the Comptroller of the Currency (OCC)].

"Todos los solicitantes de préstamos deben ser evaluados según factores objetivos, no según el color de su piel, por lo tanto, nos complace que se estén remediando estas prácticas ilegales de fijación de precios de préstamos", dijo el Controlador de la Moneda Thomas J. Curry. "La OCC está comprometida a seguir trabajando con el Departamento de Justicia y nuestros otros asociados federales a nivel interagencial para garantizar el tratamiento justo de todos los participantes en los mercados crediticios".

Bajo el acuerdo conciliatorio propuesto, Capital One pagará 2.85 millones de dólares a aproximadamente 3,100 víctimas de discriminación afroestadounidenses e hispanas. El acuerdo conciliatorio exige que se notifique a los prestatarios elegibles para recibir compensación y establece el monitoreo del proceso de compensación por parte del departamento.

"Nuestra oficina sigue comprometida a garantizar la justicia y la compensación a quienes son víctima de prácticas injustas en los préstamos", dijo Dana J. Boente, Fiscal Federal Interina para el Distrito Este de Virginia. "A través de nuestra asociación con la División de Derechos Civiles del Departamento de Justicia y nuestra participación como miembros en la Fuerza de Tarea de Coacción contra el Fraude Financiero, seguimos comprometidos firmemente a realizar esta labor tan importante".

La coacción asociada a las leyes de otorgamiento justo de préstamos por parte del Departamento de Justicia es llevada a cabo por la Unidad de Préstamos Justos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles. Desde que se estableció la Unidad de Préstamos Justos en febrero del 2010, ésta ha entablado o resuelto 28 casos de préstamos bajo la Ley de Vivienda Justa, la ECOA y la Ley de Alivio Civil para los Miembros de las Fuerzas Armadas [Servicemembers Civil Relief Act]. Los acuerdos conciliatorios en estos casos proveen un mínimo de 660 millones de dólares en asistencia monetaria para comunidades impactadas y más de 300,000 prestatarios individuales. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso abajo ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications/.

La División de Derechos Civiles, la Fiscalía Federal para el Distrito Este de Virginia y la OCC son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero. El Presidente Obama fundó la Fuerza de Tarea de Coacción contra el Fraude Financiero para generar una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de agencias federales, autoridades regulatorias, inspectores generales y fuerzas del orden público estatales y locales quienes, trabajando juntos, ponen en uso un conjunto poderoso de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar las iniciativas en todo el poder ejecutivo federal y, junto con asociados estatales y locales, investigar y enjuiciar delitos financieros importantes, garantizar un castigo justo y eficaz para quienes cometen delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar ganancias para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.

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

Two Miami-area residents were indicted in connection with their alleged participation in a $190 million Medicare fraud scheme.

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

Mayelin Santoyo, 28, and Jose Martin Olivares, 36, were each charged with one count of conspiracy to defraud the United States and to receive illegal health care kickbacks, and two counts of receiving health care kickbacks.  Each charge carries a maximum penalty of five years in prison upon conviction.

According to the indictment, the scheme that Santoyo and Olivares allegedly participated in lasted from approximately February 2006 to October 2010.  The scheme was orchestrated by the owners and operators of American Therapeutic Corporation (ATC) and its management company, Medlink Professional Management Group Inc. (Medlink).  ATC and Medlink were Florida corporations headquartered in Miami. ATC operated purported partial hospitalization programs (PHPs), a form of intensive treatment for severe mental illness, in seven different locations throughout South Florida and Orlando.  Both corporations have been defunct since their owners were arrested in October 2010. 

The indictment alleges that Santoyo and Olivares served as patient brokers who provided ineligible patients to ATC in exchange for kickbacks in the form of checks and cash. The amount of the kickback was based on the number of days each recruited patient spent at ATC.  Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services and who attended treatment programs that were not legitimate PHPs so that ATC could bill Medicare for the medically unnecessary services. According to court filings, to obtain the cash required to support the kickbacks, the co-conspirators laundered millions of dollars of payments from Medicare.

ATC, Medlink, and various owners, managers, doctors, therapists, patient brokers and marketers of ATC and Medlink have pleaded guilty or have been convicted at trial.  In September 2011, ATC owner Lawrence Duran was sentenced to 50 years in prison for his role in orchestrating and executing the scheme to defraud Medicare.

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

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

Today, the U.S. Departments of Justice and Education released new guidance that provides colleges and universities with information about the ruling in Fisher v. University of Texas-Austin, and reiterates the Departments’ position on the voluntary use of race to achieve diversity in higher education.  The guidance is the first time the Departments have provided policy clarification on the use of race in higher education since the U.S. Supreme Court decision in June.

The guidance explains that the court preserved the well-established legal principle that colleges and universities have a compelling interest in achieving the educational benefits that flow from a racially and ethnically diverse student body and can pursue that interest in their admissions programs if they do so in lawful ways.  The educational benefits of diversity, long recognized by the court and affirmed in research and practice, include cross-racial understanding and dialogue, the reduction of racial isolation and the breaking down of racial stereotypes.

“The educational benefits of diversity are critically important to the future of this nation,” U.S. Attorney General Eric Holder said in response to the Supreme Court ruling in June.  “As the Court has repeatedly recognized, diverse student enrollment promotes understanding, helps to break down racial stereotypes, enables students to better understand people of different races, and prepares all students to succeed in, and eventually lead, an increasingly diverse workforce and society.”

“As the Court has repeatedly recognized, a diverse student enrollment promotes cross-racial understanding and dialogue, reduces racial isolation, and helps to break down stereotypes,” U.S. Secretary of Education Arne Duncan said in response to the Supreme Court ruling in June.  “This is critical for the future of our country because racially diverse educational environments help to prepare students to succeed in an increasingly diverse workforce and society.”

The Departments of Justice and Education strongly support diversity in higher education.  Racially diverse educational environments help to prepare students to succeed in our increasingly diverse nation.  The future workforce of America must be able to transcend the boundaries of race, language and culture as our economy becomes more globally interconnected. 

In 2011, the Departments issued “Guidance on the Voluntary Use of Race to Achieve Diversity in Postsecondary Education” and the related “Guidance on the Voluntary Use of Race to Achieve Diversity and Avoid Racial Isolation in Elementary and Secondary Schools.”  Both guidance documents remain in effect after the Fisher decision and are available at www.ed.gov and www.usdoj.gov .

At a panel discussion this morning at the U.S. Department of Justice, higher education leaders will join Catherine E. Lhamon, Assistant Secretary for Civil Rights for the U.S. Department of Education, and Jocelyn Samuels, Acting Assistant Attorney General for Civil Rights for the U.S. Department of Justice, to discuss the new guidance, the importance of creating and supporting diversity on college campuses, and the parameters for using race in admissions as stated by the U.S. Supreme Court in Fisher v. University of Texas at Austin.

For more information about the Department of Education's Office for Civil Rights, please visit http://www2.ed.gov/about/offices/list/ocr/index.html .  For more information about the Educational Opportunities Section of the Department of Justice's Civil Rights Division, please visit http://www.justice.gov/crt/edo/ .

The Justice Department announced today that it has reached an agreement with Paramount Staffing, a staffing company based in Northbrook, Ill., resolving an allegation that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA) by requesting more or different documents from individuals during the employment eligibility verification processes based on the individuals’ citizenship status. 

The department’s investigation concluded that Paramount Staffing’s Hanover Park, Ill., branch routinely required specific, DHS-issued documentation from lawful permanent residents for the employment eligibility verification processes (Form I-9 and E-Verify) while not making similar demands of U.S. citizens.  The anti-discrimination provision of the INA prohibits employers from using discriminatory documentary policies, procedures or requirements based on citizenship status or national origin when initially determining or subsequently re-verifying an employee’s authorization for employment.

Paramount Staffing cooperated with the department’s investigation and has agreed to pay $21,100 in civil penalties to the United States, undergo Justice Department training on the anti-discrimination provision of the INA, and be subject to monitoring of its employment eligibility verification practices for a period of 18 months.  The case settled prior to the filing of a complaint.

“The INA’s anti-discrimination provision requires employers to treat individuals in a nondiscriminatory manner during the employment eligibility verification processes,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights.  “We commend Paramount Staffing for taking immediate steps to rectify the issues raised in the department’s investigation.” 

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 (1-800-237-2515, TTY for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, 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

The Justice Department announced today that it reached an agreement yesterday with International Business Machines Corporation (IBM) resolving allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA) when it placed online job postings for application and software developers that contained citizenship status preferences for F-1 and H-1B temporary visa holders.  F-1 visas are issued to foreign students studying in the United States, and H-1B visas are issued to foreign nationals with technical expertise in specialized fields.  

Under the INA, employers may not discriminate on the basis of citizenship status unless required to comply with law, regulation, executive order or government contract.  Although IBM’s job postings were for positions that would ultimately require the successful candidate to relocate overseas, the anti-discrimination provision of the INA does not permit employers to express or imply a preference for temporary visa holders over U.S. workers, such as U.S. citizens and lawful permanent residents, for any employment opportunity in the United States.

Under the settlement agreement, IBM has agreed to pay $44,400 in civil penalties to the United States.  IBM further agreed to revise its hiring and recruiting procedures and train its human resources personnel to ensure compliance with the INA, and to be subject to reporting requirements for a period of two years.

“Employers must give all eligible candidates the equal opportunity to compete for employment,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “The department is committed to ensuring employers do not unlawfully discriminate against U.S. citizens and other work-authorized individuals based on their citizenship status.”

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 OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TTY for hearing impaired), call 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/crt/about/osc/webinars.php ; email osccrt@usdoj.gov ; or visit OSC’s website at www.justice.gov/crt/about/osc .

The Justice Department announced today that Plaza Home Mortgage Inc. (Plaza) of San Diego will pay $3 million to aggrieved borrowers as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of race and national origin. 

The settlement also requires Plaza to establish race- and national origin-neutral standards for the assessment of broker fees, monitor its wholesale mortgage loans for potential disparities based on race and national origin, conduct fair lending training and continue to operate a community enrichment program designed to address the lack of affordable housing and lending products in minority and underserved communities nationwide. 

The settlement, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Southern District of California.  The complaint alleges that Plaza charged thousands of African-American and Hispanic borrowers higher fees than white borrowers on wholesale mortgage loans in violation of the Fair Housing Act (FHA) and Equal Credit Opportunity Act (ECOA).  Plaza cooperated fully with the Justice Department’s investigation into its lending practices and agreed to settle this matter without contested litigation.  

“Today’s settlement demonstrates that the Civil Rights Division is committed to ensuring that all lenders, including wholesale lenders, comply with the fair lending laws,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.  “We commend Plaza for working cooperatively with the Justice Department in reaching an appropriate resolution of this case.”

The lawsuit originated from a 2011 referral by the Federal Trade Commission (FTC) to the Justice Department’s Civil Rights Division. 

The proceeds of the settlement will be used to compensate the African-American and Hispanic victims of Plaza’s alleged discrimination.  The proposed settlement provides for an independent administrator to contact and distribute payments at no cost to borrowers whom the Justice Department identifies as victims.  Borrowers who are eligible for compensation will be contacted by the administrator.  The department will make a public announcement and post contact information on its website once the administrator begins contacting victims. 

“It is patently wrong for a lending institution to require African-American and Hispanic homebuyers to pay more for their mortgages than white borrowers,” said Laura Duffy, U.S. Attorney for the Southern District of California.  “We are happy to be able to make this right for the victims, and to send a message that we will protect people of all races and national origins from injustice of any kind.”

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 27 lending matters under the FHA, ECOA  and the Servicemembers Civil Relief Act.  The settlements in these matters provide for a minimum of $660 million in monetary relief for impacted communities and more than 300,000 individual borrowers.  The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/

The Civil Rights Division, the U.S. Attorney’s Office for the Southern District of California, and the FTC are members of the 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 on the task force, visit www.StopFraud.gov

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

WASHINGTON - El Departamento de Justicia anunció hoy que Plaza Home Mortgage Inc. (Plaza) de San Diego pagará 3 millones de dólares a prestatarios agraviados como parte de un acuerdo conciliatorio en resolución de alegatos de que exhibió un patrón o una práctica de discriminación basada en raza y origen nacional.

El acuerdo conciliatorio también exige que Plaza establezca normas neutrales asociadas con la raza y el origen nacional para el cobro de honorarios de corredores, controle si sus préstamos hipotecarios mayoristas presentan posibles disparidades basadas en raza y origen nacional, lleve a cabo capacitación en el otorgamiento justo de préstamos y mantenga en marcha un programa de enriquecimiento comunitario diseñado para ocuparse del tema de la falta de viviendas económicas y productos crediticios en comunidades minoritarias y marginadas en todo el país.

El acuerdo conciliatorio, que está sujeto a aprobación del tribunal, fue presentado junto con la demanda del Departamento de Justicia en el Tribunal Federal de Distrito del Distrito Sur de California. La demanda alega que Plaza cobró a miles de prestatarios afroestadounidenses e hispanos cargos más altos que a prestatarios blancos en préstamos hipotecarios mayoristas, en violación de la Ley de Vivienda Justa [Fair Housing Act (FHA)] y la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)]. Plaza cooperó plenamente con la investigación del Departamento de Justicia de sus prácticas de otorgamiento de préstamos y aceptó realizar este acuerdo sin litigio contencioso.

"El acuerdo conciliatorio de hoy demuestra que la División de Derechos Civiles se compromete a asegurar que todos los prestamistas, lo que incluye a los prestamistas mayoristas, cumplan con las leyes de otorgamiento justo de préstamos", señaló Jocelyn Samuels, Secretaria de Justicia Auxiliar Interina de la División de Derechos Civiles del Departamento de Justicia. "Felicitamos a Plaza por su colaboración con el Departamento de Justicia para lograr una resolución adecuada del caso".

La demanda se originó en una remisión de 2011 a la División de Derechos Civiles del Departamento de Justicia por parte de La Comisión Federal de Comercio [Federal Trade Commission (FTC)].

El producto del acuerdo conciliatorio se utilizará para indemnizar a las víctimas afroestadounidenses e hispanas de la supuesta discriminación por parte de Plaza. El acuerdo conciliatorio propuesto dispone que un administrador independiente se comunique con prestatarios identificados como víctimas por el Departamento de Justicia y distribuya a los mismos pagos de indemnización sin ningún costo. Los prestatarios que reúnan los requisitos para recibir compensación serán contactados por el administrador. El Departamento realizará un anuncio público y publicará información de contacto en su portal en Internet una vez que el administrador comience a comunicarse con las víctimas.

"Está claramente mal que una institución de préstamos exija que compradores de vivienda afroestadounidenses e hispanos paguen más por sus hipotecas que los prestatarios blancos", indicó Laura Duffy, Fiscal Federal para el Distrito Sur de California. "Nos complace poder corregir esto para las víctimas, y transmitir el mensaje de que protegeremos a personas de todas las razas y orígenes nacionales contra injusticias de cualquier tipo".

La coacción asociada a las leyes de otorgamiento justo de préstamos por parte del Departamento de Justicia es llevada a cabo por la Unidad de Préstamos Justos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles. Desde que se estableció la Unidad de Préstamos Justos en febrero de 2010, ésta ha entablado o resuelto 27 casos de préstamos bajo la FHA, la ECOA y la Ley de Alivio Civil para los Miembros de las Fuerzas Armadas [Servicemembers Civil Relief Act]. Los acuerdos conciliatorios en estos casos proveen un mínimo de 660 millones de dólares en asistencia monetaria para comunidades impactadas y más de 300,000 prestatarios individuales. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso acerca de ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications/.

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

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

The Department of Justice Office of Community Oriented Policing Services (COPS) today announced funding awards to 263 cities and counties, aimed at creating 937 law enforcement positions.  More than $125 million will be awarded nationally, including nearly $45 million to fund 356 new school resource officer positions. 

The list of this year’s grantees includes Oakland, Sacramento, and Alameda County, Calif.; Houston; Hartford, Conn.; Des Moines, Iowa; Milwaukee; Richland County and Charleston, S.C.; Louisville, Ky.; Akron, Ohio; Seattle, and more. 

“In the wake of past tragedies, it's clear that we need to be willing to take all possible steps to ensure that our kids are safe when they go to school,” said Attorney General Eric Holder. “These critical investments represent the Justice Department's latest effort to strengthen key law enforcement capabilities, and to provide communities with the resources they need to protect our young people. Especially in a time of increased challenges and limited budgets, our top priority must always be the safety and well-being of our children.”

“The COPS Office is pleased to assist local law enforcement agencies throughout the country address their most critical public safety issues,” said Joshua Ederheimer, Acting Director of the COPS Office.  “Funding from this year’s program will allow many cities and counties to apply new sworn personnel to issues related to violent crime, property crime and school safety.”

The COPS Hiring Program offers grants to state, local and tribal law enforcement agencies to hire or rehire community policing officers.  The program provides the salary and benefits for officer and deputy hires for three years.

Grantees for the 2013 hiring program were selected based on their fiscal needs, local crime rates, and their community policing plans.  There was an additional focus this year on agencies requesting assistance in developing school safety programs that would include the hiring of a school resource officer.  School resource officer positions funded by the COPS Office are sworn law enforcement positions that work within a school district or facility, interacting directly with school administrators and students.   

“The Administration put a focus on school safety at the start of this year and we’ve worked to coordinate a program that offers valuable resources to assist local law enforcement in these efforts and many others,” said Acting Director Ederheimer. 

The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of approximately 125,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance.

For the entire list of grantees and additional information about the 2013 COPS Hiring Program, visit the COPS website at www.cops.usdoj.gov.

Justice Department officials along with other senior officials from the Administration yesterday convened the third annual National Summit on Preventing Youth Violence to share strategies on how to prevent and reduce violence and gang activity and improve opportunities for young people.

The summit brings together teams of mayors, police chiefs, educators, public health officials and youth from the 10 cities of the National Forum on Youth Violence Prevention. Representatives from the faith-based and philanthropic community and other communities involved in federal youth violence initiatives were also in attendance at the two-day summit, which is convened regularly as part of the ongoing work of the National Forum on Youth Violence.

“As a father, it is heartbreaking to know that the majority of America’s children – more than 60 percent of them – have been exposed to crime, violence, or abuse as victims or as witnesses.  Far too many young people continue the cycle of violence by harming others,” said Attorney General Eric Holder. “That’s why the Obama Administration, led in part by this Justice Department, launched the National Summit on Preventing Youth Violence.  Together, in each of our Forum cities, we are rallying local stakeholders to improve law enforcement, increase support for violence prevention efforts and expand access to family and social services.”

The forum’s 10 participating cities, Boston; Camden, N.J.; Chicago; Detroit; Memphis, Tenn.; Minneapolis; New Orleans; Philadelphia; Salinas, Calif. and San Jose, Calif., will receive more than $2 million total from the Departments of Justice and Education to continue implementing their comprehensive youth violence prevention strategies. In addition, the Justice Department is providing almost $16 million to reduce the impact of violence on child victims and witnesses and to implement other community violence prevention programs. 

“Early exposure to violence can have a devastating impact on our children, and its consequences are felt by all of us, in higher healthcare and criminal justice costs, broken families, distressed communities and the potential loss of a future generation of leaders,” said Assistant Attorney General Karol V. Mason. “We are using research to counter the effects of violence and working closely with our federal and local partners to get kids into safe and supportive environments and back on track developmentally.”

Teams from Camden, Minneapolis, New Orleans and Philadelphia unveiled their comprehensive plans to address youth violence using not only enforcement but also prevention, intervention and reentry strategies.  The summit agenda included panel discussions on the roles of public health and media in youth violence prevention, as well as a series of breakout sessions on a range of topics such as youth employment, street outreach programs, youth mental health services, law enforcement responses to children exposed to violence and community partnerships.

The forum was launched in 2010 at the direction of President Obama, with the Department of Justice, under Attorney General Holder, providing key support. The Departments of Justice, Education, Health and Human Services, Housing and Urban Development and Labor and the White House Office of National Drug Control Policy collaborate to support the forum's participating cities, which were selected on the basis of need, geographic diversity, and willingness and capacity to explore new strategies.

For more information on the cities’ plans and progress, please visit: www.findyouthinfo.gov/youthviolence.

The forum is administered by the Office of Justice Programs’ Office of Juvenile Justice and Delinquency Prevention (OJJDP), which works to bring about a nation where children are healthy, educated and free from violence and where youth contact with the juvenile justice system is rare, fair and beneficial. For more information on OJJDP, please visit: www.ojjdp.gov.

The Office of Justice Programs (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. For more information on OJP, please visit: www.ojp.gov.

Attorney General Eric Holder announced today that the Justice Department’s Bureau of Justice Assistance (BJA) will provide $150,000 in Fiscal Year 2013 funding to Newtown, Conn., to fund two positions to ensure school safety, such as school resource officers.

 “This grant funding will help to offer critical support for law enforcement and essential services to the community as Newtown comes back from a heartbreaking tragedy,” said Attorney General Holder.  “Just over nine months after the senseless mass shooting at Sandy Hook, we remain committed to providing every resource we can to ensure that the children of Newtown can feel safe and secure at school and elsewhere.  And as we hold lost loved ones in our thoughts and prayers, we resolve to continue to support and protect this community – and to help them heal together.”

Today’s grant is just the latest assistance that the Justice Department has provided to Newtown. In August 2013, BJA provided $2.5 million in funding to the Connecticut State Police, the Newtown Police Department and their partner agencies that provided assistance in response to the shootings at Sandy Hook Elementary School last year.  The funding compensated the agencies and jurisdictions for costs related to overtime, forensics and security in the aftermath of the crime. 

The Bureau of Justice Assistance is one of six components of the Office of Justice Programs (OJP), which is headed by Assistant Attorney General Karol V. Mason.  OJP provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims.  OJP’s six components include: 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.

For more information about OJP, please visit: www.ojp.gov. 

The Justice Department and Internal Revenue Service (IRS) announced today that Reece Powers II, the former co-owner of R&J Partnership Ltd. doing business as Reece’s Las Vegas Supply (RLVS), a gambling supplies store located in Dayton, Ohio, was charged with illegal gambling, tax fraud and obstruction-of-justice-related offenses in an eight-count indictment unsealed today.  Other defendants charged in the indictment are Douglas A. Sanders, Jason S. Pulaski, Michael E. Gedeon, Jennifer Williams and Walter F. Dyer. 

The indictment, which was returned on Sept. 24, 2013, was unsealed following the arrests of Powers, Pulaski, Gedeon, Williams and Dyer.  All six defendants were charged with one count each of conspiracy to operate an illegal gambling business, and one count each of operating an illegal gambling business.  Additionally, Powers was charged with one count of conspiracy to defraud the United States by impeding and impairing the lawful functions of the IRS, and one count of witness tampering.  Furthermore, Pulaski, Gedeon, Williams and Dyer were each charged with one count of obstruction of justice. 

According to the indictment, between February 2004 and May 2011, Powers oversaw the recruitment of local charitable organizations to sponsor casino-like card games, such as Texas Hold’Em poker tournaments and live-action poker games (poker fundraisers), that were exempted from the general prohibition against games of chance under then-existing Ohio laws. The indictment alleges that Powers skimmed a portion of the money received from the poker fundraisers while providing false accountings of the money generated to the charitable organizations that they were meant to benefit.  The indictment further alleges that Sanders, Pulaski, Gedeon, Williams, Dyer and other co-conspirators who worked as card dealers, cashiers, chip sellers, pit bosses, tournament directors and managers, received compensation for their roles in conducting the poker fundraisers in violation of Ohio law, at Powers’ direction.  The indictment further alleges that each of the defendants claimed that they were uncompensated volunteers and that several of them deliberately misled investigators of the State of Ohio’s Attorney General’s Office and the IRS during the investigation.  

According to the indictment, Powers further conspired with another individual to sell RLVS and its associated real estate so that it appeared as if the business was sold for an amount less than its actual sale price, in an effort by Powers to evade the payment of taxes.  According to the indictment, Dyer, Pulaski, Gedeon, and Williams further committed obstruction of justice by testifying falsely before a federal grand jury investigating the poker scheme.  Additionally, Powers is charged with tampering with a witness by allegedly instructing the witness to testify falsely to the federal grand jury.

 An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  District Judge Timothy Black for the Southern District of Ohio will be presiding over the case after the arraignment of the defendants.  If convicted, Powers faces a maximum sentence of 35 years in prison, a fine of $1,000,000, and five years of supervised release.  If convicted, Pulaski, Gedeon, Williams and Dyer each face a maximum sentence of 20 years in prison, a fine of $750,000 and three years of supervised release.  If convicted, Sanders faces a maximum sentence of ten years in prison, a fine of $500,000 and three years of supervised release.

This case was investigated by special agents of IRS - Criminal Investigation.  The case is being prosecuted by Trial Attorneys Jorge Almonte and Stephen Descano of the Justice Department’s Tax Division.

Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax/ .

Nine Japan-based companies and two executives have agreed to plead guilty and to pay a total of more than $740 million in criminal fines for their roles in separate conspiracies to fix the prices of more than 30 different products sold to U.S. car manufacturers and installed in cars sold in the United States and elsewhere, the Department of Justice announced today.  The department said that price-fixed automobile parts were sold to Chrysler, Ford and General Motors, as well as to the U.S. subsidiaries of Honda, Mazda, Mitsubishi, Nissan, Toyota and Fuji Heavy Industries–more commonly known by its brand name, Subaru.

“These international price-fixing conspiracies affected more than $5 billion in automobile parts sold to U.S. car manufacturers, and more than 25 million cars purchased by American consumers were affected by the illegal conduct,” said Attorney General Eric Holder.  “The Department of Justice will continue to crack down on cartel behavior that causes American consumers and businesses to pay higher prices for the products and services they rely upon in their everyday lives.”

“Some of the price-fixing conspiracies lasted for a decade or longer, and many car models were fitted with multiple parts that were fixed by the auto parts suppliers,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program.  “The Antitrust Division has worked hand in hand with its international competition colleagues who have provided invaluable assistance to the Justice Department in breaking up these worldwide price-fixing cartels.”

“Today’s charges should send a message to companies who believe they don’t need to follow the rules,” said Ronald Hosko, Assistant Director of the FBI’s Criminal Division.  “If you violate the laws of this country, the FBI will investigate and put a stop to the threat you pose to our commercial system.  The integrity of our markets is a part of the foundation of a free society.”

Including those announced today, 20 companies and 21 executives have been charged in the Antitrust Division’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  All 20 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $1.6 billion in criminal fines.  Seventeen of the 21 executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.

Each of the companies and executives charged today has agreed to cooperate with the department’s ongoing antitrust investigation.  The plea agreements are subject to court approval. The companies’ and executives’ agreed-upon fines and sentences are: • Hitachi Automotive Systems Ltd. to pay a $195 million criminal fine; • Jtekt Corporation to pay a $103.27 million criminal fine; • Mitsuba Corporation to pay a $135 million criminal fine; • Mitsubishi Electric Corporation (MELCO) to pay a $190 million criminal fine; • Mitsubishi Heavy Industries Ltd. to pay a $14.5 million criminal fine; • NSK Ltd. to pay a $68.2 million criminal fine; • T.RAD Co. Ltd. to pay a $13.75 million criminal fine; • Valeo Japan Co. Ltd. to pay a $13.6 million criminal fine; • Yamashita Rubber Co. Ltd. to pay a $11 million criminal fine; • Tetsuya Kunida, a Japanese citizen and former executive of a U.S. subsidiary of a Japan-based automotive anti-vibration rubber products supplier to serve 12 months and one day in a U.S. prison, and to pay a $20,000 criminal fine; and
• Gary Walker, a U.S. citizen and former executive of a U.S. subsidiary of a Japan-based automotive products supplier to serve 14 months in a U.S. prison, and to pay a $20,000 criminal fine.

MELCO and Hitachi conspired with each other and other co-conspirator firms not charged today on sales of certain auto parts, including starter motors, alternators, and ignition coils, the department said.  Mitsuba and Mitsubishi Electric conspired together and with other co-conspirators not charged today on certain sales of starter motors.  Each of the other companies charged today colluded with other unnamed co-conspirators.

Generally, the companies, executives and co-conspirators engaged in the various price-fixing schemes by attending meetings and communicating by telephone in the United States and Japan to reach collusive agreements to rig bids, set prices and allocate the supply of auto parts sold to the car manufacturers.  They took measures to keep their conduct secret by using code names and meeting in remote locations.  Those charged also had further communications to monitor and enforce the collusive agreements.

The multiple conspiracies also harmed U.S. automobile plants in 14 states: Alabama; California; Georgia; Illinois; Indiana; Kansas; Kentucky; Michigan; Mississippi; Missouri; Ohio; Tennessee; Texas and Wisconsin, the department said.

The department has coordinated its investigation with the Japanese Fair Trade Commission, the European Commission, Canadian Competition Bureau, Korean Fair Trade Commission, Mexican Federal Economic Competition Commission and Australian Competition and Consumer Commission. 

The following charges were filed today in U.S. District Court for the Eastern District of Michigan in Detroit: Hitachi Automotive Systems Ltd.

According to a one-count felony charge, Hitachi and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of auto parts it sold to Ford, General Motors, Honda, Nissan and Toyota, in the United States and elsewhere.  The affected auto parts include starter motors, alternators, air flow meters, valve timing control devices, fuel injection systems, electronic throttle bodies, ignition coils, inverters and motor generators. According to the charge, Hitachi and its co-conspirators carried out the conspiracy from at least as early as January 2000 until at least February 2010.

Hitachi manufactures and sells auto parts to automobile manufacturers throughout the world.  The affected auto parts perform an array of functions in automobile engines, from regulating air and fuel flow to starting the engine to controlling the timing of engine valves.

Mitsuba Corporation

According to a two-count felony charge, Mitsuba and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of windshield washer systems and components, windshield wiper systems and components, starter motors, power window motors, and fan motors it sold to Chrysler, Honda, Subaru, Nissan and Toyota in the United States and elsewhere.  According to the charge, Mitsuba and its co-conspirators carried out the conspiracy from January 2000 until February 2010.  Mitsuba also agreed to plead guilty to one count of obstruction of justice, because of the company’s efforts to destroy evidence ordered by a high-level U.S.-based executive after learning of the U.S. investigation of collusion in the auto parts industry.

Mitsuba manufactures and sells numerous automotive parts to automobile manufacturers throughout the world.  The affected auto parts perform an array of functions in automobiles.  Windshield washer and wiper systems include a number of components and are designed to clear water or snow from vehicle windows.  Starter motors are small electric motors used in starting internal combustion engines.  Power window motors are small electric motors used to raise and lower vehicle windows.  Fan motors are small electric motors used to turn radiator cooling fans.

Mitsubishi Electric Corporation (MELCO)

According to a one-count felony charge, MELCO and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of automotive parts, including starter motors, alternators and ignition coils, it sold to Chrysler, Ford, General Motors, Honda, Fuji Heavy Industries Ltd. (Subaru), Nissan, and certain of their subsidiaries in the United States and elsewhere.  According to the charge, MELCO and its co-conspirators carried out the conspiracy from at least as early as January 2000 until at least February 2010. 

MELCO manufactures and sells automotive parts, including starter motors, alternators, and ignition coils.  Starter motors are small electric motors used in starting internal combustion engines.  Alternators generate an electric current while the engine is in operation.  Ignition coils are part of the fuel ignition system and release electric energy suddenly to ignite a fuel mixture.

Mitsubishi Heavy Industries Ltd.

According to a one-count felony charge, Mitsubishi Heavy Industries Ltd. (MHI) and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of compressors and condensers it sold to General Motors and Mitsubishi Motors North America in the United States and elsewhere.  According to the charge, MHI and its co-conspirators carried out the conspiracy from at least as early as January 2001 until at least February 2010. 

MHI manufactures and sells compressors and condensers.  A compressor produces and circulates highly pressurized refrigerant gas throughout the car air conditioning system.  A condenser cools the engine by condensing the refrigerant gas into liquid and releasing heat.

T.RAD Co. Ltd.

According to a one-count felony charge, T.RAD Co. Ltd. and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of radiators it sold to Toyota and Honda and the prices of automatic transmission fluid warmers (ATF warmers) sold to Toyota in the United States and elsewhere. According to the charge, T.RAD and its co-conspirators carried out the conspiracy from November 2002 until February 2010.

T.RAD manufactures and sells heat exchangers, including radiators and ATF Warmers.  Radiators are devices located in the engine compartment of a vehicle that cool the engine.  ATF warmers are devices located in the engine compartment of a vehicle that warm the automatic transmission fluid.  

Valeo Japan Co. Ltd.

According to a one-count felony charge, Valeo Japan Co. Ltd. and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to allocate the supply of, rig bids for, and to fix, stabilize and maintain the prices of air conditioning systems it sold to Nissan North America Inc., Suzuki Motor Corporation and Subaru, in the United States and elsewhere.  According to the charge, Valeo and its co-conspirators carried out the conspiracy from April 2006 until February 2010.

Valeo was engaged in the manufacture and sale of automotive air conditioning systems, which are systems that cool the interior environment of a vehicle.  Air conditioning systems, whether sold together or separately, are defined as automotive compressors, condensers, HVAC units (typically consisting of a blower motor, actuators, flaps, evaporator, heater core, and filter embedded in a plastic housing), control panels, sensors and associated hoses and pipes.

Gary Walker

According to a one-count felony charge, Gary Walker, a U.S. citizen and former executive of a U.S. subsidiary of a Japan-based automotive products supplier, engaged in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of seatbelts sold to Honda, Mazda, Nissan, Subaru and Toyota in the United States and elsewhere.  According to the charge, Walker and his co-conspirators carried out the conspiracy from at least Jan. 1, 2003 until at least February 2010.

The following charges were filed today in U.S. District Court for the Southern District of Ohio in Cincinnati: Jtekt Corporation

According to a two-count felony charge, Jtekt and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to allocate markets, to rig bids for, and to fix, stabilize and maintain the prices of bearings it sold to Toyota and electric powered steering assemblies it sold to Nissan, in the United States and elsewhere. According to the charge, Jtekt and its co-conspirators carried out the bearings conspiracy from 2000 until July 2011 and the steering assemblies conspiracy from 2005 until October 2011.

Jtekt manufactures and sells bearings and steering assemblies.  Bearings are widely used in industry in numerous applications for many products.  Bearings reduce friction and help components to roll smoothly past on another.  Electric powered steering assemblies provide electric power to help the driver more easily steer the automobile.  Electric powered steering assemblies link the steering wheel to the tires, and include the column, intermediate shaft and electronic control unit, among other parts, but do not include the steering wheel or tires.

NSK Ltd.

According to a one-count felony charge, NSK and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to allocate markets, to rig bids for, and to fix, stabilize and maintain the prices of bearings it sold to Toyota, in the United States and elsewhere.  NSK manufactures and sells bearings.  According to the charge, NSK and its co-conspirators carried out the conspiracy from 2000 until July 2011.

The following charges were filed today in U.S. District Court for the Northern District of Ohio in Toledo: Yamashita Rubber Co. Ltd.

According to a one-count felony charge, Yamashita Rubber Co. Ltd. and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, raise, and maintain the prices of automotive anti-vibration rubber products it sold in the United States and elsewhere to Honda Motor Co. Ltd., American Honda Motor Company Inc. and Suzuki Motor Corporation.  According to the charge, Yamashita Rubber Co. and its co-conspirators carried out the conspiracy from at least April 2003 until May 2012.

Automotive anti-vibration rubber products are comprised primarily of rubber and metal, and are installed in automobiles to reduce engine and road vibration.

Tetsuya Kunida

According to a one-count felony charge, Tetsuya Kunida, a former executive of a U.S. subsidiary of a Japan-based automotive anti-vibration rubber products supplier, engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, raise, and maintain the prices of automotive anti-vibration rubber products.  The conspiracy affected sales of automotive anti-vibration rubber products to Toyota Motor Corporation and other automakers in the United States and elsewhere.  ccording to the charge, Kunida and his co-conspirators carried out the conspiracy from at least November 2001 until May 2012.

DENSO Corporation, Nippon Seiki Ltd., Tokai Rika Co. Ltd., Furukawa Electric Co. Ltd, Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc., TRW Deutschland Holding GmbH, Diamond Electric Mfg. Co. Ltd., and Panasonic Corporation have already pleaded guilty.  Fifteen individuals have been sentenced to pay criminal fines and to serve prison sentences ranging from a year and a day to two years each.

The companies and individuals are charged with price fixing in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations and a $1 million criminal fine and 10 years in prison for individuals.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.  Additionally, Mitsuba was also charged with obstruction of justice, which carries a maximum penalty of a $500,000 criminal fine.

The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office, New York Office, the National Criminal Enforcement Section, and the FBI’s Cincinnati, Cleveland, Detroit, New York and Washington Field Offices, with the assistance of the FBI headquarters’ International Corruption Unit.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.  To report a crime to the FBI, go to www.fbi.gov and click on the “Report a Crime” tab.

Related Materials:

Gary Walker Information
Hitachi Information
JTekt Information
Melco Information
MHI Information
Mitsuba Information
Yamashita Rubber Information
Valeo Japan Information
Tetsuya Kunida Information
T.RAD Information
NSK Information

A patient recruiter of a Miami health care company pleaded guilty today for his participation in a $48 million home health Medicare fraud scheme.

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

Emilio Amador, 46, pleaded guilty before U.S. District Judge Federico A. Moreno to one count of conspiracy to receive health care kickbacks and two counts of receiving health care kickbacks. He faces a maximum penalty of five years in prison for each count when he is sentenced on Dec. 4, 2013.

According to court documents, Amador was a patient recruiter who worked for Caring Nurse Home Health Care Corp. (Caring Nurse), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.  
           
According to court documents, from approximately January 2006 through approximately June 2011, Amador would recruit patients for Caring Nurse, and in doing so would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse in return for allowing Caring Nurse to bill the Medicare program on behalf of the patients Amador had recruited. These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.

According to court documents, Amador also pleaded guilty to his involvement with fraudulent billings for Nation’s Best Care Home Health, Corp. (Nation’s Best) as relevant conduct. Amador was the owner, operator and president of Nation’s Best. The billings for Nation’s Best were approximately $30 million.

In a related case, on Feb. 27, 2013, Rogelio Rodriguez and Raymond Aday, the owners and operators of Caring Nurse and Good Quality Home Health Care, Inc. (Good Quality), another fraudulent home health care agency, were sentenced to 108 and 51 months in prison, respectively. Their sentencings followed their December 2012 guilty pleas to one count each of conspiracy to commit health care fraud charged in an October 2013 indictment. From in or around January 2006 through in or around June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided.  Medicare paid approximately $33 million for these fraudulent claims.           

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under 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.

Several patient recruiters, including two medical clinic owners, have been arrested in connection with a health care fraud scheme involving defunct home health care company Flores Home Health Care Inc. (Flores Home Health).

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

In an indictment returned on Sept. 24, 2013, and unsealed this afternoon, Isabel Medina, 49, and Lerida Labrada, 59, were charged with conspiracy to commit health care fraud, which carries a maximum penalty of 10 years in prison upon conviction.  Together with Mayra Flores, 49, and German Martinez, 36, Medina and Labrada also face charges for allegedly conspiring to defraud the United States and to receive health care kickbacks as well as receipt of kickbacks in connection with a federal health care program, which carry a maximum penalty of five years in prison upon conviction.

According to the indictment, the defendants worked as patient recruiters for the owners and operators of Flores Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.  Medina and Labrada were also the owners and operators of Miami medical clinics which allegedly provided fraudulent prescriptions to the owners and operators of Flores Home Health.

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

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

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under 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 A. Brendan Stewart 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.

An indictment is a formal accusation of criminal conduct, not evidence.  A defendant is presumed innocent unless and until convicted.

The Justice Department announced today that it has reached a settlement agreement with Huber Nurseries, based in Manheim, Pa., resolving allegations that Huber engaged in citizenship status discrimination by preferring to hire temporary visa holders over recent lawful permanent residents from Nepal.   The underlying charge was filed by Philadelphia Legal Assistance on behalf of the lawful permanent residents.

The Department of Justice investigation was initiated on Aug. 15, 2012 when six lawful permanent residents from Nepal were denied employment by the Pennsylvania nursery. The department concluded that Huber unlawfully preferred to hire twelve foreign national workers under the H-2A visa program and subjected the U.S. workers to different selection standards and increased scrutiny.   The H-2A temporary agricultural program allows agricultural employers who anticipate a shortage of domestic workers to bring nonimmigrant foreign workers to the U.S. to perform temporary agricultural work.  The Immigration and Nationality Act (INA) generally prohibits employers from refusing to hire protected workers, including U.S. citizens, certain lawful permanent residents, refugees and asylees, based on their citizenship status.

Under the terms of the settlement, Huber has agreed to pay $2,250 in civil penalties to the United States and $59,617 in back pay to the six injured parties, who are former refugees.  Huber has also agreed to provide its human resources personnel with training on the anti-discrimination requirements of the INA, adopt nondiscrimination policies with respect to recruitment and hiring and maintain and submit records to the Department of Justice for the one-year term of the agreement.  Trial Attorney Richard Crespo represented the Office of Special Counsel for Immigration-Related Unfair Employment Practices  (OSC) in this matter.

“Work-authorized individuals should not be denied access to jobs because of unlawful discrimination on the basis of immigration status or national origin," said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.   "We are pleased to have reached a settlement with Huber and look forward to continuing to work with employers to educate them about anti-discrimination protections and employer obligations under the law."

OSC is responsible for enforcing the anti-discrimination provision of the INA.  For more information about protections against employment discrimination under the immigration laws, or to report a possible violation, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, 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 .

The Justice Department announced today that Southport Bank of Kenosha, Wis., will pay $687,000 to African-American and Hispanic wholesale mortgage borrowers as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of race and national origin. 

The settlement, which is subject to court approval, was filed in conjunction with the Department’s complaint in the U.S. District Court for the Eastern District of Wisconsin.  The complaint alleges that Southport charged hundreds of African-American and Hispanic borrowers higher fees than white borrowers on wholesale mortgage loans in violation of the Fair Housing Act (FHA) and Equal Credit Opportunity Act (ECOA).  Southport cooperated fully with the Department’s investigation into its lending practices and agreed to settle this matter without contested litigation. 

The lawsuit originated from a 2012 referral by the Federal Deposit Insurance Corporation (FDIC) to the Justice Department’s Civil Rights Division.  Southport is regulated by the FDIC. 

The proceeds of the settlement will be used to compensate the African-American and Hispanic victims of Southport’s alleged discrimination.  Under the proposed settlement, a list of individual victims will be identified by the United States.  The settlement requires borrowers who are eligible for compensation to be notified by the bank and provides for monitoring of the compensation process by the department. 

Southport is not currently engaged in the business of wholesale home mortgage lending, but the settlement provides that if it re-enters that business, the bank will implement policies, practices and monitoring designed to prevent and detect potential fair lending violations.

“Discrimination on the basis of race and national origin in the extension of credit, including by wholesale lenders, must be eliminated,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.  “We commend Southport for working cooperatively with the Justice Department in reaching an appropriate resolution of this case.”

“The United States Department of Justice, through both the Civil Rights Division and my office, remains steadfast in its commitment to identifying, investigating, and addressing patterns and practices of racial and national origin bias in the extension and management of mortgage loans” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin. “ As reflected by today’s settlement, we are animated not only by the all-important mandates of the Fair Housing Act and the Equal Credit Opportunity Act but also by our much-related interest in ensuring that all Americans are afforded economic opportunities and financial options in this most basic aspect of life—housing.  I join the Assistant Attorney General in recognizing the leadership of the Southport Bank of Kenosha for their cooperation in accomplishing this settlement that compensates members of our African-American and Hispanic communities for the discrimination that they suffered.”

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 26 lending matters under the FHA, ECOA and the Servicemembers Civil Relief Act.  The settlements in these matters provide for a minimum of $660 million in monetary relief for impacted communities and more than 300,000 individual borrowers.  The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/ .

The Civil Rights Division, the U.S. Attorney’s Office for the Eastern District of Wisconsin, and the FDIC are members of the 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 on the task force, visit http://www.stopfraud.gov/ .

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

The Justice Department announced today that a federal district judge in Kansas City, Mo., permanently barred Mark Steven Hall from preparing federal income tax returns for others.  According to the court’s civil injunction order filed in the U.S. District Court for the Western District of Missouri, from 2006 to 2010 Hall worked as an employee or independent contractor for various accounting firms.  Beginning in the 2010 tax season Hall prepared federal tax returns from his home in Kansas City. 

The court found that Hall understated his customers’ tax liabilities by claiming false expenses and deductions.  The court found that in some cases, Hall used a formula to claim charitable deductions without any regard to whether his customers had the necessary supporting documentation.  In other instances, the court found that even where Hall’s customers provided him with documentation of charitable donations, Hall inflated those customers’ reported charitable contributions.

Similarly, the court found that although one customer provided Hall with all bank statements, invoices, ledgers, check stubs and receipts for his small business, Hall did not use those documents in preparing the return. 

The court reasoned that a permanent bar on all future tax preparation was warranted because without a permanent ban, Hall “would likely find other ways to manipulate the tax system for his customers.”  The court found that there was a high probability that Hall’s customers received erroneous refunds due to his conduct. 

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 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 .

Related Materials:

United States v. Mark Steven Hall
Order

WASHINGTON - El Departamento de Justicia anunció ayer que Southport Bank of Kenosha, Wis., pagará $687,000 a prestatarios de hipotecas mayoristas afroestadounidenses e hispanos como parte de un acuerdo conciliatorio en resolución de alegatos de que exhibió un patrón o una práctica de discriminación basado en raza y origen nacional.

El acuerdo conciliatorio, que está sujeto a aprobación del tribunal, fue presentado junto con la demanda del Departamento en el Tribunal Federal de Distrito del Distrito Este de Wisconsin. La demanda alega que Southport le cobró a cientos de prestatarios afroestadounidenses e hispanos cargos más altos que a prestatarios blancos en préstamos hipotecarios mayoristas, en violación de la Ley de Vivienda Justa [Fair Housing Act (FHA)] y la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)]. Southport cooperó plenamente con el Departamento en la investigación de sus prácticas de otorgamiento de préstamos y aceptó realizar este acuerdo sin litigio contencioso.

La demanda se originó por una remisión en el 2012 por parte de la Corporación Federal de Seguros de Depósito [Federal Deposit Insurance Corporation (FDIC)] a la División de Derechos Civiles del Departamento de Justicia. Southport es regulado por la FDIC.

Los fondos del acuerdo conciliatorio se utilizará para indemnizar a las víctimas afroestadounidenses e hispanas de la supuesta discriminación por parte de Southport. Bajo el acuerdo conciliatorio propuesto, los Estados Unidos identificarán una lista de víctimas. El acuerdo conciliatrio exige que los prestatarios elegibles para indemnización sean notificados por el banco y dispone el monitoreo del proceso de indemnización por el departamento.

Southport no se dedica actualmente al negocio de los préstamos hipotecarios mayoristas para vivienda, pero el acuerdo dispone que, si volviera a dedicarse al negocio, el banco deberá implementar políticas, prácticas y monitoreo diseñados para prevenir y detectar violaciones potenciales de las normas de otorgamiento justo de préstamos.

"La discriminación basada en raza y origen nacional al otorgar crédito, inclusive por parte de prestamistas mayoristas, debe eliminarse", señaló Jocelyn Samuels, Secretaria de Justicia Auxiliar Interina de la División de Derechos Civiles del Departamento de Justicia. "Felicitamos a Southport por su colaboración con el Departamento de Justicia para lograr una resolución adecuada del caso".

"El Departamento de Justicia de los Estados Unidos, a través de tanto la División de Derechos Civiles como mi oficina, continúa inquebrantable en su compromiso de identificar, investigar y combatir patrones y prácticas de parcialidad racial y basada en el origen nacional en el otorgamiento y la administración de préstamos hipotecarios", señaló James L. Santelle, Fiscal Federal para el Distrito Este de Wisconsin. Como refleja el acuerdo conciliatorio de hoy, nos impulsan no solo todos los mandatos importantes de la Ley de Vivienda Justa y la Ley de Igualdad de Oportunidades de Crédito, sino también nuestro interés muy relacionado en asegurar que todos los estadounidenses tengan las mismas oportunidades económicas y opciones financieras en este aspecto tan básico de la vida—la vivienda. Me uno a la Secretaria de Justicia Auxiliar Interina en reconocer el liderazgo del Southport Bank of Kenosha por su cooperación para que se lograra este acuerdo conciliatorio que indemniza a miembros de nuestras comunidades afroestadounidenses e hispanas por la discriminación que sufrieron".

La coacción asociada a las leyes de otorgamiento justo de préstamos por parte del Departamento de Justicia es llevada a cabo por la Unidad de Préstamos Justos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles. Desde que se estableció la Unidad de Préstamos Justos en febrero de 2010, ha entablado o resuelto 26 casos de préstamos bajo la FHA, la ECOA y la Ley de Alivio Civil para los Miembros de las Fuerzas Armadas [Servicemembers Civil Relief Act]. Los acuerdos conciliatorios en estos casos proveen un mínimo de $ 660 millones de dólares en asistencia monetaria para comunidades impactadas y más de 300,000 prestatarios individuales. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso sujetos a ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications/.

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

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

A high-ranking member of the Aryan Brotherhood of Texas (ABT) was sentenced today to serve 360 months in prison for his role in the ABT’s criminal enterprise, announced 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.

Charles Lee Roberts, aka “Jive,” 68, of Beaumont, Texas, was sentenced today by U.S. District Judge Sim Lake in the Southern District of Texas.  In addition to his prison term, Roberts will serve five years of supervised release.

On May 10, 2013, Roberts pleaded guilty to one count of conspiracy to commit racketeering offenses (RICO). 

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

Roberts admitted to being a senior leader of the ABT, trafficking in methamphetamine and heroin, and being involved in several homicides on behalf of the ABT. 

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

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

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

Roberts is one of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges.
 
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice–Office of Inspector General; Harris County, Texas, Sheriff’s Office; Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.  

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

WASHINGTON—The Department of Justice’s Antitrust Division and the staff of the Federal Trade Commission (FTC) today issued a joint model waiver of confidentiality (74.63 KB) for individuals and companies to use in merger and civil non-merger matters involving concurrent review by the DOJ or FTC and non-U.S. competition authorities.

A waiver provides the terms on which an individual or company agrees to waive statutory confidentiality protections to the agency that originally received the company’s confidential information. The model waiver is designed to streamline the waiver process to significantly reduce the burden on individuals and companies, as well as to reduce the agencies’ time and resources involved in negotiating waivers.

The model waiver updates and replaces the agencies’ prior forms.  It reflects both agencies’ recent experience with waivers, incorporating updated language and provisions, including a provision addressing the agencies’ treatment of privileged information.

A waiver of confidentiality is voluntarily provided by an individual or company involved in a civil matter. A waiver describes an agency’s policy regarding its treatment of information received from another competition agency under a waiver, although it is not an agreement signed by the agency. A waiver allows for the sharing of confidential information only among the competition agencies listed in the waiver.

Waivers enable more complete communication, cooperation and coordination between competition agencies concurrently investigating a matter. By permitting cooperating agencies to discuss or otherwise exchange the individual’s or company’s confidential information, a waiver enables agencies to make more informed, consistent decisions and coordinate more effectively, often expediting the review.

To promote greater transparency and better understanding of the DOJ’s and FTC’s policies and practices related to waivers, DOJ and staff of the FTC also released a  Frequently Asked Questions (FAQ) document (119.08 KB) to accompany the model waiver. The FAQ provides introductory information on waivers and on the confidentiality rules applicable to the information provided under the model waiver.  It also describes the process for providing a waiver to either agency and explains specific provisions of the model waiver. By issuing the model waiver and accompanying FAQ jointly, the Department of Justice and the Federal Trade Commission hope to facilitate parties’ use of waivers generally and, in particular, the model waiver.

Further information about waivers of confidentiality, the model waiver of confidentiality, and FAQ are available at http://www.justice.gov/atr/public/international/index.html and http://www.ftc.gov/oia/waivers/index.shtm.

The Department of Justice announced today that it has reached a settlement agreement with the City of Birmingham, Ala., that, if approved by the court, will resolve the Department’s complaint alleging religious discrimination in violation of Title VII of the Civil Rights Act of 1964, as amended.  The complaint, which was filed simultaneously with the parties’ settlement agreement in the U.S. District Court for the Northern District of Alabama, alleges that the city’s police department discriminated against former employee Renee Gunn on the basis of her religion, Messianic Judaism, by failing to provide her a reasonable accommodation of her religious practice of not working during the Jewish Sabbath, which ultimately forced her to resign from the police department.   

Gunn was employed by the city’s police department as a public safety dispatcher from April 2008 until her resignation in August 2011.  According to the Department’s complaint, Gunn is a practicing member of the Messianic Jewish faith, which prohibits its adherents from working during the Jewish Sabbath, from sunset on Fridays until sunset on Saturdays.  As the Department’s complaint alleges, Ms. Gunn’s work schedule required that she work during the Jewish Sabbath, and she requested a change in her schedule to accommodate her Sabbath observance.  According to the complaint, police department officials denied this request stating that it did not change off days for any religious faith.   Ms. Gunn was forced to resign her position with the police department due to the city’s failure to provide a reasonable accommodation.  As the complaint alleges, the police department could have accommodated Ms. Gunn’s religious beliefs without undue hardship. 

Under the terms of the settlement, the city must pay Gunn $80,000 in back pay and compensatory damages, and reinstate her as a dispatcher in the police department with a work schedule that does not require her to work during the Sabbath.   The city is also required to develop and implement a religious accommodation policy for the police department that is consistent with Title VII’s requirement for employers to reasonably accommodate the religious beliefs, practices and observances of all employees and prospective employees.  In addition, the city is required to provide mandatory training on the religious accommodation policy to all police department employees.

“Employees should not have to choose between practicing their religion and their jobs,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “This case highlights the obligation of an employer to engage in an interactive process to understand and work with an employee in finding an accommodation of the employee’s religious beliefs that will not cause undue hardship to the employer.  We commend the City of Birmingham for working cooperatively with the Justice Department to reach this agreement.”

The enforcement of Title VII is a top priority of the Justice Department’s Civil Rights Division.   Additional information about the Civil Rights Division is available on its websites at www.justice.gov/crt/ and www.justice.gov/crt/emp/.

The Justice Department announced today that it has reached an agreement with Infinity Group (IG) and its related entities resolving allegations that the companies violated the anti-discrimination provision of the Immigration and Nationality Act (INA).  IG is based in Clute, Texas and provides project-based temporary skilled labor to client companies.  IG employs over a thousand individuals in the United States.

The Department’s investigation was initiated based on a referral from U.S. Citizenship and Immigration Services (USCIS).  The investigation determined that IG entities, which utilized the E-Verify system, required non-citizens to present specific U.S. Department of Homeland Security-issued documents to establish their identity and employment authorization while not making similar requests of U.S. citizens.  The INA’s anti-discrimination provision prohibits employers from

discriminating against noncitizens in the employment eligibility verification process by demanding more or different documents than U.S. citizens are required to present.  After receiving notice of the Office of Special Counsel for Immigration-Related Employment Practices’ (OSC) investigation, IG immediately changed its employment policies and practices to conform to the anti-discrimination provision of the INA. 

Under the terms of the settlement agreement, IG will train its human resources personnel on the INA’s anti-discrimination provision; pay $53,800 in civil penalties to the United States; create a $35,000 back pay fund to compensate any individuals who suffered lost wages as a result of its practices; and be subject to monitoring by the department and reporting requirements for a period of two years.

“Employers, including those who use E-Verify, must ensure that their human resources personnel do not violate the anti-discrimination provision of the INA,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “Infinity Group is commended for immediately changing its policies upon notice of OSC’s investigation to address its discriminatory documentary practices.”

OSC is responsible for enforcing the anti-discrimination provision of the INA.  The case was handled by OSC Trial Attorney Liza Zamd.   For more information about protections against employment discrimination under the immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired), call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, 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 .

The Justice Department today announced an enhanced online resource designed to support American victims of overseas terrorism.  The site, sponsored and maintained by the National Security Division’s Office of Justice for Victims of Overseas Terrorism (OVT), will expand the public’s ability to obtain information about the types of support available to help victims of overseas attacks and their loved ones in the aftermath of acts of international terrorism, including information about programs available to assist victims in connection with foreign criminal justice proceedings.  In addition, the website provides greater information about OVT’s establishment and services, for victims and others interested in OVT’s work.

“This enhanced website will serve as an important resource for U.S. victims of overseas terrorism and their loved ones,” said John P. Carlin, Acting Assistant Attorney General for National Security. “The Department remains committed both to seeking justice for Americans victimized by terrorism, whether at home or abroad, and to providing victims the information and support they deserve.”

The Attorney General established the OVT on May 6, 2005.  It is now a component of the Justice Department’s National Security Division.  The primary purpose of the OVT is to ensure that the investigation and prosecution of terrorist attacks against American citizens overseas remain a high priority within the Department of Justice.

The OVT is responsible for monitoring the investigation and prosecution of terrorist attacks against Americans abroad; working with other pertinent Justice Department components to ensure that the rights of victims of such attacks are honored and respected; establishing a Joint Task Force with the Department of State, to be activated in the event of a terrorist attack  in which Americans are harmed; and serving as an information resource to American victims of overseas terrorism including, as appropriate, information about ongoing foreign investigations and prosecutions. 

“It is crucially important that any Americans attacked while traveling or living outside of our borders receive the support of our government as they pursue justice in the aftermath of the tragedy of terrorism,” said Heather Cartwright, Director of the Office of Justice for Victims of Overseas Terrorism.  “This online resource gathers in one place important information for American victims of overseas terrorism and provides assistance as they seek accountability for these crimes.”

 The enhanced online resource will first be made available on the Justice Department’s website at http://www.justice.gov/nsd/ovt.

Two former derivatives brokers and a former cash broker employed by London-based brokerage firm ICAP were charged as part of the ongoing criminal investigation into the manipulation of the London Interbank Offered Rate (LIBOR), the Justice Department announced today.

Darrell Read, who resides in New Zealand, and Daniel Wilkinson and Colin Goodman, both of England, were charged with conspiracy to commit wire fraud and two counts of wire fraud in a criminal complaint unsealed in Manhattan federal court earlier today.  They each face a maximum penalty of 30 years in prison for each count upon conviction. 

“By allegedly participating in a scheme to manipulate benchmark interest rates for financial gain, these defendants undermined the integrity of the global markets,” said Attorney General Eric Holder. “They were supposed to be honest brokers, but instead, they put their own financial interests ahead of that larger responsibility.  And as a result, transactions and financial products around the world were compromised, because they were tied to a rate that was distorted due to the brokers’ dishonesty.  These charges underscore the Justice Department’s determination to hold accountable all those whose conduct threatens the integrity of our financial markets.”

“These three men are accused of repeatedly and deliberately spreading false information to banks and investors around the world in order to fraudulently move the market and help their client fleece his counterparties,” said Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.  “Our criminal investigation of the manipulation of LIBOR by some of the largest banks in the world has led us from New York to London, to Tokyo, and other financial hubs around the globe.  These important charges are just the latest law-enforcement action in the Criminal Division and Antitrust Division’s global LIBOR investigation, and reflect the Department’s continued dedication to detecting, and prosecuting, financial fraudsters who affect U.S. markets, whether they work at a bank, or a brokerage, and whether they carry out their fraud from a desk in the United States, or abroad.”
           
“The complaint unsealed today charges Colin Goodman, Daniel Wilkinson and Darrell Read for conspiring to manipulate benchmark interest rates that determined the profitability of their client’s trades,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “In exchange for bigger bonus checks, the three defendants undermined financial markets around the world by compromising the integrity of globally used interest rate benchmarks.  The Department continues to demonstrate its commitment to protecting the interest of American citizens in free and fair financial markets.” 

“Corporate and securities fraud involving the manipulation of these rates causes a worldwide impact on trading positions and erodes the integrity of the market and confidence in Wall Street,” said Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office.  “Unraveling such complex financial schemes is difficult and time consuming.  Today’s charges are the result of the hard work of the FBI special agents and forensic accountants who dedicated significant time and resources to investigating this case.”

According to the criminal complaint, LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks.  LIBOR is published by the British Bankers’ Association (BBA), a trade association based in London.  At the time relevant to the criminal complaint, LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year.  The published LIBOR “fix” 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.

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 estimated at approximately $450 trillion.

According to allegations in the criminal complaint filed in this case, between July 2006 and September 2010, Wilkinson was a desk director employed in the London office of ICAP, where he supervised a group of derivatives brokers – including Read – specializing in Yen-based financial products.  Generally, the desk’s clients were derivatives traders at large financial institutions, and the transactions brokered by Wilkinson, Read and others on the desk essentially consisted of bets between traders on the direction in which Yen LIBOR would move.  Between July 2006 and September 2009, the desk’s largest client was a senior trader at UBS (UBS Trader) in Tokyo, to whom Read spoke almost daily.  Because of the large size of the client’s trading positions, even slight moves of a fraction of a percent in Yen LIBOR could generate large profits.  For example, UBS Trader once told Read that a 0.01 percent – or one basis point – movement in the final Yen LIBOR fixing on a specific date could result in $3 million profit for his trading positions.  A significant part of both Read’s and Wilkinson’s compensation was tied to the brokerage fees generated by UBS Trader and paid to ICAP. 

Goodman was a cash broker at ICAP’s London office during the relevant time period.  In addition to brokering cash transactions, Goodman distributed a daily email to individuals outside of ICAP, including derivatives traders at several large banks as well as those responsible for providing the BBA with LIBOR submissions at certain banks.  Goodman’s email contained what was termed his “SUGGESTED LIBORS,” purported predictions of where Yen LIBOR ultimately would fix each day across eight specified borrowing periods.  Read and Wilkinson, along with Goodman himself, often referred to Goodman as “lord libor.”   

The complaint alleges that Read, Wilkinson and Goodman, together with UBS Trader, executed a sustained and systematic scheme to move Yen LIBOR in a direction favorable to UBS Trader’s trading positions. 

According to the criminal complaint, the primary strategy employed by Read, Wilkinson and Goodman to execute the scheme was to use Goodman’s “SUGGESTED LIBORS” email to disseminate misinformation to Yen LIBOR panel banks in hopes that the banks would rely on the misinformation when making their own respective Yen LIBOR submissions to the BBA for inclusion in the published fix.  Rather than providing good faith predictions as to where Yen LIBOR would fix, Goodman instead often used his daily email to set forth predictions which benefitted UBS Trader’s trading positions. 

Beginning in or about June 2007, Goodman was paid a bonus through the desk Wilkinson supervised, allegedly intended, at least in part, to reward Goodman for his role in their effort to influence and manipulate the published Yen LIBOR fix.

As a second strategy, Read and Wilkinson allegedly further agreed to contact interest rate derivatives traders and submitters employed at Yen LIBOR panel banks in an effort to cause them to make false and misleading submissions to the BBA at UBS Trader’s behest. 

As alleged in the charging document, Read, Wilkinson, Goodman, UBS Trader, and other co-conspirators often executed their scheme through electronic chats and email exchanges.  For example, on June 28, 2007, in an email message, Read told Wilkinson: “DAN THIS IS GETTING SERIOUS [UBS TRADER] IS NOT HAPPY WITH THE WAY THINGS ARE PROGRESSING . . . CAN YOU PLEASE GET HOLD OF COLIN AND GET HIM TO SEND OUT 6 MOS LIBOR AT 0.865 AND TO GET HIS BANKS SETTING IT HIGH. THIS IS VERY IMPORTANT BECAUSE [UBS TRADER] IS QUESTIONING MY (AND OUR) WORTH.”

The complaint alleges that the defendants were aware of the effects that Goodman’s false and fraudulent “SUGGESTED LIBORS” had on submissions by Yen LIBOR panel banks.  For example, on Nov. 20, 2008, Read asked UBS Trader, “you have a really big fix tonight I believe? if Colin sends out 6m at a more realistic level than 1.10 [%] i reckon [the two panel banks] will parrot him, it might mean 6m coming down a bit.” On the following day, Nov. 21, 2008, Goodman moved his suggestion for 6-month Yen LIBOR down by nine basis points.  The two other banks mirrored Goodman’s suggestion, moving their 6-month Yen LIBOR submissions down by nine basis points.

According to allegations in the complaint, Read counseled UBS Trader how to most effectively manipulate Yen LIBOR.  For example, UBS Trader told Read in a July 22, 2009, electronic chat that “11th aug is the big date...i still have lots of 6m fixings till the 10th.”   Read responded to UBS Trader, “if you drop [UBS’s] 6m dramatically on the 11th mate, it will look v fishy... .  I’d be v careful how you play it, there might be cause for a drop as you cross into a new month but a couple of weeks in might get people questioning you.”  UBS Trader replied, “don’t worry will stagger the drops...ie 5bp then 5bp,” and Read told UBS Trader, “ok mate, don’t want you getting into [expletive].”  UBS Trader again assured Read that UBS and two additional panel banks would stagger their drops in coordination, and Read concluded, “great the plan is hatched and sounds sensible.”

A criminal complaint is a formal accusation of criminal conduct, not evidence.  A defendant is presumed innocent unless and until convicted.

The investigation is being conducted by special agents, forensic accountants, and intelligence analysts of the FBI’s Washington Field Office.  The prosecution is being handled by Deputy Chief William Stellmach and Trial Attorney Sandra L. Moser of the Criminal Division’s Fraud Section and Trial Attorneys Eric Schleef and Kristina Srica of the Antitrust Division.  Trial Attorneys Alexander Berlin and Thomas B.W. Hall, Law Clerk Andrew Tyler, and Paralegal Specialist Kevin Sitarski of the Criminal Division’s Fraud Section, along with Assistant Chief Elizabeth Prewitt and Trial Attorney Richard Powers of the Antitrust Division, and former Trial Attorney Luke Marsh have also provided valuable assistance.  The Criminal Division’s Office of International Affairs has provided assistance in this matter as well.

The broader investigation relating to LIBOR and other benchmark rates 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 Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the Department and, along with the U.K. Financial Conduct Authority, has played a major role in the investigation.  The Securities and Exchange Commission has also provided valuable assistance for which the Department is grateful.  The Department also expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.  Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation, and the Department is grateful for their cooperation and assistance as well.

Finally, the Department acknowledges ICAP’s continuing cooperation in the Department’s ongoing investigation.

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. 

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Complaint

Five Miami residents have been charged for their alleged roles in a $48 million home health Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement after the case was unsealed following the defendants’ arrests this morning.

On Sept. 24, 2013, a federal grand jury in Miami returned an 11-count indictment charging Marianela Martinez, 45; Mireya Amechazurra, 49; Lissett Jo-Moure, 55; Omar Hernandez, 48; and Celia Santovenia, 49, each with one count of conspiracy to receive health care kickbacks and two counts of receiving kickbacks in connection with a Federal health care program.  Each charge carries a maximum penalty of five years in prison upon conviction.

According to the indictment, the defendants participated in a scheme involving Caring Nurse Home Health Care Corp. (Caring Nurse) and Good Quality Home Health Inc. (Good Quality), Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.  The defendants allegedly referred Medicare beneficiaries to Caring Nurse and/or Good Quality in exchange for kickbacks, knowing that Caring Nurse and/or Good Quality would in turn bill Medicare for home health services purportedly rendered for the recruited Medicare beneficiaries.

An indictment is a formal accusation of criminal conduct, not evidence.  A defendant is presumed innocent unless and until convicted.

In a related case, on Feb. 27, 2013, Rogelio Rodriguez and Raymond Aday, the owners and operators of Caring Nurse and Good Quality, were sentenced to 108 and 51 months in prison, respectively.  The sentencings followed their December 2012 guilty pleas to one count each of conspiracy to commit health care fraud charged in an October 2012 indictment, which alleged that from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided.  Medicare paid approximately $33 million for those fraudulent claims.          

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under 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.

Kan-Di-Ki LLC, formerly known as Kan-Di-Ki Inc., doing business as Diagnostic Laboratories and Radiology (Diagnostic Labs), will pay $17.5 million to settle allegations that the California-based company violated the federal and California False Claims Acts by paying kickbacks for referral of mobile lab and radiology services subsequently billed to Medicare and Medi-Cal (the state of California’s Medicaid program), the Justice Department announced today.

“This settlement demonstrates the Department of Justice’s continuing efforts to protect public funds,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “We will continue to work with our state partners to recover misspent monies from companies that abuse government health care programs.”

Diagnostic Labs allegedly took advantage of Medicare’s different reimbursement system for inpatient and outpatient services by charging Skilled Nursing Facilities (SNFs) in California discounted rates for inpatient services paid by Medicare in exchange for the facilities’ referral of outpatient business to Diagnostic Labs.  For inpatient services, Medicare pays a fixed rate based on the patient’s diagnosis, regardless of specific services provided.  For outpatients, Medicare pays for each service separately.  Diagnostic Labs’ scheme enabled the SNFs to maximize profit earned for providing inpatient services by decreasing SNFs’ costs of providing these services.  It also allegedly allowed Diagnostic Labs to obtain a steady stream of lucrative outpatient referrals that it could directly bill to Medicare and Medi-Cal.  The provision of inducements, including discounted rates, to generate referrals is prohibited by federal and state law.

“When medical facility owners illegally offer discounts to customers to generate business, it results in inflated claims to government health care programs and increases costs for all taxpayers,” said Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the Department of Health and Human Services’ Office of Inspector General.  “This $17.5 million settlement demonstrates OIG’s ongoing commitment to safeguarding federal health care programs and taxpayer dollars against all types of fraudulent activities.”

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $16.6 billion through False Claims Act cases, with more than $11.8 billion of that amount recovered in cases involving fraud against federal health care programs.

This settlement resolves a lawsuit filed by former Diagnostic Lab employees, Jon Pasqua and Jeff Hauser, under the qui tam, or whistleblower, provisions of the federal and state False Claims Acts.  The acts allow private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery .  Together, Pasqua and Hauser will receive $3,755,500 as their share of the federal government’s recovery.

The investigation was jointly handled by the U.S. Attorney’s Office for the Central District of California, the Justice Department’s Civil Division, Commercial Litigation Branch and the Department of Health and Human Services’ Office of the Inspector General. 

The qui tam case is captioned United States and State of California ex rel. Pasqua et al. v. Kan-Di-Ki LLC f/k/a Kan-Di-Ki Inc. d/b/a Diagnostic Laboratories and Radiology, Civ. Action No. 10 0965 JST (Rzx) (C.D. Cal.).  The claims resolved by this settlement are allegations only, and there has been no determination of liability.

Two individuals charged with running a telemarketing operation that defrauded Spanish-speaking consumers pleaded guilty today to one count of conspiracy to commit mail fraud, the Department of Justice and U.S. Postal Inspection Service (USPIS) announced.  Daniel Carrasco, 54, and Federico Martin Gioja, 45, both of Miramar, Fla., pleaded guilty in the U.S. District Court for the Southern District of Florida in Miami to charges alleging they owned and operated Florida companies that used a telemarketing sales room in Argentina to consistently lie to consumers about products they would receive and to threaten consequences of failure to pay for shipments.   

“The Department of Justice is committed to protecting consumers from fraud,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “As these guilty pleas demonstrate, we will be particularly vigilant towards schemes that target specific populations, and we will not be deterred by those who seek to evade detection by changing the name of their fraudulent companies.” 

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

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

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

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

"The U.S. Postal Inspection Service is committed to unraveling operations that scheme to defraud innocent people,” said Ronald Verrochio, U.S. Postal Inspector in Charge in Miami.  "Our postal inspectors aggressively investigate mail fraud scams such as this one, with a concerted effort to protect consumers.”

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

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

A Detroit federal grand jury returned an indictment against a Panasonic Automotive Systems Corporation executive for his role in an international conspiracy to fix prices of switches and steering angle sensors sold to Toyota and installed in U.S. cars, the Department of Justice announced today.

 
The indictment, filed today in U.S. District Court for the Eastern District of Michigan, in Detroit, charges that Shinichi Kotani, a Japanese national, participated in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for, and to fix, stabilize, and maintain the prices of, switches and steering angle sensors sold to Toyota Motor Corporation and Toyota Motor Engineering & Manufacturing North America Inc. for installation in vehicles manufactured and sold in the United States and elsewhere.  Kotani is the Director of Global Automotive Marketing and Sales at Panasonic.

 
Panasonic is an Osaka, Japan-based manufacturer of automotive parts, including steering wheel switches, turn switches, wiper switches, combination switches, and steering angle sensors Panasonic pleaded guilty in August 2013, to its role in the conspiracy and was sentenced to pay a $45.8 million criminal fine.

 
The indictment alleges, among other things, that from at least as early as January 2004 until at least February 2010, Kotani and his co-conspirators attended meetings to reach collusive agreements to rig bids, allocate the supply and fix the prices of switches and steering angle sensors sold to Toyota.  The indictment alleges that Kotani and his co-conspirators had further communications to monitor and enforce the collusive agreement.

 
“The Antitrust Division remains vigilant in its ongoing efforts to hold executives accountable when they engage in anticompetitive conduct that harms American consumers,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “As a result of the Antitrust Division’s ongoing investigation into bid rigging and price fixing in the auto parts industry, 19 executives have been charged.”

 
“I am proud of the hard work done by the FBI agents and the Department of Justice attorneys who worked on this case,” said John Robert Shoup, Acting Special Agent in Charge, FBI Detroit Division.  “The global resources of the FBI are always ready to respond when these complex financial conspiracies threaten our national economy.”

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

Including Kotani, 11 companies and 19 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry.  To date, more than $874 million in criminal fines have been imposed and 14 individuals have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each.  One other executive has agreed to serve time in prison and is scheduled to be sentenced on Sept. 25, 2013.

 
The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.

The United States filed a complaint yesterday asking a federal court in Atlanta to enjoin Joan Leger and her company, The 1804 Tax Group Inc., doing business as Liberty Tax Service, from preparing federal income tax returns for others, the Justice Department announced today.

The complaint alleges that since 2009 Leger, who resides in Stone Mountain, Ga., and the tax preparation businesses she owns have prepared almost 6,000 tax returns.  According to the complaint, Leger understates her customers’ tax liabilities and overstates their refunds by creating or inflating deductions, wages, income, expenses or credits in order to maximize the earned income tax credit,  in addition to wrongly claiming other credits and deductions.  Leger’s practices include fabricating losses for non-existent businesses or businesses not owned and operated by the taxpayer, falsely claiming unreimbursed business expenses and falsely claiming the educational tax credit.  In total, the government’s complaint alleges that the loss to the U.S. Treasury from Leger’s activities may exceed $2 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 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 .

Related Materials:

United States v. Joan Leger, etc.
Complaint for Permanent Injunction

Jason Glenn Thomas, 35, a former City of Tuscaloosa Police sergeant in Tuscaloosa, Ala., was sentenced today to serve ten years in federal prison followed by three years of supervised release for sexually assaulting a Tuscaloosa woman in violation of federal civil rights laws.  A special assessment of $100.00 was also imposed.

Thomas pleaded guilty on April 18, 2013 to willfully violating the civil rights of a woman in his custody.   According to court documents filed in connection with his guilty plea, Thomas admitted that shortly after midnight on May 28, 2011, he stopped and detained a female pedestrian without placing her under arrest.  Thomas then transported the woman in a department issued patrol vehicle to a remote area and sexually assaulted her.

“Officers who sexually assault individuals in their custody defy the public trust bestowed upon law enforcement officials, and their actions will not be tolerated,” said Jocelyn Samuels  Acting Assistant Attorney General for the Civil Rights Division.  “The Justice Department will continue to investigate and prosecute law enforcement officials that violate their oath to protect their communities.”

“Although most police officers serve and protect the public with integrity, we remain deeply committed to prosecuting those few who, as defendant Thomas did, dishonor their badge by using it to take advantage of those they are sworn to protect” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama.

This case was investigated by the Tuscaloosa resident agency of the FBI’s Birmingham Field Office, and was prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney George Martin for the Northern District of Alabama.

The Justice Department announced today that it will monitor the special municipal election on Sept. 24, 2013, in Hattiesburg, Miss.  The monitoring is designed to ensure compliance with the Voting Rights Act, which prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. 

Justice Department personnel will monitor polling place activities in Hattiesburg.  A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.

Each year, the department deploys federal observers from OPM, as well as departmental staff, to monitor elections across the country.  To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

Visit www.justice.gov/crt/about/vot/ for more information about the Voting Rights Act and other federal voting rights laws.

Jing Wang, 51, of Del Mar, Calif., a former Executive Vice President and President of Global Business Operations for Qualcomm Inc., was charged with insider trading in shares of both Qualcomm and Atheros Communications Inc. using a secret brokerage account and an offshore shell company in the British Virgin Islands.  Wang was also charged with conspiring with his brother, co-defendant Bing Wang, 53, and his former stock broker to obstruct an ongoing U.S. Securities and Exchange Commission (SEC) investigation and laundering the proceeds of his insider trading using a second offshore shell company and secret brokerage account.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California made the announcement.

“Insider trading is an insidious crime.  It undermines ordinary investors’ faith in our financial markets, and the Justice Department has zero tolerance for it,” said Acting Assistant Attorney General Raman.  “Today’s charges show that you cannot trade on inside information, pocket the profit, and expect to get away with it.  The Criminal Division has had a terrific partnership with the U.S. Attorney’s Office for the Southern District of California in this important investigation, and through partnerships like these throughout the country, we will continue to root out fraud in our markets at every level.”

“When there are two sets of rules – one for the powerful insiders and one for everybody else – the public quickly loses confidence in the stock market,” said U.S. Attorney Duffy. “We intend to restore confidence in our markets by making sure that everyone is playing by the same rules.”

Jing Wang was taken into custody by the FBI earlier today on these charges and is expected to make his initial appearance in federal court in the Southern District of California this afternoon.  A warrant has been issued for the arrest of Bing Wang, who is believed to be a citizen and resident of China.  Both men are charged in an indictment with conspiracy, which carries a maximum penalty of five years in prison. Jing Wang was also charged with securities fraud, money laundering and obstruction of official proceedings, which each carry a maximum penalty of 20 years in prison, and aggravated identity theft, which carries a mandatory two years in prison, consecutive to any other sentence.

The former stock broker, Gary Yin, was charged with conspiracy in a criminal information filed today in the Southern District of California and is expected to make his initial appearance on Sept. 24, 2013, at 10:00 a.m. in federal court in San Diego.

According to the indictment, Jing Wang used his Merrill Lynch broker, Yin, to create an offshore entity, Unicorn Global Enterprises, in the British Virgin Islands and to open a brokerage account for Unicorn at Merrill Lynch.  Jing Wang provided documents to Yin to create the false impression that his brother, Bing Wang, controlled the account, when in fact Jing Wang was the true owner of the account.  This allowed Jing Wang to conceal his true ownership and control of the assets in the account and to avoid reporting to U.S. tax authorities.  Significantly, it also allowed Jing Wang to disguise his involvement secreting tens of thousands of dollars for use in China.

The indictment alleges that after the creation of the Unicorn account, Jing Wang was named an Executive Vice President of Qualcomm and fell within the company’s insider trading restrictions for officers.  As an officer, Wang was exposed to Qualcomm’s confidential business information, and was repeatedly notified that he was not permitted to use material, non-public information to engage in stock transactions.

Among the inside information learned by Jing Wang because of his senior position was the fact that in the first quarter of 2010, Qualcomm was poised to announce an increased quarterly dividend and a stock repurchase program.  On March 1, 2010, Jing Wang allegedly acted on this material, non-public information and directed Yin to purchase as much Qualcomm stock as possible in the Unicorn account before the information became public.  After the close of trading on March 1, 2010, Qualcomm issued a press release announcing the dividend increase and stock repurchase program, and the company’s stock appreciated approximately 10 percent in value.

According to the indictment, Jing Wang next allegedly engaged in insider trading when he learned that Qualcomm was interested in purchasing Atheros.  On Dec. 1, 2010, acting on this information, Jing Wang met with Yin and instructed him to sell all Qualcomm shares in the Unicorn account.  Jing Wang then told Yin to make preparations to purchase Atheros with the funds in the account, but to wait for further confirmation.  Jing Wang’s broker proceeded to liquidate all of the illegally held Qualcomm stock in the Unicorn account, resulting in ill-gotten gains of approximately $94,709 from the earlier insider trading.

On Dec. 6, 2010, while attending a meeting of Qualcomm’s Board of Directors in Hong Kong, Jing Wang learned that the board had authorized Qualcomm to make a non-public offer to purchase Atheros for $45 per share.  Later that same day, Jing Wang allegedly called Yin in San Diego and instructed him to use all available funds in the secret Unicorn account to purchase Atheros stock.  The broker followed Jing Wang’s instructions and purchased 10,800 shares at approximately $34 per share, for a total of $366,766.

Qualcomm’s offer to purchase Atheros remained confidential until an article appeared in the Dealbook section of the New York Times’ website on Jan. 4, 2011, and Qualcomm made an official announcement of the deal on Jan. 5, 2011.  Between the close of trading on Jan. 3, 2011, and the close of trading on Jan. 5, 2011, the price of Atheros stock jumped from approximately $37 to $44.50 – an increase of  approximately 20 percent.

The indictment alleges that Jing Wang engaged in a third incident of insider trading on Jan. 25, 2011, when he learned that Qualcomm was about to release record financial results.  Immediately prior to announcement of those earnings, Jing Wang directed Yin to sell all the Atheros stock in the Unicorn account and purchase Qualcomm stock.  The broker sold all of Jing Wang’s illegally purchased Atheros stock for $44.60 per share, and used all of the proceeds to purchase Qualcomm stock at $50.87 per share.  The following day, after Qualcomm announced the record earnings results, Qualcomm’s stock price increased by approximately $4 per share.  All told, Jing Wang illegally gained approximately a quarter of a million dollars from these three illegal transactions.

The indictment and criminal information further allege that in order to conceal his insider trading, Jing Wang conspired with Yin and his brother, Bing Wang, to conceal Jing Wang’s control of the Unicorn account and his illegal purchases of Qualcomm and Atheros stock.  Yin and Bing Wang agreed to assist Jing Wang, and the three defendants engaged in a number of activities to obstruct any investigation of the trades, as well as to conceal Jing Wang’s control of the Unicorn account.  These obstructive acts included concocting a false cover story that would blame Bing Wang for the illegal trades in Qualcomm and Atheros, concealing Jing Wang’s actual control of the Unicorn account from Merrill Lynch, and transferring the proceeds of Jing Wang’s insider trading to another offshore entity nominally owned by Jing Wang’s mother.

For example, in carrying out the obstruction, the indictment alleges that in January 2012, Jing Wang forged the signature of his mother and used her identification documents to create another British Virgin Islands entity called Clearview Resources Ltd.  At Jing Wang’s instruction, Yin created a Merrill Lynch account for Clearview and attempted to further distance Jing Wang from the transactions by transferring all of the money in the Unicorn account to the Clearview account in a series of structured transactions.

Another example of obstructive conduct alleged in the indictment took place in March 2012, when Jing Wang met with Yin and explained that the SEC was investigating Qualcomm. At that time, Jing Wang told Yin he was worried that his control of the Unicorn account and insider trading would be discovered.  By that time, the SEC had already issued a subpoena to Jing Wang calling for him to produce information about any brokerage accounts he controlled.  Jing Wang pressed Yin to stick to the false cover story he had created earlier – that his brother, Bing Wang, had made the illegal trades.  Soon afterwards, Jing Wang gave Yin a number of Merrill Lynch documents related to his Unicorn account and directed Yin to take the documents to China, give them to Bing Wang, and help his brother use them to corroborate the false cover story.  Yin agreed, and during two trips to China in 2012, Yin met with Bing Wang, provided him with Unicorn documents removed from the United States, and rehearsed the false cover story.  The indictment further alleges that after these meetings, Bing Wang and Yin sent emails to each other containing false and misleading statements in order to make it appear that Bing Wang actually controlled the Unicorn and Clearview accounts.

This case was investigated by the FBI and the Internal Revenue Service–Criminal Investigation.  The SEC’s Los Angeles Regional Office also provided assistance, and the SEC today filed a civil complaint against Jing Wang and Yin in federal court in San Diego.

This case is being prosecuted by Trial Attorney James McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Eric J. Beste, John Parmley and Timothy Perry of the Southern District of California.

Donald John Sachtleben, a former FBI bomb technician who later worked as a government contractor for the agency, has filed a petition to plead guilty to newly filed charges of unlawfully disclosing national defense information relating to a disrupted terrorist plot. Sachtleben previously had filed a petition to plead guilty to charges of possessing and distributing child pornography resulting from a separate investigation.

Sachtleben, 55, of Carmel, Ind., has signed plea agreements in both cases. The documents were filed today in the U.S. District Court for the Southern District of Indiana. Charges in the national security case were filed today, and charges in the child pornography case were filed in May 2012.

 The developments were announced by Deputy Attorney General James M. Cole; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia Joseph H. Hogsett, U.S. Attorney for the Southern District of Indiana, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.

 The plea agreements signed by the parties would resolve both cases in court proceedings in Indiana. The agreements, which are contingent upon the Court’s approval, call for Sachtleben to plead guilty to the two national security charges as well as the two child pornography offenses. The plea agreements call for Sachtleben to be sentenced to a total of 140 months of incarceration, including a 43-month prison term for the national security offenses and a consecutive 97-month term for the child pornography charges.

 The statements of offense related to both the national defense charges and the child pornography charges are attached.

 “This unauthorized and unjustifiable disclosure severely jeopardized national security and put lives at risk,” Deputy Attorney General Cole said. “To keep the country safe, the department must enforce the law against such critical and dangerous leaks, while respecting the important role of the press under the department’s media guidelines and any shield law enacted by Congress. I am grateful to the FBI and the U.S. Attorneys’ offices in both Washington, D.C., and Indiana for their excellent and dedicated work on this case.”

 “Fifteen months ago, we were given the task of uncovering who had threatened a sensitive intelligence operation and endangered lives by illegally disclosing classified information relating to a disrupted al-Qaeda suicide bomb plot,” said U.S. Attorney Machen. “That plot could not have been more serious, as it targeted a plane bound for the United States.  After unprecedented investigative efforts by prosecutors and FBI agents and analysts, today Donald Sachtleben has been charged with this egregious betrayal of our national security. This prosecution demonstrates our deep resolve to hold accountable anyone who would violate their solemn duty to protect our nation’s secrets and to prevent future, potentially devastating leaks by those who would wantonly ignore their obligations to safeguard classified information.”

 “The allegations in this case describe the defendant’s repeated violation of a sacred trust that the public had placed in him,” said U.S. Attorney Hogsett. “With these charges, a message has been sent that this type of behavior is completely unacceptable and no person is above the law.”

 “Today, Mr. Sachtleben has been charged with knowingly and willfully disclosing national defense  information to a member of the media,” said Assistant Director in Charge Parlave. “These charges are the result of a careful and thorough investigation by FBI Special Agents and analysts who, together with federal prosecutors, systematically conducted more than 500 interviews and, following that exhaustive process, analyzed relevant telephone records obtained by subpoena.  After analysis of the telephone records, investigators identified him as the source of this unlawful disclosure. The FBI will continue to take all necessary steps to pursue such individuals who put the security of our nation and the lives of others at risk by their disclosure of sensitive information.” 

National Security Case:

 According to a criminal information filed today, on May 2, 2012, nine days before Sachtleben was arrested in Indiana on child pornography charges, Sachtleben knowingly and willfully disclosed national defense information to a reporter for a national news organization not entitled to receive it.  The charging document alleges that Sachtleben had reason to believe that this information could be used to the injury of the United States and to the advantage of a foreign nation. The criminal information also charges him with willfully retaining documents relating to the national defense without authorization.

 Sachtleben worked for the FBI from 1983 through 2008. During his career, he was a Special Agent Bomb Technician and was assigned to work on many major cases involving terrorist attacks. In his work as an FBI employee, Sachtleben held a Top Secret security clearance and had regular access to classified and national defense information relating to the FBI’s activities, as well as the activities of other members of the U.S. intelligence community.

 In 2008, Sachtleben retired from the FBI and was rehired as a contractor. Because of his official responsibilities, he maintained his Top Secret security clearance as an FBI contractor. As a result, he continued to have regular access to classified and national defense information relating to the FBI’s activities, as well as the activities of other members of the U.S. intelligence community.  As a contractor, he routinely visited the FBI Lab in Quantico, Va. 

One of the criminal charges involves Sachtleben’s contacts with the reporter relating to the disruption of a plot to conduct a suicide bomb attack on a U.S.-bound airliner by the Yemen-based terrorist organization Al-Qaeda in the Arabian Peninsula and the recovery by the United States of a bomb in connection with that plot.  As a result of Sachtleben’s disclosure of national defense information to the reporter, the national security of the United States was compromised,  a significant international intelligence operation was placed in jeopardy, and lives were put at risk.

 Sachtleben was identified as a suspect in the case of this unauthorized disclosure only after toll records for phone numbers related to the reporter were obtained through a subpoena and compared to other evidence collected during the leak investigation. This allowed investigators to obtain a search warrant authorizing a more exhaustive search of Sachtleben’s cell phone, computer, and other electronic media, which were in the possession of federal investigators due to the child pornography investigation.

 Sachtleben was employed as an FBI contractor until on or about May 11, 2012. The following day, he was arrested in Indiana and charged by complaint with the federal child pornography charges.

Child Pornography Case:

 According to a criminal complaint filed in Indiana in May 2012, federal and state investigators became aware of an individual trading images of child pornography online in September 2010. An extensive investigation into that individual led to the arrest of a defendant in Illinois in January 2012. Upon arrest, a forensic search of that defendant’s computer equipment and email accounts allegedly revealed that he had been actively trading the explicit materials online with numerous other people.

 Based on that information, law enforcement traced the alleged online activity to Sachtleben’s home in Carmel. After conducting several days of surveillance, a search warrant was executed on May 11, 2012, by law enforcement officers from the Indiana State Police and the FBI Cyber Crime Task Force. Sachtleben was charged in the Southern District of Indiana with possession and distribution of child pornography.

 The complaint alleges that an initial forensic examination of Sachtleben’s laptop computer revealed the presence of approximately 30 images and video files containing child pornography. It is alleged that a number of files identified during this initial search matched those that had been found in the course of investigating the Illinois defendant. The complaint further alleges that the laptop’s hard drive contained references to other files known to have been in the possession of the Illinois defendant.

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A criminal complaint and a criminal information are only charges and are not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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 The national security investigation was conducted by the FBI’s Washington Field Office with assistance from the FBI’s Indianapolis Field Office. The prosecution is being handled by Assistant U.S. Attorneys Jonathan M. Malis and G. Michael Harvey of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Richard S. Scott of the Counterespionage Section of the Justice Department’s National Security Division. Assistance was provided by Assistant U.S. Attorney Mona N. Sahaf of the U.S. Attorney’s Office for the District of Columbia, and Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office for the Southern District of Indiana, who is also prosecuting the child pornography case.

 The child pornography investigation was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more on Project Safe Childhood, visit www.projectsafechildhood.gov.

Related Materials:

Statement of Offense - National Security
Factual Basis - Child Pornography