District Not Recorded

Lea’Tice Phillips, of Montgomery County, Ala., was sentenced to serve 94 months of incarceration today, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.  Phillips was also ordered to pay restitution of $567,631.  Phillips had pleaded guilty to one count of wire fraud and one count of aggravated identity theft on May 30, 2013, for her role in a stolen identity refund fraud scheme.  

According to the court documents, Lea’Tice Phillips worked for an Alabama state agency and had access to state databases that contained forms of identification of individuals.  Between October 2009 and April 2012, Phillips conspired with Antoinette Djonret and others to file false tax returns using stolen identities.  On multiple occasions, Phillips accessed a state database to obtain identification which she then sent to Djonret using her state email.  Djonret and others used the stolen identification to file false tax returns, mostly from Djonret’s residence in Montgomery.  Djonret and her co-conspirators used an elaborate network of individuals to launder the tax refunds.  They recruited individuals to purchase prepaid debit cards on their behalf.  Fraudulently obtained tax refunds were directed to the prepaid debit cards that Djonret and her co-conspirators used to obtain the proceeds.  Some of the prepaid debit cards were in the name of Phillips.  In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds.   Antoinette Djonret was sentenced to serve 12 years in prison for her role in the conspiracy. 

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

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

Total Petrochemical USA Inc. (Total) will pay an $8.75 million penalty for failing to comply with the terms of a 2007 settlement with the United States that resolved alleged violations of the Clean Air Act at its Port Arthur, Texas, refinery, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.

Between 2007 and 2011, Total violated numerous requirements of the 2007 settlement, including failing to comply with emissions limits for benzene, a harmful air pollutant.  The company also failed to perform corrective actions or to analyze the cause of over 70 incidents involving emissions of hazardous gases through flaring.  EPA discovered the violations through a review of the quarterly compliance reports required by the 2007 settlement.

The 2007 settlement required that Total pay a $2.9 million penalty and make upgrades to its facility to reduce emissions of harmful air pollution to resolve Clean Air Act violations.  The 2007 settlement further required that Total upgrade leak detection and repair practices and implement programs to minimize flaring, which can result in emissions of gases that can cause serious respiratory problems and exacerbate asthma. 

“Total failed repeatedly to adhere to obligations they willingly took on when they settled with the United States in 2007.  These are court-enforceable requirements for the protection of the health of their Texas neighbors, not simply the cost of doing business,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “Companies that settle with the United States must meet their obligations or there will be consequences, as this significant penalty demonstrates.”

“EPA has been working with local officials, community leaders and organizers, and local industry to improve living conditions for residents of Port Arthur.  These efforts have already produced results, especially with the opening of the Westside Health Clinic,” said EPA Regional Administrator Ron Curry.  “Clean air is essential for keeping communities healthy.  EPA will continue its efforts to hold companies accountable for violating our nation’s environmental laws and meeting our enforcement orders and decrees.”

In addition to the penalty, today’s action extends the requirement that Total comply with a lower benzene emissions limit for an additional two years.  The enhanced limit for benzene, which is 30 percent lower than the federal limit, was initially required by the 2007 settlement.  In addition, Total must hire a third-party to audit its compliance under the settlement and must implement a company task force to monitor its compliance.

Reducing illegal emissions of toxic air pollutants at facilities that have a significant impact on air quality and health in communities is one of EPA’s national enforcement priorities.

Exposure to high concentrations of sulfur dioxide (SO2), a key pollutant emitted from refineries, can affect breathing and aggravate existing respiratory and cardiovascular disease, particularly in children and in the elderly.  SO2 is converted in the air into fine particulate matter, which can harm health through decreased lung function, aggravated asthma, and premature death in people with heart or lung disease.  Chronic exposure to benzene, a volatile organic compound which EPA classifies as a carcinogen, can cause numerous health impacts, including leukemia and adverse reproductive effects in women.

Total is a refiner and petrochemical manufacturer whose products include automotive fuels, lubricants and liquefied petroleum gas Total processes approximately 230,000 barrels per day of crude oil.  

The settlement, lodged in the U.S. District Court for the Eastern District of Texas, is subject to a 30-day public comment period and court approval.  The settlement will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html .  The claims resolved by this settlement are only allegations and there has been no determination of liability.

Today the Department of Justice filed a complaint and a simultaneous settlement agreement  in the District Court for the Eastern District of Virginia to ensure that prisoners at the Piedmont Regional Jail in Farmville, Va., receive appropriate medical and mental health care.  In March 2011, the Justice Department launched an investigation, using its authority under the Civil Rights of Institutionalized Persons Act (CRIPA), into allegations that the Piedmont Regional Jail was not providing prisoners with constitutionally adequate medical care.  In September 2012, the Justice Department released its findings that deficiencies in medical and mental health care at the jail exposed prisoners to an unreasonable risk of serious harm, and thus violated the Constitution.  Among other things, the Department found inadequate staffing; insufficient procedures to screen and assess medical and mental health problems; and the absence of a chronic care program to treat conditions such as seizures, heart disease and hypertension.  The agreement filed today resolves the Justice Department’s investigation of the Piedmont Regional Jail.

The agreement requires the jail to employ adequate, and sufficiently-credentialed, medical and mental health personnel; perform timely screening and appropriate health assessments of prisoners; establish a chronic care program and an acceptable sick call process; provide clear policies and sufficient training to its staff; exclude certain essential services and follow-up services from co-payments, and otherwise reduce co-payments so that prisoners are not deterred from seeking needed health care.  The agreement also requires the jail to develop and track data to analyze the performance of medical and mental health staff and work with an independent monitor to implement the changes described in the agreement and to evaluate the jail’s success in effecting meaningful reform.

 “While an offender is serving his or her sentence, the government  has a duty under the Constitution to make sure that person does not suffer unreasonably, by providing sufficient medical and mental health care,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division of the Department of Justice.   “We commend the Piedmont Regional Jail Authority and the leadership at the Jail for their cooperation and for taking the necessary steps to ensure the health and safety of the individuals under their care.”

The investigation was conducted by the Special Litigation Section of the Department of Justice’s Civil Rights Division.  Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt .   

On Friday, the Court of Federal Claims in Washington, D.C., ruled that a subsidiary of the BB&T Corporation was not entitled to $660 million in tax benefits that BB&T claimed based on its participation in an abusive tax shelter known as Structured Trust Advantaged Repackaged Securities (STARS).  Judge Thomas C. Wheeler, who delivered the opinion of the Court, imposed $112 million in penalties. 

Barclays Bank PLC and KPMG LLP jointly developed and marketed the STARS transaction to subvert the foreign tax credit rules and generate illicit tax benefits to be shared among the transaction’s participants.  BB&T additionally employed Sidley & Austin LLP to provide  tax advice supporting the transaction.  After hearing evidence during a month-long trial in March, Judge Wheeler ruled for the United States “on all grounds,” determining that BB&T, Barclays, KPMG and Sidley Austin’s conduct with regard to STARS was “nothing short of reprehensible,” and that the considerable effort put into the transaction was a “waste of human potential.”  

“It is an affront to all taxpayers who work hard and do the right thing when our largest corporations rely on abusive schemes to avoid paying their fair share of taxes,” said Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division, hailing the Court of Federal Claims’ opinion.  “Today’s ruling sends a strong message that no matter how sophisticated the scheme, these sham tax shelters will not stand.”

Assistant Attorney General Keneally thanked the agents and attorneys at the Internal Revenue Service who assisted the Justice Department, as well as Tax Division Senior Litigation Counsel Dennis Donohue, Trial Attorneys John Schoenecker, Kari Larson, Raagnee Beri, William Farrior, and Special Attorney Allen Kline.

Child Cyber Safety Night at the Ballpark is the latest effort by the Justice Department and its law enforcement and community partners to encourage parents to speak with their children about online and cell phone safety and provide prevention materials.  As part of the event, the Department will receive the Washington Nationals Spirit Award. Deputy Attorney General James Cole will be recognized in an on field ceremony at Nationals Park along with Office of Juvenile Justice and Delinquency Prevention Administrator Robert L. Listenbee, Assistant Director in Charge of the FBI Washington Field Office Valerie Parlave and public outreach organization I Know Better founder Steve Schankman.  

The spirit award will be announced at 6:20 p.m. Saturday, Sept. 21, 2013, before the 7:05 p.m. Major League Baseball game between the Washington Nationals and the Miami Marlins. 

In a new public service announcement to be released at the game, Attorney General Eric Holder will emphasize the importance of creating an ongoing dialogue with children about safe use of technology.  

“As a parent, I understand the opportunities – and the challenges – that new technologies present for America’s young people.  It’s up to each of us to start a dialogue with our kids about safe Internet and cell phone practices,” said Attorney General Holder in the public service announcement.  “Together, we can ensure that our kids are safe and protected – both online and off.”

Resources for parents and children will be available at the Community Clubhouse at the Center Field Plaza when the gates open Saturday through the 3rd inning of the game. 
OJJDP provides national leadership, coordination and resources to prevent and respond to juvenile delinquency and victimization. 
For more on Internet and cell phone safety, please visit: www.projectyouthsafety.org/cybersafe.

Press inquiries regarding logistics should be directed to Alex Schauffler at Alexandra.Schauffler@nationals.com and Kelly McMahon at kelly@INOBTR.org.

A Dominican national was sentenced today to serve 42 months in prison for her role in trafficking the identities of Puerto Rican U.S. citizens and corresponding identity documents, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Rosa E. Rodríguez-Vélez of the District of Puerto Rico; Acting Director John Sandweg of U.S. Immigration and Customs Enforcement (ICE); Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS); Director Gregory B. Starr of the U.S. State Department’s Diplomatic Security Service (DSS); and Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber.

Arelis Abreu-Ramos, formerly of Philadelphia, was sentenced by U.S. District Judge Gustavo A. Gelpí in the District of Puerto Rico.  In addition to Abreu-Ramos’s prison term, Judge Gelpí ordered her removal from the United States to the Dominican Republic after the completion of her sentence. 

On June 13, 2013, Abreu-Ramos pleaded guilty in Puerto Rico to one count of conspiracy to commit identification fraud and one count of conspiracy to commit human smuggling for financial gain.

Abreu-Ramos was charged in a superseding indictment returned by a federal grand jury in Puerto Rico on March 22, 2012.  To date, a total of 53 individuals have been charged for their roles in the identity trafficking scheme, and 42 defendants have pleaded guilty.

Court documents allege that individuals located in the Savarona area of Caguas, Puerto Rico (Savarona suppliers), obtained Puerto Rican identities and corresponding identity documents.  Other conspirators located in various cities throughout the United States (identity brokers) allegedly solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set.  The superseding indictment alleges that identity brokers ordered the identity documents from the Savarona suppliers, on behalf of the customers, by making coded telephone calls.  The conspirators are charged with using text messages, money transfer services, and express, priority or regular U.S. mail to complete their illicit transactions.

Court documents allege that some of the conspirators assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation.  Their customers generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses.  Some customers allegedly obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.

According to court documents, various identity brokers were operating in Rockford, Ill.; DeKalb, Ill.; Aurora, Ill.; Seymour, Ind.; Columbus, Ind.; Indianapolis; Hartford, Conn.; Clewiston, Fla.; Lilburn, Ga.; Norcross, Ga.; Salisbury, Md.; Columbus, Ohio; Fairfield, Ohio; Dorchester, Mass.; Lawrence, Mass.; Salem, Mass.; Worcester, Mass.; Grand Rapids, Mich.; Nebraska City, Neb.; Elizabeth, N.J.; Burlington, N.C.; Hickory, N.C.; Hazelton, Pa.; Philadelphia; Houston; Abingdon, Va.; Albertville, Ala.; and Providence, R.I.

Abreu-Ramos admitted that she operated as an identity broker in the Philadelphia area, and that she was a manager and supervisor in the conspiracy.  According to court documents, in June 2011, an unauthorized alien in Arlington, Va., applied for a U.S. passport using legitimate Puerto Rico identity documents that had been supplied by Abreu-Ramos.  Law enforcement agents uncovered the fraudulent application and prevented the issuance of the U.S. passport. 

Abreu-Ramos is the 29th defendant to be sentenced in this case.

The charges are the result of Operation Island Express, an ongoing, nationally-coordinated investigation led by the ICE Homeland Security Investigations (ICE-HSI) Chicago Office and USPIS, DSS and IRS-CI offices in Chicago, in coordination with the ICE-HSI San Juan Office and the DSS Resident Office in Puerto Rico.  The Illinois Secretary of State Police; Elgin, Ill., Police Department; Seymour, Ind., Police Department; and Indiana State Police provided substantial assistance.  The ICE-HSI Assistant Attaché office in the Dominican Republic and International Organized Crime Intelligence and Operations Center (IOC-2) as well as various ICE, USPIS, DSS and IRS-CI offices around the country provided invaluable support.

The case is being prosecuted by Trial Attorneys James S. Yoon, Hope S. Olds, Courtney B. Schaefer and Christina Giffin of the Criminal Division’s Human Rights and Special Prosecutions Section, with the assistance of the Criminal Division’s Asset Forfeiture and Money Laundering Section, and the support of the U.S. Attorney’s Office for the District of Puerto Rico.  The U.S. Attorney’s Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, District of Massachusetts, District of Nebraska, Middle District of North Carolina, Southern District of Ohio, Middle District of Pennsylvania, District of Rhode Island, Southern District of Texas and Western District of Virginia provided substantial assistance.

Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html .  Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline .  Anyone who may have information about particular crimes in this case should also report it to the ICE tip line or website.

Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft .  Additional resources regarding identity theft can be found at www.ojp.usdoj.gov/ovc/pubs/ID_theft/idtheft.html ; www.ssa.gov/pubs/10064.html ;  www.fbi.gov/about-us/investigate/cyber/identity_theft ; and www.irs.gov/privacy/article/0,,id=186436,00.html .

A federal grand jury in Detroit returned an indictment against two Fujikura Ltd. executives for their roles in an international conspiracy to fix prices of auto parts used in automotive wire harnesses sold to Subaru 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 Ryoji Fukudome and Toshihiko Nagashima, both Japanese nationals, with participating in a conspiracy to fix prices of automotive wire harnesses sold to Fuji Heavy Industries–an automaker more commonly known by its brand name, Subaru–for installation in automobiles sold in the United States and elsewhere.

Fukudome was employed by Fujikura as general manager of the Automotive Global Marketing Department from April 2001 to April 2006 and Nagashima was employed by Fujikura as manager of the Fujikura Wire Harness Center in Ohta, Japan, from July 1994 to April 2006, and as general manager of the Automotive Global Marketing Department from April 2006 to April 2009.

Fujikura is a Toyko-based manufacturer of automotive wire harnesses.  Automotive wire harnesses are automotive electrical distribution systems used to direct and control electronic components, wiring and circuit boards.  Fujikura pleaded guilty to its role in the conspiracy in June 2012, and was sentenced to pay a $20 million criminal fine.

The indictment alleges, among other things, that from at least as early as September 2005 until at least February 2010, Fukudome, Nagashima and their co-conspirators attended meetings in Japan to reach collusive agreements to rig bids and allocate the supply of automotive wire harnesses sold to Subaru.  The indictment alleges that Fukudome, Nagashima and their co-conspirators had further communications to monitor and enforce the collusive agreements.

“International cartels targeting U.S. businesses and consumers pose a serious threat to our competitive market place,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The Antitrust Division is working closely with competition enforcers abroad to ensure that there are no safe harbors for executives who engage in international cartel crimes.”
 
“Those who engage in price fixing, bid rigging and other fraudulent schemes harm the automotive industry by driving up costs for vehicle makers and buyers,” said John Robert Shoup, Acting Special Agent in Charge, FBI Detroit Division.  “The FBI is committed to pursuing and prosecuting these individuals for their crimes.”

Fukudome and Nagashima are 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 Fukudome and Nagashima, 11 companies and 18 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 prison 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 Justice Department and the Internal Revenue Service (IRS) announced that a federal grand jury in Providence, R.I., returned a five-count indictment yesterday charging John Fall of Milton, Mass., with one count of corruptly endeavoring to obstruct and impede the IRS, one count of tax evasion and three counts of aiding and assisting in the preparation and filing of false corporate and individual tax returns.  The indictment was unsealed today following Fall’s arrest.

According to the indictment, Fall was a real estate consultant who bought, sold and brokered real estate.  Fall also participated in handling the financial affairs of his wife and her businesses, including her dental practice, Comfort Dental Inc., as well as Broad Street Investments.  The indictment alleges that between 1999 and 2010, Fall used numerous nominees and business names to conceal his business and financial transactions.  Fall also used multiple bank accounts, including commingled or “warehouse” bank accounts, in at least four states throughout the country, all in order to conceal his financial transactions as well as certain financial transactions of Comfort Dental and Broad Street Investments.  To further disguise business and financial transactions, court documents allege that Fall used fake names and aliases to conceal his ownership and control over his nominee entities.

The indictment alleges that Fall filed false returns for 1998 and 1999, and failed to file any return for the years 2000 through 2010.  The IRS audited Fall for the 1998 through 2000, assessing him taxes collectively totaling approximately $72,000.  According to the indictment, Fall committed tax evasion by attempting to thwart IRS collection of these taxes by using multiple nominees, business names and fake names and aliases to disguise financial transactions and title assets, by using commingled bank accounts, by making extensive use of cash and by causing to be filed false and fraudulent documents in federal court disclaiming ownership and control over funds sought by the IRS to pay the taxes he owed.  

The indictment further alleges that Fall caused tax returns that were filed by Comfort Dental for the years 2005 through 2007, as well as his wife’s individual tax returns for 2005 and 2006 to be false.  Fall caused his wife’s businesses to make payments to his various entities which were falsely recorded as deductible business expenses.  According to court documents, Fall also caused his wife’s individual tax return to reflect a capital loss for tax year 2006 when, according to the indictment, she received a capital gain on the sale of property.   

When Comfort Dental and Fall’s wife were audited between 2008 and 2009, the indictment alleges that Fall attempted to obstruct the audit by encouraging his wife’s accountant not to provide the IRS with information requested through a summons, and by providing false and fraudulent information and documentation to the IRS concerning the nature of the payments by Comfort Dental and Broad Street Investments to his various entities.  Fall also attempted to obstruct his wife’s compliance with an IRS summons. 

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  The tax evasion charge carries a maximum sentence of five years imprisonment and a $250,000 fine.  The IRS obstruction charge and the aiding and abetting of false returns charges each carry a maximum sentence of three years imprisonment and a $250,000 fine. 

This case was investigated by special agents with the IRS – Criminal Investigation.  The case is being prosecuted by Assistant Chief John Kane and Trial Attorney Christopher O’Donnell with the Justice Department’s Tax Division.

Halliburton Energy Services Inc. (Halliburton) pleaded guilty today to destroying evidence pertaining to the 2010 Deepwater Horizon disaster and was sentenced to the statutory maximum fine, the Justice Department announced.

In addition, a criminal information was filed today charging a former Halliburton manager, Anthony Badalamenti, 61, of Katy, Texas, with one count of destruction of evidence. 

“These announcements mark the latest steps forward in the Justice Department’s efforts to achieve justice on behalf of all those affected by the Deepwater Horizon explosion, oil spill, and environmental disaster,” said Attorney General Eric Holder.  “Halliburton and one of its managers have now been held criminally accountable for their misconduct, underscoring our continued commitment to ensuring that the victims of this tragedy obtain justice, and to safeguarding the integrity of relevant evidence.  I am grateful to all of the Justice Department leaders, federal investigative agency partners, and state and local allies whose tireless work made this outcome possible – and whose daily efforts will help to prevent such incidents from happening in the future.”

“Halliburton destroyed evidence during the investigation of the largest environmental disaster in U.S. history, and now both the company and the Halliburton manager who ordered the destruction are being held to account,” said Acting Assistant Attorney General Mythili Raman of the Criminal Division.  “I am grateful for the tenacious work of the Deepwater Horizon Task Force prosecutors and investigators who have worked tirelessly on this and other Deepwater Horizon matters to ensure that justice is brought to the people of the Gulf Coast and to the families of the eleven men who perished on April 20, 2010.”

Halliburton’s guilty plea was accepted, and its sentence was imposed, by U.S. District Judge Jane Triche Milazzo of the Eastern District of Louisiana.  During the guilty plea and sentencing proceeding today, Judge Milazzo found, among other things, that the sentence appropriately reflects Halliburton’s offense conduct.  Judge Milazzo also noted that the statutory maximum fine and three year probationary period provide just punishment and appropriate deterrence, and noted Halliburton's self-reporting of the misconduct, substantial and valuable cooperation in the government's investigation, and substantial efforts to recover the deleted data.

According to court documents, on April 20, 2010, while stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions and fire, which resulted in the deaths of 11 rig workers and the largest oil spill in U.S. history.  Following the blowout, Halliburton conducted its own review of various technical aspects of the well’s design and construction.  On or about May 3, 2010, Halliburton established an internal working group to examine the Macondo well blowout, including whether the number of centralizers used on the final production casing could have contributed to the blowout.  A production casing is a long, heavy metal pipe set across the area of the oil and natural gas reservoir.  Centralizers are metal devices that protrude from various intervals of the casing strings of a well, which can help keep the casing centered in the wellbore away from the surrounding walls as it is lowered and placed in the well.  Centralization can be significant to the quality of subsequent cementing around the bottom of the casing.  Prior to the blowout, Halliburton had recommended to BP the use of 21 centralizers in the Macondo well.  BP opted to use six centralizers instead.  

As detailed variously in the charging instruments filed against Halliburton and against Badalamenti, during the relevant time period Badalamenti was Halliburton’s cementing technology director.  In May 2010, in connection with Halliburton’s internal post-incident examination of the Macondo well, Badalamenti directed a senior program manager for Halliburton’s Cement Product Line (Program Manager) to run two computer simulations of the Macondo well final cementing job using Halliburton’s Displace 3D simulation program.  Displace 3D was a next-generation simulation program that was being developed to model fluid interfaces and their movement through the wellbore and annulus of a well.  The modeling sought to compare the 21 centralizers Halliburton had recommended to BP versus the six centralizers BP ultimately used.  As detailed in the charging documents, the simulations indicated to those present that there was little difference between using six and 21 centralizers on the Macondo well.  Badalamenti directed Program Manager to destroy these results, and Program Manager did so.

In or about June 2010, similar evidence was also destroyed in a later incident.  Badalamenti asked another, more experienced, employee (“Employee 1”) to run simulations again comparing six versus 21 centralizers.  Employee 1 reached the same conclusion.  Badalamenti then directed Employee 1 to “get rid of” the simulations, and, after a period of delay, Employee 1 deleted them from his computer.

Efforts to forensically recover the original destroyed Displace 3D computer simulations during ensuing civil litigation and federal criminal investigation by the Deepwater Horizon Task Force were unsuccessful.

Halliburton’s guilty plea and sentence, and the criminal charge announced today against Badalamenti, are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill.  The Deepwater Horizon Task Force, based in New Orleans, is supervised by Acting Assistant Attorney General Mythili Raman and led by John D. Buretta, who serves as the director of the task force.  The task force includes prosecutors from the Criminal Division and the Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana and other U.S. Attorney’s Offices; and investigating agents from:  the FBI; Department of the Interior, Office of Inspector General; Environmental Protection Agency, Criminal Investigation Division; Environmental Protection Agency, Office of Inspector General; National Oceanic and Atmospheric Administration, Office of Law Enforcement; U.S. Coast Guard; U.S. Fish and Wildlife Service; and the Louisiana Department of Environmental Quality.

The case is being prosecuted by Deepwater Horizon Task Force Director Buretta, Deputy Director William Pericak, and Task Force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black and Rohan Virginkar.

An information is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

The Department of Justice and U.S. Environmental Protection Agency (EPA) announced that Houston-based CITGO Petroleum Corp. (CITGO) has agreed to pay a $737,000 civil penalty and to implement projects to reduce harmful air pollution, resolving alleged violations of the Clean Air Act (CAA) at its petroleum refining facilities located in Lemont, Ill., and Lake Charles (Westlake), La.

In addition to the penalty, today’s settlement, lodged in U.S. District Court for the Southern District of Texas, requires that CITGO implement projects that are expected to reduce emissions of volatile organic compounds (VOCs), including toxics, by more than 100 tons over the next five years.

“The terms of this settlement require projects to significantly reduce harmful air pollution, including reductions in benzene emissions and other cancer-causing air toxics,” said Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division.  “This agreement will benefit communities across the United States with cleaner healthier air and will bring mobile sources of pollution under control, according to the standards of the Clean Air Act.”

“Producing fuel for cars sold in the U.S. carries a requirement to meet Clean Air Act standards,” said Cynthia Giles, Assistant Administrator for EPA's Office of Enforcement and Compliance Assurance.  “The innovative technologies that CITGO is required to install will reduce the impact of its fuel production on the environment and help protect communities from harmful air pollution.”

To reduce VOC emissions, including toxics, the settlement requires that CITGO install and maintain a geodesic dome on one of the fuel storage tanks at its Lemont refinery, as well as carbon adsorption systems on two fuel storage tanks at its Lake Charles refinery.

In a complaint filed at the same time as the settlement, EPA alleged that the Lake Charles refinery produced fuel that exceeded the refinery’s annual average emissions limit for mobile source air toxics, including benzene.  EPA further alleged that CITGO failed to sample and test reformulated gasoline blendstock at its Lemont refinery, as required by the CAA.

The CAA requires that all fuel produced, imported, and sold in the United States meet certain emissions standards for harmful pollutants, such as benzene and other cancer-causing air toxics.  Air toxics emissions from vehicles and other mobile sources are of particular concern in the areas closest to where they are emitted, but can also be transported long distances, affecting the health and welfare of people in other geographic areas.  Some of these toxic compounds can persist in the environment and bioaccumulate in the food chain, further spreading their harmful effects.

The sampling, testing, recordkeeping, and reporting requirements of the fuels program provide the foundation for EPA’s compliance program.  Refiners that violate these requirements undermine the integrity of the fuels regulations and hinder the Agency’s ability to ensure gasoline complies with fuel quality and performance standards, potentially leading to an increase in harmful air pollution.  Today’s settlement supports EPA’s efforts to reduce toxic air pollution from facilities that threaten communities and the environment.

CITGO is a refiner and marketer of transportation fuels, lubricants, petrochemicals and other industrial products.  CITGO is owned by PDV America Inc., an indirect, wholly-owned subsidiary of Petróleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela.

The settlement is subject to a 30-day public comment period and final court approval.  It will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html.

More information on the settlement:  www2.epa.gov/enforcement/citgo-petroleum-corporation-clean-air-act-settlement.

UBS Securities Japan Co. Ltd. (UBS Securities Japan), an investment bank, financial advisory securities firm and wholly-owned subsidiary of UBS AG, was sentenced today for its role in manipulating the London Interbank Offered Rate (LIBOR), a leading benchmark used in financial products and transactions around the world, the Justice Department announced.

UBS Securities Japan was sentenced by U.S. District Judge Robert N. Chatigny in the District of Connecticut.  UBS Securities Japan pleaded guilty on Dec. 19, 2012, to one count of engaging in a scheme to defraud counterparties to interest rate derivative trades by secretly manipulating LIBOR benchmark interest rates.  UBS Securities Japan signed a plea agreement with the government in which it admitted its criminal conduct and agreed to pay a $100 million fine, which the court accepted in imposing sentence.  In addition, UBS AG, the Zurich-based parent company of UBS Securities Japan, entered into a non-prosecution agreement (NPA) with the government requiring UBS AG to pay an additional $400 million penalty, to admit and accept responsibility for its misconduct as set forth in an extensive statement of facts and to continue cooperating with the Justice Department in its ongoing investigation.  The NPA reflects UBS AG’s substantial cooperation in discovering and disclosing LIBOR misconduct within the financial institution and recognizes the significant remedial measures undertaken by new management to enhance internal controls.

Together with approximately $1 billion in regulatory penalties and disgorgement – $700 million as a result of a Commodity Futures Trading Commission (CFTC) action; $259.2 million as a result of a U.K. Financial Conduct Authority (FCA) action; and $64.3 million as a result of a Swiss Financial Market Supervisory Authority (FINMA) action – the Justice Department’s criminal penalties bring the total amount of the resolution to more than $1.5 billion.

“This action, and the resulting sentence, prove that no individual or firm is above the law – no matter what,” said Attorney General Eric Holder.  “The Department of Justice will continue to stand vigilant against corporations or individuals who threaten the integrity of our financial markets, undermine the stability of our economy, or jeopardize the well-being of our citizens.  And, when supported by the facts and the law, we will never hesitate to use every tool and authority available to us to hold accountable those who illegally take advantage of others for their own financial gain.”

“Through its guilty plea and sentence, UBS has been held to account for deliberately manipulating LIBOR, one of the cornerstone interest rates in our global financial system,” said Acting Assistant Attorney General Mythili Raman of the Criminal Division.  “The $1.5 billion global resolution against UBS – of which this guilty plea and sentence are a critical element – is just one of several actions we have taken against financial firms throughout the world that sought to illegally influence LIBOR.  As we continue our active and ongoing investigation of the manipulation of LIBOR, our prosecutors and agents will continue to tenaciously follow the evidence wherever it leads.  Neither UBS, nor the individual UBS defendants we have charged in connection with this sophisticated scheme, nor any other bank or individual, is above the law.”

According to documents filed in these cases, 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 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.

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

Beginning in September 2006, UBS Securities Japan and a senior trader employed in the Tokyo office of UBS Securities Japan orchestrated a sustained, wide-ranging and systematic scheme to move Yen LIBOR in a direction favorable to the trader’s trading positions, defrauding UBS’s counterparties and harming others with financial products referencing Yen LIBOR who were unaware of the manipulation.  Between November 2006 and August 2009, the senior trader or a colleague of the senior trader endeavored to manipulate Yen LIBOR on at least 335 of the 738 trading days in that period, and during some periods on almost a daily basis.  Because of the large size of the senior trader’s positions, even slight moves of a fraction of a percent in Yen LIBOR could generate large profits.  For example, the senior trader once estimated that a 0.01 percent movement in the final Yen LIBOR fixing on a specific date could result in a $2 million profit for UBS.

According to the charging documents, UBS Securities Japan and the senior trader employed three strategies to execute the scheme: causing UBS to make false and misleading Yen LIBOR submissions to the BBA; causing cash brokerage firms, which purported to provide market information regarding LIBOR to panel banks, to disseminate false and misleading information about short-term interest rates for Yen, which those banks could and did rely upon in formulating their own LIBOR submissions to the BBA; and communicating with interest rate derivatives traders employed at three other Yen LIBOR panel banks in an effort to cause them to make false and misleading Yen LIBOR submissions to the BBA.

In entering into the NPA with UBS AG, the Justice Department considered information from UBS and from regulatory agencies in Switzerland and Japan demonstrating that in the last two years UBS has made important and positive changes in its management, compliance and training to ensure adherence to the law.  The Department received favorable reports from the FINMA and the Japan Financial Services Authority (JFSA) describing, respectively, progress that UBS has made in its approach to compliance and enforcement and UBS Securities Japan’s effective implementation of the remedial measures the JFSA imposed based on findings relating to the attempted manipulation of Yen benchmarks.

The investigation was conducted by the FBI’s Washington Field Office.  The prosecution is being handled by Deputy Chiefs Daniel Braun and William Stellmach and Trial Attorneys Thomas B.W. Hall and Sandra L. Moser, along with former Trial Attorney Luke Marsh, of the Criminal Division’s Fraud Section.  Assistant U.S. Attorneys Eric Glover and Liam Brennan of the U.S. Attorney’s Office for the District of Connecticut have provided valuable assistance.  The Criminal Division’s Office of International Affairs also provided assistance in this matter. 

The investigation leading to these cases has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad.  The Justice Department acknowledges and expresses its deep appreciation for this assistance.  In particular, the CFTC’s Division of Enforcement referred this matter to the Department and, along with the FCA, has played a major role in the investigation.  The SEC has also played a significant role in the LIBOR series of investigations and, among other efforts, has made an invaluable contribution to the investigation relating to UBS.  The Department of Justice also wishes to acknowledge and thank FINMA, the Japanese Ministry of Justice, and the JFSA.  Various agencies and enforcement authorities from other nations also have participated in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the Department is grateful for their cooperation and assistance.

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF).  President Obama established the interagency FFETF 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.
 

A Texas leader of the Latin Kings street gang was sentenced today in Hammond, Ind., to serve 262 months in prison for racketeering conspiracy, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana.

 
Dante Reyes, aka “DK,” 41, of Alton, Texas, was sentenced by U.S. District Judge Rudy Lozano in the Northern District of Indiana. In addition to his prison term, Reyes was sentenced to serve three years of supervised release. On March 14, 2013, Reyes pleaded guilty to one count of racketeering conspiracy.

 
According to the third superseding indictment filed in this case, the Latin Kings is a nationwide gang that originated in Chicago and has branched out throughout the United States, including the state of Texas. The Latin Kings is a well-organized street gang that has well-defined leadership and is composed of regions that include multiple chapters. The third superseding indictment charges that the Latin Kings was responsible for more than 20 murders in southeast Chicago, northwest Indiana and Big Spring, Texas.

During a co-defendant’s trial, the government presented evidence of several murders committed by members of the Latin Kings. In addition, cooperating defendants testified that the Latin Kings was responsible for distributing more than 150 kilograms of cocaine and 1,000 kilograms of marijuana over the course of the racketeering conspiracy.

During his guilty plea proceeding, Reyes acknowledged that he became a member of the Latin Kings at an early age and ultimately rose to the level of South Texas Regional Inca. He admitted that he attended at least two meetings in Texas with other members of the Latin Kings leadership in order to solidify the relationship between the Latin Kings in Texas and Chicago. Reyes further admitted that on at least one occasion, he traveled to the Chicago area with other Latin Kings members to meet with local Latin Kings leadership.

 
According to court documents, Reyes distributed cocaine and marijuana to Latin Kings members in Texas. He also distributed cocaine in Michigan through the use of couriers. These couriers traveled from Texas by bus or other vehicles and passed through the Northern District of Indiana while en route.

Twenty-three Latin Kings members and associates have been indicted in this case. Including Reyes, 21 defendants have pleaded guilty, one was convicted by jury and one remains a fugitive.

This case was investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; ICE Homeland Security Investigations; the National Gang Intelligence Center; the Chicago Police Department; the Houston Police Department; the Griffith, Ind., Police Department; the Highland, Ind., Police Department; the Hammond, Ind., Police Department; and the East Chicago Police Department.

The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, and Assistant U.S. Attorney David J. Nozick of the Northern District of Indiana. Assistant U.S. Attorney Andrew Porter of the Northern District of Illinois and Assistant U.S. Attorney Jeffrey Haag of the Northern District of Texas, Lubbock Division, provided significant assistance.

The third superseding indictment is not evidence of guilt. The defendant who has not been convicted is innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

A federal court in Memphis, Tenn., permanently barred the owners of Mo’ Money Taxes, Markey Granberry and Derrick Robinson, as well as a former Mo’ Money manager, Eumora Reese, from preparing tax returns for others and owning or operating a tax return preparation business, the Justice Department announced today.  The civil injunction order, to which Granberry, Robinson and Reese agreed without admitting the allegations against them, was signed by Judge S. Thomas Anderson of the U.S. District Court for the Western District of Tennessee.

The United States brought the civil injunction suit in April, seeking to shut down Mo’ Money Taxes, a Memphis-based tax-preparation chain that at one time operated as many as 300 offices in 18 states. The government complaint, which can be viewed at www.justice.gov/tax/2013/txdv13412.htm , alleged that Mo’ Money Taxes, its owners Granberry and Robinson and store manager Reese created and maintained a business environment that encouraged the preparation of fraudulent federal income tax returns.  According to the complaint,  Mo’ Money Taxes’ managers, licensees and employees prepared fraudulent returns that caused their customers to incorrectly report their federal tax liabilities and underpay their taxes.  The complaint further alleged that defendants charged customers bogus and unconscionably high fees.

According to the complaint, Granberry and Robinson most recently used the business name Marquis Taxes and, along with Reese, also used the name Southern King Taxes.  The complaint also alleges that Granberry and Robinson received fees for each tax return prepared by these businesses through Caymau Service Bureau LLC.  The civil injunction order not only bars Granberry, Robinson and Reese from owning and operating these businesses, but also from managing, working in, controlling, licensing or franchising a tax return preparation business.

The complaint alleges that Granberry, Robinson and Reese encouraged Mo’ Money Taxes preparers to falsely claim the earned-income credit; claim improper filing status; claim bogus education credits, improperly prepare returns using paystubs rather than employer-issued W-2 forms; fabricate bogus W-2 forms; file tax returns without customers’ consent; sell false and deceptive loan products; and charge deceptive and unconscionable fees.

Return preparer fraud, claiming false income or expenses to secure larger refundable credits such as the earned-income credit, and identity theft are among the IRS’s “Dirty Dozen” Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 .

“American taxpayers need to know they can rely on their tax preparers to prepare honest, accurate returns,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division.  “The Internal Revenue Service and Justice Department are committed to strong enforcement action against tax preparers who fail to live up to that standard.”

In the past decade the Justice Department's Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters.  Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm.   For more information about choosing a tax return preparer, see the IRS website at www.irs.gov/uac/Tips-for-Choosing-a-Tax-Return-Preparer and the IRS YouTube Channel at www.youtube.com/watch?v=ujqdzMn7PX0.           

Related Materials:

United States v. Markey Granberry, et al.
Order of Permanent Injunction Against Markey Granberry, Derrick Robinson and Eumora Reese
 

The Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Southern District of Indiana announced today the return of two indictments against six individuals and three companies for offenses involving federal renewable fuel programs, allegedly creating losses to victims totaling more than $100 million. The 88 counts included in the three charging documents include allegations of conspiracy, wire fraud, false tax claims, false statements under the Clean Air Act, obstruction of justice, money laundering and securities fraud.

“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Fraud by parties claiming such incentives threatens these important public policies. The Justice Department will vigorously prosecute those seeking to line their pockets using scams like those alleged in this indictment.”

 “This morning, federal agents brought into custody individuals who allegedly operated the largest tax and securities fraud scheme in Indiana history,” said U.S. Attorney for the Southern District of Indiana Joseph H. Hogsett. “This case represents a collaborative effort on the part of law enforcement to hold fully accountable those who seek personal profit at the taxpayer’s expense.”

“The Renewable Fuel Standard Program was designed to achieve greenhouse gas emission reductions, promote energy independence and expand our nation’s renewable fuels sector,” said Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance, Environmental Protection Agency (EPA). “Today’s action supports these goals by protecting the integrity of the biofuel market. Those that cheat the system are breaking the law, and undermine our commitment to protect public health and the environment.”

“We are proud to work with our federal partners to identify and investigate groups that manipulate and utilize federal government programs to line their pockets by fraud,” said Robert A. Jones, Special Agent in Charge of the FBI Indianapolis Division. “In doing so, they deceive their customers, their shareholders, and the American public. The FBI will continue the fight against this dishonest and fraudulent behavior which harms the American people and the American economy.”

“The indictments returned today send a loud message that IRS Criminal Investigation operates year round to protect the integrity of our tax system and today is a victory for the American people,” said James C. Lee, Special Agent in Charge, IRS Criminal Investigation. “Together with the cooperative efforts of our law enforcement partners, we were able to identify and vigorously investigate the fraud involved in this scheme.”
 
 The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel. A dollar-per-gallon tax credit was available only to the first person to blend the pure biodiesel (known as B100) with petroleum diesel. After the biodiesel was blended and the tax credit claimed, the resulting product was generally known in the industry as B99, meaning that it was approximately 99 percent biodiesel and 1 percent petroleum diesel. Additionally, biodiesel producers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. These two incentives were available only once for any given volume of biodiesel. For these reasons, a gallon of B100 with RINs and an available tax credit was worth much more than a gallon of RIN-stripped B99. At times during the conspiracy, a gallon of B100 was worth up to $2.50 more than an equivalent gallon of B99.
 
 Four of the defendants—Craig Ducey, Chad Ducey, Chris Ducey and Brian Carmichael— operated E Biofuels, a Middletown, Indiana company that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. The government alleges that these defendants conspired with Joseph Furando and Evelyn Katirina Pattison—two executives with a pair of related New Jersey-based companies that operated under the names Caravan Trading Company and CIMA Green—to purchase RIN-stripped B99 from third parties, pretend that E-Biofuels had produced that fuel at its Middletown facility and fraudulently resell that fuel to customers as B100 with RINs and an available tax credit. While the E-Biofuels facility was capable of producing B100, at times during the conspiracy it was producing no fuel of its own, but instead was simply acting as a pass-through facility for fuel purchased elsewhere.
 
 The indictment alleges that beginning in July 2009 and continuing until May 2012, these defendants fraudulently sold more than 35 million gallons of RIN-stripped B99 to unwitting customers who paid an inflated price, thinking they were purchasing B100 with RINs and an available tax credit. All told, the customers were allegedly defrauded of more than $55 million as a result of these activities and the Internal Revenue Service was exposed to as much as $35 million in false claims.
 
 The government alleges that the defendants delivered the fraudulently mislabeled fuel to the victims in one of three ways. In some cases, the biodiesel was transported from fuel terminals to the E-Biofuels facility in Middletown where it was unloaded into a holding tank. A short time later, the biodiesel would be reloaded into tanker trucks and delivered to unsuspecting customers along with fraudulent paperwork that misidentified it as B100 with RINs produced by E-Biofuels. On other occasions, the truck drivers did not unload the fuel when they arrived at Middletown plant. Instead, they simply picked up paperwork falsely stating that the truck contained a load of B100 with RINs that originated at the E-Biofuels facility. The truck drivers referred to this procedure as “flipping a load.”
 
 Finally, in the most egregious instances, the truck drivers hauled RIN-stripped B99 from fuel terminals directly to customers. Because these loads never went to the E-Biofuels facility they were known as “ghost loads” or “phantom loads.” In those cases, the defendants faxed or e-mailed the false paperwork to the truck drivers along their routes between the fuel terminals and the customer locations.               
 
 In May 2010, E-Biofuels was purchased by Imperial Petroleum, a publicly traded company based in Evansville. After the acquisition, E-Biofuels accounted for more than 97% of Imperial Petroleum’s operating income. Defendant Jeffrey Wilson was the president and chief executive officer of Imperial Petroleum.
 
 The government alleges that Jeffrey Wilson and Craig Ducey knew that E-Biofuels was purchasing biodiesel from third parties instead of making its own biodiesel. They hid this fact from Imperial’s investors, shareholders and outside auditors by falsely stating that E-Biofuels produced biodiesel from chicken fat and other feedstocks. They made these and other related false statements and omissions in Imperial Petroleum’s annual and quarterly reports filed with the Securities and Exchange Commission and in written and oral communications with Imperial Petroleum’s investors and outside auditors.       
  
 If found guilty, the six individuals charged by indictment face up to 20 years in federal prison on some counts, as well as significant fines. The three companies indicted today also face significant fines and other regulatory action. The defendants were scheduled for initial appearances before a federal magistrate judge today.
 
 An additional defendant was charged today by federal information, and has petitioned the court to enter a plea of guilty and cooperate with investigators.  Brian Carmichael was charged with one count of conspiracy to defraud the United States. Carmichael has filed a petition with the court indicating his willingness to plead guilty to this charge. Carmichael faces up to five years in federal prison if convicted.

The case is being prosecuted by Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office, along with Senior Counsel Thomas Ballantine of the Environmental Crimes Section in the Department of Justice’s Environment and Natural Resources Division, and Jake Schmidt, a Special Assistant U.S. Attorney of the U.S. Attorney’s Office and Senior Attorney for the Securities and Exchange Commission.
 
 An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
 
 The collaborative investigation that led to today’s arrests was the result of work by the EPA’s Criminal Investigation Division, the Internal Revenue Service Criminal Investigation, the FBI, the Securities and Exchange Commission, as well as the U.S. Department of Agriculture and the Indiana Department of Environmental Management.

Earlier today, a federal magistrate judge in Brooklyn detained an Irish national who was arrested on Saturday and charged in a complaint for false labeling in connection with his alleged role in international rhinoceros horn smuggling in violation of the Lacey Act.  The arrest and charge is a result of “Operation Crash,” a nationwide effort led by the U.S. Fish & Wildlife Service (FWS) and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.

The Department of Justice filed a complaint in federal court in the Eastern District of New York alleging that Michael Slattery, Jr., a 25-year-old Irish national, fraudulently purchased a set of black rhinoceros horns in Texas and then travelled to New York and used a falsified document to sell the horns for $50,000. 

The charge and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environmental and Natural Resources Division.
 According to the complaint filed in on September 14, 2013, in 2010 Slattery traveled from England to Texas to acquire black rhinoceros horns.  Slattery and others then used a day laborer with a Texas driver’s license as a straw buyer to purchase two horns from an auction house in Austin.  The complaint charges that Slattery and his group then traveled to New York where they presented a fraudulent Endangered Species Bill of Sale and sold those two and two other horns to an individual for $50,000.        

According to court records and government statements made in court, Slattery is a member of The Rathkeale Rovers (also known as the “Irish Travelers”), which are tight-knit extended family groups that live a nomadic lifestyle.  The group leverages the rising price for rhinoceros horns in the black market to be used for traditional medicines and carving.  According to information made public by Europol, the Rathkeale Rovers have been involved in an epidemic of raids on museums in Europe in which rhinoceros horns have been stolen.

 Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans.  All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered.  Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population.  In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups.  Drinking from such a cup was believed to bring good health and such carvings are highly prized by collectors. As a result of this demand, rhino populations have declined by more than 90 percent since 1970.  South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.   

The charge in the complaint is merely and allegation, and the defendant is presumed innocent unless and until proven guilty.  The government’s case is being prosecuted by Assistant U.S. Attorney Julia Nestor of the Eastern District of New York and Trial Attorney Gary N. Donner of the Justice Department’s Environmental and Natural Resources Division.

Today, Attorney General Eric Holder, Health and Human Services (HHS) Secretary Kathleen Sebelius, and Federal Trade Commission (FTC) Chairwoman Edith Ramirez met at the White House to kick off a comprehensive interagency initiative to prevent, protect against, and where necessary prosecute consumer fraud and privacy violations in the Health Insurance Marketplace.  Representing key state partners in this critically important effort to protect consumers were Maryland Attorney General Douglas Gansler and Kansas Insurance Commissioner Sandy Praeger. Senior White House officials also attended the meeting.

Meeting participants reaffirmed their ongoing commitment to protect consumers from potential threats in this area.  Building on a successful infrastructure that already exists, the interagency officials highlighted the following new initiatives: 1) the dedication of the Marketplace Call Center as a resource and referral to FTC for consumer fraud concerns, with trained Call Center staff to effectively refer consumer threats and complaints; 2) connecting consumers to FTC’s Complaint Assistant through HealthCare.gov; 3) development of a system of routing complaints through the FTC’s Consumer Sentinel Network for analysis and referral as appropriate; 4) establishment of a rapid response mechanism for addressing privacy or cybersecurity threats and; 5) ramping up public education to empower consumers and assisters to know the facts and avoid scams.

“Today we are sending a clear message that we will not tolerate anyone seeking to defraud consumers in the Health Insurance Marketplace,” said Health and Human Services Secretary Sebelius.  “We have strong security safeguards in the Marketplace to protect people’s personal information against fraud and we will work with our partners to aggressively prosecute bad actors, just as we have been doing in Medicare, Medicaid and the Children’s Health Insurance Program.” 
The experienced and dedicated professionals at HHS, DOJ and FTC, together with their state and local partners, are ready to anticipate and respond to the law enforcement challenges that may arise with the launch of the Marketplace.  They will be using tried and tested methods for combatting fraud associated with other government programs, so that consumers can confidently and securely shop for affordable health insurance beginning on October 1.  

“I am proud of the proactive approach that the Justice Department is taking with our colleagues at HHS and FTC, and with the state law enforcement community, to prevent and detect consumer fraud in the Health Insurance Marketplace,” said Attorney General Eric Holder.  “Going forward, we intend to share information, work cases, and hold wrongdoers accountable as we always do.  We plan to use our tried-and-tested collaborative methods to ensure that we can identify trends and take swift action against those seeking to take advantage of consumers.”
Consumers who report that their personal information may have been compromised will be given information about steps to take to prevent or respond to identity theft. If a consumer reports suspected fraud, his or her complaint will be entered into the FTC’s Consumer Sentinel Network database, which is used by federal and state law enforcement agencies to track potential fraud activity.  Federal law enforcement officials will be able to monitor complaint activity for trends within and across all 50 States. 

"At the FTC, we know all too well how scammers invariably try to take advantage of developments in the marketplace and new government programs," said FTC Chairwoman Edith Ramirez. "We will be vigilant as always in cracking down on this type of opportunistic fraud."

Consumer fraud experts from across state and federal agencies will continue to meet on a regular basis to monitor potential fraud associated with the Marketplace and ensure the strength of preventive measures. 

“State Attorneys General have extensive experience working proactively with our Federal law enforcement partners to anticipate and respond to consumer fraud,” said Maryland Attorney General Douglas Gansler. “We look forward to continuing to partner with the Justice Department, the FTC, and HHS to educate consumers, investigate cases, identify patterns associated with different types of fraud, and hold scammers accountable.”

Steps have already been initiated to prevent and respond to individuals attempting to take advantage of the public during health care implementation.  These measures include:

• Reporting fraud mechanism: A new feature of the Marketplace Call Center (1-800-318-2596, TTY 1-855-889-4325) will now enable individuals to report fraud simply by calling the 1800 number. Call Center operators have been trained to take a fraud complaint, and refer them to FTC’s Consumer Sentinel Network.    

• Creating new pathways: HealthCare.gov offers easy access to connect consumers to FTC’s Complaint Assistant.

• Establishing a routing system for complaints through a centralized database: Routing complaints through the Sentinel Network will ensure Federal, state and local law enforcement have access to consumer complaints and can analyze and refer those complaints as appropriate. 

• Protecting personal data: Building on  the certification of the Health Insurance Marketplace’s data hub  on September 6, 2013 as in compliance with the stringent security, privacy and data flow standards developed by the National Institute of Standards and Technology - the gold standard for information and independent security controls assessment - the interagency officials have also established a rapid response mechanism that will be employed in the unlikely event of a data security breach. 

• Empowering consumers with information: Building on a proactive effort to inform consumers about potential fraud and privacy threats, the federal government is releasing new educational materials to empower consumers and assisters who are helping consumers navigate the Marketplaces.  They include online tip sheets like Protect Yourself from Fraud in the Health Insurance Marketplace and Tips for Assisters to Help Consumers Navigate the Marketplace. The materials remind consumers that there is free assistance available to navigate the Marketplace and that they should be suspicious of persons who ask for a fee before providing assistance.

In addition, the FTC and DOJ are hosting events this week in anticipation of the launch of the Marketplace: • Thursday, September 19th, the FTC, will host a roundtable in Washington, DC to discuss how to empower and protect consumers from scammers with the advent of the Health Insurance Marketplace. The roundtable will bring together experts on the health care law, federal and state consumer protection officials, representatives of legal services and community-based organizations, and consumer advocates to discuss key features of the law, state approaches to implementation, and how to help consumers avoid potential scams.

• Friday, September 20th, DOJ will host a law enforcement meeting to convene state and local officials.  This meeting is part of ongoing efforts urging state AGs to work with HHS and federal, state, and local law enforcement to mount a substantial outreach campaign to educate consumers about how to prevent scams and fraud and protect their personal information in the Marketplace.

These comprehensive preventive and detection efforts build on the extensive experience and federal, state and local intergovernmental infrastructure that has protected consumers from fraud.

• Since its creation in 1997, the HHS Senior Medicare Patrol has educated to more than 28 million Medicare beneficiaries and counseled more than 1.3 million individuals about specific concerns, one-on-one.   Coupled with other outreach efforts, Medicare’s toll-free customer service operations sent nearly 45,000 inquiries to law enforcement partners for fraud investigations in 2012 alone. These direct-from-consumer leads ultimately supported the Administration’s work to prosecute criminals, returning $6.7 billion to the Medicare Trust Fund in the last four years. 

• In the last several years, the FTC’s Bureau of Consumer Protection has put a stop to over 50 health fraud scams, government grant schemes, and mortgage relief services frauds, and has independently secured nearly $6 million in monetary relief for consumers. The Bureau conducts investigations, sues companies and people that violate the law, and works to educate consumers and businesses about their rights and responsibilities. The Bureau coordinates its work in these areas with Federal, state and local partners.

• Over the last four years, DOJ has successfully prosecuted over four thousand defendants in identity theft and aggravated identity theft cases, and convicted over 200 defendants in advance fee fraud cases, over 500 defendants in consumer fraud cases, and over 100 defendants in telemarketing fraud cases. 

For more information on CMS’s efforts to protect consumers in the Marketplace, please visit: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-Sheets/2013-Fact-Sheets-Items/2013-09-18.html

A Maine resident pleaded guilty today in federal court to engaging in a type of cyberstalking known as “sextortion,” announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire.

 
John Bryan Villegas, 23, of Kittery, Maine, pleaded guilty before U.S. Magistrate Judge Landya B. McCafferty in the District of Maine to a one-count information charging him with interstate stalking.

 
T he information charges that from July 10-16, 2012, the defendant, while in Kittery, anonymously sent multiple email messages to a New Hampshire resident identified as “Jane Doe.” In those messages, Villegas told Jane Doe that he had “x-rated” photos of her and, as proof, sent her private photos that had been stored on Jane Doe’s stolen laptop computer. Villegas directed Jane Doe to take new photographs and videos of herself engaging in various sexually explicit scenarios and directed her to email the files to him. When she refused, Villegas threatened to “dox” her, meaning that he would “leak” on the Internet the photographs and other personal information about her. Villegas further warned Jane Doe that if she did not provide him with the requested materials, he would send the photographs he already had to individuals throughout New Hampshire, as well as to her ex-husband, boyfriend and a recent former employer.

At sentencing, scheduled for Jan. 7, 2014, Villegas faces a maximum sentence of five years in prison.

The case was investigated by the U.S. Secret Service and is being prosecuted by Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire and Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section. The police departments of Kittery and Dover, N.H., and the U.S. Naval Criminal Investigative Service provided valuable assistance.

The Department of Justice today announced the awarding of 192 grants to 110 American Indian tribes, Alaska Native villages, tribal consortia and tribal designated non-profits.  The grants will provide more than $90 million to enhance law enforcement practices and sustain crime prevention and intervention efforts in nine purpose areas including public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; violence against women; juvenile justice; and tribal youth programs.  The awards are made through the department’s Coordinated Tribal Assistance Solicitation (CTAS), a single application for tribal-specific grant programs.

Associate Attorney General Tony West and Office of Justice Programs Assistant Attorney General Karol V. Mason made the announcement during a meeting of northwest tribal leaders with the Attorney General’s Advisory Committee’s Native American Issues Subcommittee (NAIS) in Celilo Village, Ore.

“These programs take a community-based and comprehensive approach to the root causes and consequences of crime, as well as target areas of possible intervention and treatment,” said Associate Attorney General West.  “The CTAS programs are critical tools to help reverse unacceptably high rates of crime in Indian country, and they are a product of the shared commitment by the Department of Justice and tribal nations to strengthen and sustain healthy communities today and for future generations.”

“The Department of Justice has a responsibility to make sure its resources are not only available but accessible to tribes in a manner that they have defined and envisioned to meet the needs of their communities,” said Assistant Attorney General Mason.  “As we have shown over the last four years, the Department of Justice takes this responsibility very seriously.”

 The department developed CTAS through its Office of Community Oriented Policing, Office of Justice Programs and Office on Violence against Women, and administered the first round of consolidated grants in September 2010.  Over the past four years, it has awarded 989 grants totaling more than $437 million.  Information about the consolidated solicitation is available at www.justice.gov/tribal/.  A fact sheet on CTAS is available at www.justice.gov/tribal/ctas2013/ctas-factsheet.pdf.

Thirty U.S. Attorneys from districts that include Indian country or one or more federally recognized tribes serve on the NAIS.  The NAIS focuses exclusively on Indian country issues, both criminal and civil, and is responsible for making policy recommendations to the Attorney General regarding public safety and legal issues.

Next month, the Justice Department will hold its annual consultation on violence against native women on Oct. 31st, 2013, in Bismarck, N.D. In addition, an Interdepartmental Tribal Justice, Safety and Wellness Session will be held in Bismarck on Oct. 29-30, 2013.   It will include an important listening session with tribal leaders to obtain their views on the Department grants, as well as valuable training and technical assistance.

Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities.  A complete list of the 2013 awards is available at www.justice.gov/tribal/docs/ctas-award-list-2013.pdf.

Michael D. Hayden Jr., 41, of Tilghman’s Island, Md., was arrested yesterday on charges of witness tampering and retaliation in connection with an investigation of felony Lacey Act violations related to the illegal harvesting of striped bass from the Chesapeake Bay.

The charges were announced by U.S. Attorney for the District of Maryland Rod J. Rosenstein; Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division; Regional Special Agent in Charge Honora Gordon of the U.S. Fish and Wildlife Service, Office of Law Enforcement; and Joseph P. Gill, Secretary of the Maryland Department of Natural Resources. 

According to the affidavit filed in support of the criminal complaint, Hayden is a commercial fisherman licensed in the state of Maryland and operates commercial fishing vessels on the Chesapeake Bay.  During an investigation of the illegal harvesting of striped bass from the Chesapeake Bay, agents of the U.S. Fish and Wildlife Service, Office of Law Enforcement and the Maryland Natural Resources Police learned that Hayden allegedly attempted to manipulate some witnesses’ testimony while trying to prevent the testimony of others.  The criminal complaint alleges that in at least one incident, Hayden threatened to retaliate against a potential witness he believed to be cooperating with investigators.  

If convicted, Hayden faces a maximum sentence of 20 years in prison on each of four counts of witness tampering and witness retaliation.  Hayden is expected to have an initial appearance in U.S. District Court in Baltimore today.

A criminal complaint is not a finding of guilt.  An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.  

U.S. Attorney Rosenstein and Acting Assistant Attorney General Dreher thanked the Maryland Department of Natural Resources Police and the United States Fish and Wildlife Service for their work in the investigation and the United States Marshals Service for executing the arrest.  The case is being jointly prosecuted by the U.S. Attorney’s Office for the District of Maryland and the Environmental Crimes Section of the United States Department of Justice.

Gurmail Singh, a resident of Richmond Hill, N.Y., pleaded guilty today in U.S. District Court in the Eastern District of New York to filing a false federal tax return, the Justice Department and Internal Revenue Service (IRS) announced.

According to the indictment, court records and admissions made by the defendant in court today, Singh used check-cashing services to cash more than $2.9 million in checks paid to his construction company, Fancy and Vicky Construction Co. Inc. in Richmond Hill, for services between 2006 and 2008.  He concealed his check-cashing activities from his tax return preparers, and this income was not included as gross income on the company's tax returns. Singh also diverted cash receipts earned by his companies for his own personal use. Singh admitted that his failure to report Fancy and Vicky’s gross receipts caused a tax loss to the IRS of between $400,000 and $1,000,000.

Singh faces a potential maximum sentence of three years in prison and a maximum fine of $250,000.  Sentencing is set for Jan. 6, 2014.

The case was investigated by IRS - Criminal Investigation and is being prosecuted by Trial Attorneys Mark Kotila and Jeffrey Bender of the Justice Department's Tax Division.

Gustave Drivas, M.D., 58, of Staten Island, N.Y., was sentenced to serve 151 months in prison for his role as a “no show” doctor in a $77 million Medicare fraud scheme.  The State of New York revoked Dr. Drivas’s medical license earlier this year.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

Drivas was convicted by a jury on April 8, 2013, of health care fraud conspiracy and health care fraud after a seven-week trial.  He was acquitted of kickback conspiracy.  Including Drivas, 13 individuals have been convicted of participating in the massive fraud scheme, either through guilty pleas or trial convictions.  In addition to the prison term, U.S. District Judge Nina Gershon of the Eastern District of New York sentenced Drivas to three years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered him to forfeit $511,000 and ordered him to pay restitution in the amount of $50.9 million.

The evidence at trial showed that Drivas knowingly authorized his co-conspirators at a Brooklyn medical clinic to use his Medicare billing number to charge Medicare for more than $20 million in medical procedures and services that were never performed.  In return, he received more than $500,000 for his role in the scheme.  According to court documents, from 2005 to 2010, Drivas was the medical director of or a rendering physician at a clinic in Brooklyn that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (collectively “Bay Medical clinic”).  The evidence established that Drivas was a “no show” doctor, who almost never visited the clinic except to pick up his check.  The evidence also showed that the clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary and never provided.

The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries.  The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010.  This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian.  The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.

To generate the large amounts of cash needed to pay the patients, Drivas’s business partners and co-conspirators recruited a network of external money launderers who cashed checks for the clinic.  Clinic owners wrote clinic checks payable to various shell companies controlled by the money launderers.  These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds.  The money launderers cashed these checks and provided the cash back to the clinic.  Clinic employees used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  The case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys William C. Campos and Shannon C. Jones of the Eastern District of New York. 

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.

Jose Maria Corredor-Ibague, aka “Boyaco,” a high-level drug trafficker and supporter of the Fuerzas Armadas Revolucionarias de Colombia (FARC), has been sentenced in Washington, D.C., to serve 194 months in prison.  Corredor-Ibague was the first person in the nation to be indicted under the federal narco-terrorism statute, which became law in March 2006. 

The sentencing was announced today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Acting Assistant Attorney General John P. Carlin of the Justice Department’s National Security Division; U.S. Attorney Ronald C. Machen Jr. of the District of Columbia; Michele M. Leonhart, Administrator of the U.S. Drug Enforcement Administration; FBI Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Miami Special Agent in Charge Alysa D. Erichs; and Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service Southeast Field Office.

“Jose Maria Corredor-Ibague was an international drug lord who moved cocaine around the world through a close, criminal partnership with the FARC,” said Acting Assistant Attorney General Raman.  “This narco-terrorism case was the first of its kind.  As this 194-month sentence demonstrates, the Justice Department is firmly committed to working with its counterparts to hold accountable anyone who uses narco-trafficking to support, assist and enable terrorism.”

“This defendant led a drug transportation network that distributed thousands of kilograms of cocaine to destinations in the United States and other countries, often acting in concert with the FARC terrorist organization,” said U.S. Attorney Machen. “He was a leader of a broader conspiracy that engaged in narco-terrorism, and his apprehension, prosecution and 194-month prison sentence show that law enforcement is committed to combatting drug traffickers and those who provide support to terrorist groups.”

Corredor-Ibague’s sentence was unsealed today in U.S. District Court in the District of Columbia.  On Monday, Sept. 9, 2013, Corredor-Ibague, 46, a Colombian National, was sentenced by U.S. District Judge Gladys Kessler.  In addition to his prison term, Corredor-Ibague was sentenced to serve three years of supervised release.

Corredor-Ibague was arrested in Colombia on Oct. 15, 2006.  He was extradited to the United States in October 2008 and subsequently pleaded guilty to one count of conspiracy to distribute cocaine while knowing and intending that the cocaine would be imported into the United States, one count of narco-terrorism and one count of conspiracy to provide material support or resources to a foreign terrorist organization.

According to court documents, Corredor-Ibague was the leader of an extensive drug manufacturing and transportation network that processed and manufactured cocaine in Colombian laboratories and used airplanes to fly multi-hundred kilogram loads of cocaine from clandestine airstrips in Colombia to various countries, including Brazil, Guyana, Mexico, Paraguay, Suriname and Venezuela.  From these countries, which were often used as transshipment points, the cocaine was sent to destinations in the United States and Europe.  Corredor-Ibague controlled the clandestine airstrips used by his organization and also owned and operated the laboratories used to manufacture and package the cocaine.  Corredor-Ibague and his associates also transported cocaine owned by other drug trafficking organizations, including cocaine belonging to the FARC. 

Corredor-Ibague’s drug trafficking activities were conducted with the protection of the FARC.  In particular, the FARC’s “First Front” combat group profited from the activities of Corredor-Ibague and his associates.  Corredor-Ibague paid taxes to the FARC using U.S. currency and weapons.  Additionally, Corredor-Ibague provided material support, assistance and resources to the FARC, including assault-type weapons, machine guns, ammunition, uniforms and sophisticated communications equipment.  Corredor-Ibague conducted these activities with knowledge that the FARC engaged in terrorist activity and terrorism in Colombia and elsewhere. 

“This narco-terrorist illegally exported sophisticated US military weapons and communications equipment to support criminal activities by a designated terrorist organization,” said DCIS Special Agent in Charge Khin.  “Joint investigations such as these highlight the success of multi-agency partnerships in protecting America’s national security interests in this region.”

This case was investigated by the DEA, the ICE-HSI Miami Field Office, the Defense Criminal Investigative Service (DCIS) Southeast Field Office and the FBI Miami Field Office.  Additionally, the U.S. government expresses its grateful appreciation to the government of Colombia for their assistance and support during the investigation, arrest and extradition.

The case was jointly prosecuted by Trial Attorneys Robert Raymond and Jamie Perry of the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS); Trial Attorney Glenn Alexander, formerly of NDDS and now with the Criminal Division’s Computer Crime and Intellectual Property Section; Assistant U.S. Attorney Anthony Asuncion of the District of Columbia; and Trial Attorney David Cora of the National Security Division’s Counterterrorism Section.  The Criminal Division’s Office of International Affairs also provided significant assistance in the provisional arrest and extradition of Corredor-Ibague.

A former investor in the Alabama real estate foreclosure auctions industry pleaded guilty today to one count of making false statements, the Department of Justice announced.

Ali Forouzan, of Mobile, Ala., pleaded guilty in the U.S. District Court for the Southern District of Alabama in Mobile to making materially false and fictitious statements to a Special Agent of the FBI and a Department of Justice Antitrust Division prosecutor.  The false statements were in regard to his knowledge of, and participation in, bid rigging and other fraudulent schemes in the Alabama real estate foreclosure auction industry.

According to the charge, in February 2012, Forouzan was interviewed, with counsel present, about the fraudulent schemes under investigation.  Forouzan was aware of the nature of the investigation and knew that it was material for the FBI and the Antitrust Division to obtain his full knowledge of such unlawful acts as bid-rigging agreements and other fraudulent schemes relating to real estate foreclosure auctions; unlawful payoffs that he and others made and received in furtherance of such schemes; and secret, second auctions in which Forouzan and others participated.  However, Forouzan willfully and knowingly provided false and fictitious information during his interview.

“The Antitrust Division views attempts to compromise the integrity of its investigations as a serious offense,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Today’s filing should send a clear signal that the Antitrust Division is committed to prosecuting vigorously attempts to cover-up illegal, anticompetitive conduct.”

“The success of this investigation exemplifies the FBI’s continued commitment to fight fraud in the real estate industry and serves to deter those who wish to illegally profit from fraud schemes,” said Stephen E. Richardson, FBI Special Agent in Charge of the Mobile Field Office.  Special Agent in Charge Richardson praised the perseverance of agents and prosecutors in this complex investigation.

Including Forouzan, to date, nine individuals and two companies have pleaded guilty as a result of the department’s ongoing investigation into the Alabama real estate foreclosure auction industry.

Forouzan faces a maximum penalty of five years in prison, three years of supervised release and a $250,000 fine.

The charge against the defendant arose from an ongoing investigation into bid rigging and other fraudulent schemes in the Alabama real estate foreclosure auctions industry.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should call 404-331-7116 or visit www.justice.gov/atr/contact/newcase.htm

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

The Macalan Group Inc., formerly known as NEK Advanced Securities Inc. (NEK), a security contractor headquartered in Colorado Springs, Colo., has agreed to resolve allegations that it submitted false claims in connection with a contract with the Joint Improvised Explosive Device Defeat Organization (JIEDDO), the Justice Department announced today.  NEK’s contract with JIEDDO required it to develop and deploy teams of specialized personnel to Iraq and Afghanistan to combat improvised explosive devices.

“We are committed to pursuing contractors who fail to accurately bill the government,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “The Justice Department will continue to ensure that those who do business with the government do so honestly and fairly and uphold the integrity of our public contracting process.”

“No government contract is more important than one that supports the security efforts of our nation overseas,” said John Walsh, U. S. Attorney for the District of Colorado.  “When a contractor fails to bill by the contract rules set up to protect American taxpayers, our office will diligently and aggressively seek to recover any losses, as this case demonstrates.”

 
The government alleged that NEK submitted false invoices for payment in connection with this contract that claimed excessive or unallowable costs.  The most significant of these costs related to lease fees for equipment used under the contract.  The government also alleged that NEK was prohibited from charging lease fees that exceeded the price NEK paid to purchase the equipment.  To resolve these allegations, NEK will pay the government $2.08 million and also will relinquish an outstanding invoice for $744,969 and turn over numerous weapons and accessories acquired under the contract. 

This settlement was the result of a coordinated effort by the Department of Justice’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the District of Colorado and the Defense Contract Management Agency.  The claims resolved by this settlement are allegations only, and there has been no determination of liability.

The Macalan Group Inc., formerly known as NEK Advanced Securities Inc. (NEK), a security contractor headquartered in Colorado Springs, Colo., has agreed to resolve allegations that it submitted false claims in connection with a contract with the Joint Improvised Explosive Device Defeat Organization (JIEDDO), the Justice Department announced today.  NEK’s contract with JIEDDO required it to develop and deploy teams of specialized personnel to Iraq and Afghanistan to combat improvised explosive devices.

“We are committed to pursuing contractors who fail to accurately bill the government,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “The Justice Department will continue to ensure that those who do business with the government do so honestly and fairly and uphold the integrity of our public contracting process.”

“No government contract is more important than one that supports the security efforts of our nation overseas,” said John Walsh, U. S. Attorney for the District of Colorado.  “When a contractor fails to bill by the contract rules set up to protect American taxpayers, our office will diligently and aggressively seek to recover any losses, as this case demonstrates.”

  The government alleged that NEK submitted false invoices for payment in connection with this contract that claimed excessive or unallowable costs.  The most significant of these costs related to lease fees for equipment used under the contract.  The government also alleged that NEK was prohibited from charging lease fees that exceeded the price NEK paid to purchase the equipment.  To resolve these allegations, NEK will pay the government $2.08 million and also will relinquish an outstanding invoice for $744,969 and turn over numerous weapons and accessories acquired under the contract. 

This settlement was the result of a coordinated effort by the Department of Justice’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the District of Colorado and the Defense Contract Management Agency.  The claims resolved by this settlement are allegations only, and there has been no determination of liability.

The Attorney General issued the following statement today in the wake of the tragedy at the Washington Navy Yard:

 “The thoughts and prayers of everyone at the Department of Justice are with the victims of this heinous attack, and their families. We also extend our sincerest gratitude to the local and federal law enforcement agents in our nation's capital who bravely responded to the scene and prevented this tragedy from claiming even more lives.

“From my time as U.S. Attorney for the District of Columbia, I understand the importance of seamless cooperation at every level of government in investigations like this one. The full resources of the Department of Justice will continue to be made available to support our law enforcement partners as our nation responds to this latest mass shooting.”

An indictment was unsealed today in Montgomery, Ala., charging Nakia Jackson with conspiracy to file false tax returns, theft of public funds and aggravated identity theft, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.  The indictment was unsealed following Jackson’s arrest.

 
According to the indictment, between January 2009 and March 2011, Jackson conspired with several individuals to file false tax returns using stolen identities, some of which Jackson obtained from a state employee.  He used the stolen identities to file false tax returns and directed the tax refunds to several bank accounts.  The bank accounts were opened by individuals Jackson recruited to receive the false refunds and directed them to withdraw the false refund money.  Jackson also recruited a bank teller to aide in the scheme.   

 
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Jackson faces a maximum potential sentence of 10 years in prison for the charge of conspiracy to defraud the United States and for each count of theft of government money count, and a mandatory two-year sentence for the aggravated identity theft counts.  He is also subject to forfeiture, fines and mandatory restitution if convicted.

 
This case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Charles M. Edgar Jr. and Michael Boteler of the Justice Department’s Tax Division are prosecuting the case.

The Justice Department and the Internal Revenue Service (IRS) announced that yesterday Leslie Louise Brewster of Durham, N.C. was sentenced to serve 70 months in federal prison for crimes related to preparing false tax returns and identity fraud.  She was also ordered to pay restitution to the IRS of $92,910.  Brewster was sentenced by Chief U.S. District Judge for the Middle District of North Carolina William Osteen Jr., in Greensboro, N.C. 

On Feb. 20, 2013, Brewster pleaded guilty to three felonies relating to her preparation of false tax returns: one count of aiding and assisting the preparation of a false tax return; one count of wire fraud; and one count of aggravated identity theft.

According to court documents, Brewster was the manager of the Burlington, N.C. branch of Nothing But Taxes, a tax return preparation franchise with locations throughout North Carolina. Brewster falsified federal income tax returns for hundreds of Nothing But Taxes clients in order to obtain larger tax refunds for the clients than they were actually entitled to receive.  The returns Brewster prepared for clients reported, among other items, false dependents, fictitious businesses and bogus education credits.

Brewster also purchased personal identifying information, including names and Social Security numbers, from members of the community.  Brewster used this personal identifying information to claim false dependents on tax returns she prepared for clients, and provided some of the identities she purchased to other return preparers at Nothing But Taxes’ Burlington location for their use in a similar fashion.  Brewster typically charged Nothing But Taxes clients a cash fee, above Nothing But Taxes’ normal flat fee for preparation of a return, to prepare a return containing false dependent information.

Recently, two defendants in related cases were also sentenced to prison for tax crimes arising out of the Nothing But Taxes scheme.  Saichelle McNeill, a return preparer at the Greensboro branch of Nothing But Taxes, was sentenced to serve 27 months in prison on Aug. 20, 2013.  McNeill previously pleaded guilty to wire fraud, aggravated identity theft and aiding and assisting the preparation of a false tax return.  Tiffany Rogers, a return preparer at the Burlington branch of Nothing But Taxes, was sentenced to serve 48 months incarceration on Aug. 14, 2013.  Rogers previously pleaded guilty to wire fraud, aggravated identity theft, willfully filing a false personal income tax return and aiding and assisting the preparation of a false tax return.

Two other Nothing But Taxes employees, Nikki Brewster and Dawn Williams, are currently awaiting sentencing in the U.S. District Court for the Middle District of North Carolina.  Each of them pleaded guilty to wire fraud, aggravated identity theft and aiding and assisting the preparation of false tax returns.  Court documents associated with their respective guilty pleas allege that Nikki Brewster was the manager of a Nothing But Taxes branch in Durham, N.C., while Dawn Williams was a return preparer at the Burlington branch.

Court documents in the cases of Nikki Brewster, Dawn Williams, Tiffany Rogers, and Saichelle McNeill stated that those defendants, like Leslie Brewster, also prepared false tax returns for Nothing But Taxes clients, and committed identity theft by claiming false dependents on clients’ tax returns. 

“The Justice Department will investigate and prosecute fraudulent tax return preparers and those who steal identities to use in their tax fraud, whether the crime is committed by a single thief or a ring of thieves,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division.  “The prison sentence handed down today demonstrates that such invasions of personal privacy and theft of public monies will not be tolerated.”

Ripley Rand, U.S. Attorney for the Middle District of North Carolina, said, “We thank the Criminal Investigative Division of the IRS for their hard work in dismantling this tax fraud syndicate.  We will continue to hold those accountable who attempt to cheat the government and place the burden of their fraud on lawful taxpayers.”

This case and the related Nothing But Taxes cases are being investigated by special agents of the IRS- Criminal Investigation Division, and are being prosecuted by Assistant U.S. Attorney Frank Chut and Trial Attorney Jonathan Marx of the Justice Department’s Tax Division.

The Justice Department filed a lawsuit yesterday against the owners, builders and designers of an eight unit apartment complex at 175 and 195 Silsbee Avenue in Helena, Mont. for violations of the Fair Housing Act.  The lawsuit alleges that the defendants violated the law when they designed and constructed the complex with barriers that make it inaccessible to persons with disabilities.

“Since 1991, the Fair Housing Act has required that when new multifamily housing is built, it must be accessible to persons with disabilities,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.  “When apartment complexes are built with steps and other barriers, those with disabilities are denied that equal housing opportunity.”

The suit, filed in U.S. District Court in Helena, alleges that various barriers at the Silsbee Avenue property deny persons with disabilities equal access to four ground floor units and the associated public and common use areas.  Such barriers include inaccessible building entrances; no accessible parking; insufficient accessible routes into and through the units; light switches, electrical outlets, thermostats and other environmental controls inside the units in inaccessible locations; and kitchens that are inaccessible to persons in wheelchairs.

“Congress has recognized that it is important that individuals with disabilities have equal access to multiple family housing.  This case serves as a reminder that persons with disabilities, including the elderly, veterans, and those with a disability from birth or from an accident, should enjoy as much as possible the same access to multiple family housing as persons without such disabilities” said Michael Cotter, U.S. Attorney for the District of Montana. 

The lawsuit arises out of a complaint filed with the Department of Housing and Urban Development (HUD) by the Montana Fair Housing Council Inc. (MFH), a private nonprofit corporation whose mission it is to ensure compliance with fair housing laws for all persons in Montana.  MFH inspected the Silsbee Avenue property and observed accessibility barriers there.  After conducting an investigation, HUD issued a charge of discrimination and referred the case to the Justice Department.

“The Fair Housing Act's modest design and construction requirements allow people with disabilities to live independently and to fully use and enjoy their homes,” said Bryan Greene, HUD's Acting Assistant Secretary for Fair Housing and Equal Opportunity.  “These requirements have been law for more than 20 years.  HUD is committed to enforcing the nation’s fair housing laws and working to create equal housing opportunities for people with disabilities.”

Named in the suit are the owners and builders of the property, Gabriel and Sommer Nistler and Nistler Electric LLC, and the designer of the property, Derek Brown, and his firm, Derek Brown Consulting Inc.  The suit seeks a court order requiring the defendants to retrofit the Silsbee Avenue property to bring it into compliance with the Fair Housing Act, as well as monetary damages for MFH and for persons harmed by the lack of accessibility at the complex.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status and disability.  Among other things, the Act requires all multifamily housing constructed after March 12, 1991 to have basic accessibility features, including accessible routes without steps to all ground floor units.  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, email the Justice Department at fairhousing@usdoj.gov , or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.

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

Anthony K. Mastrogiovanni, 30, of Crofton, Md., was sentenced today to serve 25 years in prison for sexually exploiting more than 30 male juveniles – ranging from 9 to 16 years of age – in Maryland and Louisiana to produce child pornography.

The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the District of Maryland Rod J. Rosenstein and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service’s Washington Division.

Mastrogiovanni was sentenced today by U.S. District Judge J. Frederick Motz in the District of Maryland.  In additional to his prison term, Mastrogiovanni was sentenced to serve lifetime supervised release.
 
On May 29, 2013, Mastrogiovanni pleaded guilty to one count of the sexual exploitation of minors to produce child pornography. 

According to court documents and proceedings, between 2006 and 2012, Mastrogiovanni, a U.S. Navy reservist, met and befriended his victims through his involvement in civic organizations or his military affiliation.  Mastrogiovanni captured sexually explicit video of the victims on cameras hidden in his residences in Louisiana and Maryland.

Mastrogiovanni has been in federal custody since he was arrested by inspectors of the U.S. Postal Inspection Service in Las Vegas on July 19, 2012.  A search of his Las Vegas hotel room recovered external hard drives containing over 30,000 images of child pornography, including video of his juvenile victims.  That same day, federal agents searched Mastrogiovanni’s apartment in Crofton where they discovered a hidden video camera and video transmitting equipment as well as digital media containing additional child pornography.

As part of his plea agreement, Mastrogiovanni will be required to register as a sex offender in the place where he resides, where he is an employee and where he is a student, under the Sex Offender Registration and Notification Act.

The investigation was conducted by the U.S. Postal Inspection Service, with the assistance of the Air Force Office of Special Investigations, Naval Criminal Investigative Service and FBI’s Maryland Child Exploitation Task Force.  The case was prosecuted by Trial Attorney Keith A. Becker of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney P. Michael Cunningham of the District of Maryland.

This case 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 U.S. Attorney’s Offices and 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 information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Radiation oncology providers in Pensacola, Fla., will pay $3.5 million to the government and the state of Florida to resolve allegations that they billed Medicare, Medicaid and TRICARE – the health care program for uniformed service members, retirees and their families worldwide – for radiation oncology services that were not eligible for payment, the Justice Department announced today. The defendants include Gulf Region Radiation Oncology Centers Inc. (GRROC), Gulf Region Radiation Oncology MSO LLC, Sacred Heart Health System Inc., West Florida Medical Center Clinic P.A., Emerald Coast Radiation Oncology Center LLC (ECROC), Dr. Gerald Lowrey and Dr. Rod Krentel.

 
The government alleged that between 2007 and 2011, the defendants regularly billed for radiation oncology services that were not supervised by a physician, as required by Medicare, Medicaid and TRICARE, and that, in fact, these services were often performed while the defendant doctors were on vacation or were working at another radiation oncology clinic. The government also alleged that the defendants billed for other treatment services even when patients’ medical records provided no evidence that the services were rendered. The defendants also allegedly billed twice for the same services and misrepresented the level of a service provided to increase their reimbursement from the federal health care programs.

“It is critical that federal health care beneficiaries receive care that is properly supervised,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “We will continue to pursue companies and individuals that seek to boost their profits at the expense of taxpayers.”

 
Since December 2007, Sacred Heart Health System Inc. and West Florida Medical Center Clinic P.A. have been the sole shareholders of Gulf Region Radiation Oncology MSO LLC and GRROC. GRROC provides radiation oncology services at two locations in Pensacola, Fla. Sacred Heart was also a shareholder in ECROC, a radiation oncology center located in Destin, Fla., approximately 60 miles from Pensacola. Beginning in December 2007, Lowrey and Krentel, both radiation oncologists, began providing physician services at the GRROC clinics, and in June 2008, they began providing services at ECROC.

 
“Submitting false claims for medical services raises the cost of health care for all of us as patients and taxpayers,” said Pamela C. Marsh, U.S. Attorney for the Northern District of Florida. “Patients, employees and others who suspect billing fraud on the part of health care providers should not hesitate to report such fraud to federal authorities. Health care providers – both corporations and individuals – must be held accountable when they submit false information.”

The allegations resolved by today’s settlement were first raised in a lawsuit filed against the defendants under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. As part of the settlement, the whistleblower, Richard Koch, who previously worked at GRROC, will receive approximately $609,796 from the federal share of the settlement amount.

In addition to the $3.5 million payment, defendants GRROC, Lowrey and Krentel entered into Integrity Agreements with the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) intended to deter wrongful conduct in the future. The agreements require enhanced accountability and monitoring activities to be conducted by both internal and independent external reviewers.

“Patient care supervision is critical for ensuring that Medicare beneficiaries receive needed, top-quality care,” said Christopher B. Dennis, Special Agent in Charge, HHS-OIG, Office of Investigations, Miami Region. “Our increased investigative efforts in the Florida panhandle show that we will protect taxpayer-funded government health programs regardless of where perpetrators might be located.”

Assistant Attorney General Delery thanked the Department of Health and Human Services’ Office of Inspector General; TRICARE Management Activity; the U.S. Attorney’s Office for the Northern District of Florida and the Justice Department’s Civil Division, Commercial Litigation Branch for the collaboration that resulted in the settlement.

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 $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.

 
The case is captioned United States ex rel. Koch v. Gulf Region Radiation Oncology Centers Inc., et al., No. 3:12-cv-00504 (N.D. Fla.). The claims settled by this agreement are allegations only, and there has been no determination of liability.

Muhammad Shahab, the mastermind of an almost $11 million Medicare fraud scheme in Detroit, was sentenced today to 50 months in prison.

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

Shahab, 53, was sentenced by U.S. District Judge Denise Page Hood in the Eastern District of Michigan.  In addition to his prison term, Shahab was sentenced to three years of supervised release and was ordered to pay more than $10.8 million in restitution, jointly and severally with his co-defendants. 
 
Shahab pleaded guilty to one count of health care fraud in February 2010.  According to information contained in plea documents, Shahab helped finance and establish two Detroit-area home health agencies, Patient Choice Home Healthcare Inc. (Patient Choice) and All American Home Care Inc. (All American).  Shahab admitted that while operating or being associated with both home health agencies, he and his co-conspirators billed Medicare for home health visits that never occurred.  
     
Shahab admitted that he and his co-conspirators recruited and paid cash kickbacks and other inducements to Medicare beneficiaries in exchange for the beneficiaries’ Medicare numbers and signatures on documents falsely indicating that they had visited Patient Choice and All American for the purpose of receiving physical or occupational therapy.  Shahab admitted that a large number of the beneficiaries were neither homebound nor in need of any physical therapy services.
     
Shahab also admitted to securing physician referrals for medically unnecessary home health services through the payment of kickbacks to physicians or individuals associated with physicians.  Shahab employed several physical therapists and physical therapy assistants to sign medical documentation needed to begin billing for home health care services, including initial payments and payments for each visit to a Medicare beneficiary.  Shahab acknowledged that he knew the physical therapists and physical therapy assistants were not actually conducting a large majority of the visits or treating a large majority of the patients, and confessed to billing and receiving payment from Medicare for services not rendered or medically unnecessary services.  
     
Between approximately August 2007 and October 2009, Shahab and his co-conspirators at Patient Choice and All American submitted approximately $10.8 million in claims to the Medicare program for physical and occupational therapy services that were never rendered or were medically unnecessary. 
 
This case was investigated by the FBI, HHS-OIG and the Internal Revenue Service and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  This case was prosecuted by Deputy Chief Gejaa Gobena, Assistant Chief Catherine Dick and Trial Attorney Niall O’Donnell of the Criminal Division’s Fraud Section. 

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

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

The Justice Department and Internal Revenue Service (IRS) announced that Richard L. Furnelli, formerly of Holyoke and South Hadley, Mass., was indicted today in Springfield, Mass.  Furnelli is charged in a nine-count indictment with one count of obstructing the internal revenue laws, four counts of tax evasion and four counts of failing to file his individual income tax returns.

The indictment alleges that from 1994 to 2009, Furnelli obstructed the IRS’s ability to identify his income and compute the income taxes due and owing by using nominee owners to disguise his ownership interests in a network of businesses and assets, including entities operating an adult entertainment venue called the Gold Club. 
 
The indictment also alleges Furnelli earned over $2 million in total income from 2006 to 2009 and evaded his individual income taxes for that time period by, among other things, directing the payment of his income to the nominee entity, RLF Ventures LLC, utilizing a bank account in the name of a nominee in order to deposit his income and pay his personal expenses, as well as using cash extensively. The indictment further alleges that Furnelli failed to file his individual income tax returns from 2006 to 2009.
 
Furnelli faces a maximum punishment of three years in prison for the charge of obstructing the internal revenue laws; five years for each count of evading his individual income taxes; and one year for each count of failing to file his individual income tax returns. He faces a maximum fine of $100,000 on each count of failing to file his income tax returns and $250,000 for each of the other counts.  An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

The case was investigated by special agents of the IRS - Criminal Investigation. Tax Division Trial Attorneys Thomas Voracek and Mark McDonald are prosecuting the case.

A former mayor of South Pittsburg, Tenn., and a co-conspirator pleaded guilty today in Chattanooga, Tenn., to conducting an illegal gambling business, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Special Agent in Charge Kenneth Moore of the FBI’s Knoxville, Tenn., Field Office. 

Former South Pittsburg Mayor James Michael Killian, 56, and Robert Barry Cole, 53, both of South Pittsburg, pleaded guilty today before U.S. District Judge Curtis L. Collier in the Eastern District of Tennessee to criminal informations charging them each with one count of conducting an illegal gambling business. 

According to court documents, Killian was mayor of South Pittsburg from 2005 until 2012.  During that time, Killian conducted a gambling operation that involved video gambling machines located at a convenience store he owned in South Pittsburg.  Killian also managed an “outlaw” lottery, in which bettors placed illegal bets on legal state lotteries.

In addition, Killian ran an illegal sports betting ring in partnership with Cole.  Cole received sports bets, collected wagers and paid successful bettors their winnings, and Killian and Cole split the proceeds of the operation.
 
At sentencing, scheduled for Jan. 9, 2013, Killian and Cole both face up to five years in prison and a $250,000 fine.  Killian is subject to criminal forfeiture of $38,475, four computers and 12 video gambling machines.  Cole is subject to criminal forfeiture of $19,020, a ring appraised at $17,500 and two computers. 

This case is being prosecuted by Trial Attorneys Mark Angehr, Barak Cohen and Peter Sprung of the Criminal Division’s Public Integrity Section and is being investigated by the FBI.

A former executive of Ryan International Airlines, a charter airline company located in Rockford, Ill., was sentenced today to serve 87 months in prison and to pay restitution for participating in kickback schemes to defraud Ryan, the Department of Justice announced.

Wayne E. Kepple, the former vice president of ground operations for Ryan, was sentenced to serve 87 months in prison and to pay $529,998 in restitution.  On Nov. 4, 2011, Kepple pleaded guilty in U.S. District Court in West Palm Beach, Fla., to three counts of conspiracy to commit wire fraud and honest services fraud and three counts of wire fraud.  The charges against Kepple stem from a kickback scheme involving Robert A. Riddell, the former owner and operator of an airline security and ground service company, as well as separate kickback schemes involving David A. Chaisson, the former owner and operator of an Indiana flight management services company, James E. Murphy, the former owner and operator of a Florida aviation fuel supply company, and others. 

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

 
“Today’s sentence should serve as a stiff deterrent to executives who might be tempted to solicit a kickback from their supplies in exchange for their honest services,” said Bill Baer, Assistant Attorney General in charge of the Antitrust Division. “The Antitrust Division is committed to ensuring that contracts are won based on competition and not collusion.”

According to court documents, Kepple was in charge of contracting with providers of goods and services on behalf of Ryan and approving the invoices submitted by the providers to Ryan for payment. From October 2005 through at least August 2009, Kepple participated in three separate conspiracies in which he received kickback payments of more than $520,000 from Riddell, Murphy, Chaisson and others in exchange for Kepple awarding them Ryan airline services and fuel contracts.  According to court documents, the payments from Chaisson and Riddell included the proceeds of fabricated invoices submitted by their companies to Ryan.

As a result of the ongoing investigation, four individuals, including Kepple, have pleaded guilty and been sentenced to prison.  On Oct. 28, 2011, Murphy was sentenced to serve 23 months in prison and to pay $42,500 in restitution and Chaisson was sentenced to serve 16 months in prison and to pay $50,742 in restitution.  On Jan. 27, 2012, Riddell was sentenced to serve 24 months in prison and to pay $131,540 in restitution. Kepple’s 87-month sentence reflects his central role in multiple kickback schemes.

On Aug. 13, 2013, a fifth individual, Sean E. Wagner, and his company, Aviation Fuel International Inc. (AFI), a Florida-based airline fuel supply company, were indicted for participating in a conspiracy to defraud Ryan by making kickback payments to Kepple in exchange for awarding business to AFI.  That case is ongoing.

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

SACRAMENTO, California — Tamara Teresa Tikal, de 43 años de edad, de Brentwood en el Contado de Contra Costa y Ray Jan Kornfeld, de 57 años de edad, de Las Vegas, fueron arrestados hoy por su participación en una estafa que ha defraudado a propietarios de viviendas por todo California y en otros lugares, anunciaron el Abogado de los Estados Unidos, Benjamin B. Wagner, y el Abogado Genral de California, Kamala D. Harris.

El miércoles, un gran jurado federal emitió un pliego acusatorio contra Alan David Tikal, de 45 años de edad, para añadir cargos contra él y acusar a su esposa, Tamara Tikal y Kornfeld, quienes alegadamente continuaron la estafa mientras él estaba en arrestado esperando por un juicio. El pliego acusatorio fue abierto hoy después de los arrestos.

Conforme a los documentos del tribunal, a principios de enero de 2010 Alan Tikal operó un esquema de estafa a gran escala de rescate de hipotecas al ofrecer eliminar las hipotecas de los dueños de propiedades y reemplazarlas con una deuda nueva con su compañía, KATN Trust. Él afirmaba que el préstamo nuevo sólo sería por el 25% del principal original. Las víctimas pagaron miles de dólares en cuotas por adelantado y luego le hicieron pagos regulares a él por sus nuevos préstamos. Tikal y sus subordinados les ordenaron a las víctimas no pagar sus hipotecas originales y que hicieran caso omiso de toda la correspondencia de los prestamistas originales. Esto tuvo como resultado que muchas de las víctimas perdieran sus casas mediante ejecución hipotecaria. Alan Tikal fue arrestado el 28 de septiembre de 2012 y acusado mediante pliego acusatorio por cargos de fraude de correo.

Luego de su arresto, las autoridades federales del orden público continuaron investigando el caso. En noviembre de 2012, la policía se enteró de que el esquema continuaba y registraron la oficina de KATN en Las Vegas, incautando múltiples computadoras y miles de documentos. Màs tarde este año, la policía se enteró que a pesar de estos esfuerzos, el esquema continuó con las víctimas propietarios de vivienda que siguieron haciendo pagos a la compañía de los acusados. Conforme al pliego acusatorio anterior, Tamara Tikal y Kornfeld habían tenido una función central en continuar operando el esquema. Un elemento significativo del esquema que continuó fue un caso de bancarrota en el Distrito de Nevada, presentado a nombre de Alan Tikal. Tikal ha nombrado la propiedad de muchos de sus clientes víctimas como su propiedad personal, evitando así que las instituciones financieras que tenían intereses en esas propiedades pudieran ejecutar las hipotecas. En total, el esquema de Tikal victimizó a màs de mil propietarios de viviendas, quienes habían pagado màs de $3.4 millones. De los propietarios de vivienda identificados, aproximadamente el 95 por ciento reside en California y por lo menos 185 residían dentro del Distrito del Este de California.

El Fiscal de los EE.UU., Wagner, dijo: “Procesar los casos de fraude hipotecario continúa siendo una de las prioridades màs importantes de esta oficina. Los que victimizan a los propietarios de viviendas cuando màs vulnerables estàn, cuando tienen el temor de que van a perder sus casas, son los estafadores hipotecarios màs deplorables. Continuaremos procesando sin descansar a los que participen en ese tipo de estafa.”

“A través de su alegado esquema fraudulento de alivio hipotecario, Tikal, su esposa y su co-conspirador Kornfeld se metieron al bolsillo màs de $3.4 millones en cuotas iniciales y pagos de  ‘préstamo’ que hicieron los propietarios de vivienda que estaban teniendo dificultades para mantener un techo donde vivir”, dijo Christy Romero, Inspectora General Especial para TARP (SIGTARP). La petulancia de su alegada estafa que engañó a màs de 1,000 víctimas quedó demostrada por el mismo nombre de la entidad comercial, KATN Trust, que supuestamente es una abreviatura, por sus siglas en inglés, para “Pateando Traseros, Tumbando Cabezas”. Se alega que la estafa explotaba la ley de bancarrota como una manera de detener los procesos de ejecución hipotecaria por parte de los prestamistas hipotecarios, incluyendo a participantes de TARP. Muchos de los propietarios de vivienda que fueron engañados no hablaban inglés como su primer idioma. SIGTARP y nuestros socios del orden público investigaràn a fondo los alegatos de fraude relacionados con TARP y se aseguraràn de que los que lo cometen sean juzgados por sus delitos.”

“Mientras continúa la crisis de las ejecuciones hipotecarias, estamos viendo un alza en las estafas que se dirigen a los propietarios de vivienda que tienen dificultades”, dijo el Abogado General de California, Harris. “Estos depredadores les roban los ahorros de toda la vida y su porción del sueño americano a familias inocentes. Agradezco el buen trabajo que ha hecho el Grupo de Fuerza Operativa contra el Fraude Hipotecario de California y de nuestros colegas en el  Departamento de Justicia de los EE.UU por resolver este caso.”

“Las estafas de rescates hipotecarios se aprovechan de los dueños de viviendas que estàn teniendo dificultades y se confían. El impacto de este tipo e delito es de extrema importancia”, dijo José M. Martínez, Agente Especial a Cargo de Investigaciones Criminales del IRS (IRS-CI, por sus siglas en inglés). “El fraude en la industria hipotecaria ha tenido una función importante en casi destruir la economía de esta nación. IRS-CI està comprometida con procesar a los que se llenan los bolsillos con ganancias producto de estos esquemas.”

Este caso es una acusación conjunta por la Oficina del Abogado General de los Estados Unidos para el Distrito del Este de California y la Oficina del Abogado General de California. Es producto de una investigación extensa por la Inspectora General Especial para el Programa de Alivio para los Activos en Dificultad (SIGTARP), el Servicio de Rentas Internas - Investigaciones Criminales, el Departamento de Justicia de California  la Oficina del Abogado de Distrito del Condado de Stanislaus. El Abogado Asistente de los Estados Unidos, Philip Ferrari, y la Abogada General Auxiliar, Maggy Krel, son los fiscales del caso.

Tamara Tikal comparecerà al Tribunal hoy para leerle sus cargos y derechos. Se espera que traigan a Kornfeld a Sacramento en el futuro cercano. Alan Tikal tiene fecha de juicio programada para el 3 de febrero de 2014. Si se determina que son culpables, enfrentan una sentencia de hasta 30 años en prisión. Sin embargo, cualquier sentencia impuesta se determinarà a discreción del tribunal después de considera cualesquiera factores de sentencia mandados por estatuto y las Guías Federales de Sentencia, que toman en cuenta ciertas variables. Los cargos solamente son alegados pues se presume que los acusados son inocentes a menos que se les pruebe culpables màs allà de duda razonable.

Este caso se hizo en relación con el Grupo Operativo de Detección de Fraude Financiero que estableció el presidente de los EE.UU. El grupo operativo se estableció para poner en pràctica un esfuerzo enérgico para investigar y procesar los delitos financieros. Con màs de 20 agencias federales, 94 oficinas del abogado de los EE.UU. y los socios estatales y locales, es la coalición policíaca màs amplia que nunca hayan formado las agencias de investigación y regulación para combatir el fraude. Desde que se formó, el grupo operativo ha logrado avanzar mucho en facilitar las investigaciones y acusaciones de delitos financieros; mejorar la coordinación y cooperación entre las autoridades federales, estatales y locales; atender el discrimen en los mercados de crédito y financieros y establecer contacto con el público, las víctimas, las instituciones financieras y otras organizaciones. Para màs información, visite www.StopFraud.gov.

A pest control services company and its owner have been charged today in the U.S. District Court for the Middle District of Georgia with conspiracy, unlawful use of pesticides, false statements, falsification of records and mail fraud, announced Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and Michael J. Moore, U.S. Attorney for the Middle District of Georgia. 

Steven A. Murray, 54, of Pelham, Ala., and his company, Bio-Tech Management Inc., were charged in a felony indictment with one count of conspiracy, 10 counts of making false statements, 20 counts of falsifying records, 10 counts of mail fraud and 10 counts of unlawful use of a pesticide.
 
The indictment alleges that from October 2005 to June 2009, Steven Murray and Bio-Tech repeatedly misapplied the registered pesticide Termidor SC in nursing homes in the state of Georgia and falsified documents to conceal the unlawful use.  The indictment further alleges that Murray and Bio-Tech sent invoices through the U.S. Mail to their nursing home clients to solicit payment for the unlawful pesticide applications.   

According to the indictment, Steve Murray and Bio-Tech provided monthly pest control services to nursing homes in Georgia by spraying pesticides in and around their clients’ facilities.  The indictment alleges that, at the direction of Murray, Bio-Tech employees routinely applied the pesticide Termidor indoors more than twice a year, contrary to the manufacturer’s label instructions.  The indictment further alleges that after the Georgia Department of Agriculture made inquiries regarding Bio-Tech’s misuse of Termidor and other pesticides, Murray directed several of his Bio-Tech employees to alter company service reports with the intent to obstruct an investigation.         

U.S. Environmental Protection Agency (EPA) regulations require that all pesticides be registered, properly labeled, and applied as specified by manufacturer’s labeling to protect public health and the environment.

A criminal indictment is not a finding of guilt.  An individual or company charged by criminal indictment is presumed innocent unless and until proven guilty in a court of law. 

The falsifying records and mail fraud charge carry a maximum sentence of 20 years in prison and $250,000 fine per count.  The false statements charges each carry a maximum sentence of five years in prison and a $250,000 fine.  
 
These cases are being investigated by Special Agents of the EPA’s Criminal Investigations Division in Atlanta and prosecuted by Trial Attorneys Richard J. Powers and Adam C. Cullman of the Justice Department’s Environment and Natural Resources Division, Environmental Crimes Section.

One of the leaders of a criminal conspiracy that laundered more than $20 million through “shell” business bank accounts was sentenced today to 151 months in prison.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.
 
Willie Whitehurst, 45, of Houston, was sentenced by U.S. District Judge Lee H. Rosenthal of the Southern District of Texas.  In January and February 2013, Whitehurst and co-conspirators Enrique Morales, Fulton Smith and Anthony Foster pleaded guilty to conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business.  Another co-conspirator, Sarah Combs, also pleaded guilty to conspiracy to operate an unlicensed money transmitting business.
 
In August 2012, a federal grand jury in Houston indicted the five defendants for their parts in a large “Black Market Peso Exchange” scheme.  From October 2009 to September 2011, the defendants placed U.S. currency gained through the sale of drugs in U.S. cities into bank accounts held in the names of the organization’s “shell” companies.  The money was then transferred to different accounts in the U.S. and in Mexico.  In exchange, pesos were transferred back to accounts owned by the organization’s clients.

Morales was previously sentenced to 188 months in prison, and Foster received a sentence of 121 months in prison.  Smith was sentenced to 30 months, while Combs was sentenced to 24 months in prison.

The case was investigated by the Drug Enforcement Administration and the Internal Revenue Service – Criminal Investigation Division.  Assistant U.S. Attorney Ted Imperato of the Southern District of Texas and Trial Attorney Keith Liddle of the Money Laundering and Bank Integrity Unit of the Criminal Division’s Asset Forfeiture and Money Laundering Section prosecuted the case.

A federal grand jury in Covington, Ky., has returned an indictment against G.S. Electech Inc. executive, Shingo Okuda for his role in an international conspiracy to fix prices and rig bids of auto parts used on antilock brake systems installed in U.S. cars, the Department of Justice announced today. Today’s charge is the first to be filed in Kentucky in the department’s ongoing investigation into anticompetitive conduct in the automotive parts industry.

The indictment, filed today in the U.S. District Court for the Eastern District of Kentucky, charges Okuda, a Japanese national, with engaging in a conspiracy to rig bids for, and to fix, stabilize, and maintain the prices of speed sensor wire assemblies, which are installed in automobiles with an antilock brake system (ABS), sold to Toyota Motor Corp. and Toyota Motor Engineering and Manufacturing North America Inc. (collectively Toyota) in the United States and elsewhere.

G.S. Electech Inc. manufactures, assembles and sells a variety of automotive electrical parts, including speed sensor wire assemblies. The speed sensor wire assemblies connect a sensor on each wheel to the ABS to instruct it when to engage.

According to the charge, Okuda and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids and fix prices of automotive parts submitted to Toyota. According to the charge, Okuda’s involvement in the conspiracy lasted from at least as early as January 2003 until at least February 2010.

“ Today’s indictment marks the 16th executive to be charged in the Antitrust Division’s continuing investigation of price fixing in the auto parts industry,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “Holding individuals accountable for their actions is the surest way to deter executives from choosing to collude rather than to compete for business.”

“Those who engage in price fixing, bid rigging and other fraudulent schemes harm the automotive industry by driving up costs for vehicle makers and buyers,” said John Robert Shoup, Acting Special Agent in Charge, FBI Detroit Division.  “The FBI is committed to pursuing and prosecuting these individuals for their crimes.”

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

Including Okuda, 11 companies and 16 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.

In May 2012, G.S. Electech Inc. pleaded guilty and was sentenced to pay a $2.75 million criminal fine for its role in the conspiracy related to speed sensor wire assemblies.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s 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.

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A federal grand jury in St. Louis has indicted Stan Lee Stanback, 47, a police officer formerly with the Velda City Police Department, on charges related to the assaults of two juveniles and one adult on Sept.17, 2008.

Stanback is charged with three counts of using unreasonable force on the three victims listed in the indictment when he punched and struck each one of them.  The first two counts allege that Stanback used a police baton to assault the victims.  All three counts allege that Stanback’s actions resulted in injury to all of the victims.

The indictment also charges Stanback with making false statements to FBI agents when he intentionally lied, claiming that prior to his assaults on the victims, he was surrounded by 15 men in the parking lot of the Velda City Police Department and was forced to draw his gun during the encounter.  The indictment alleges that this was not true because Stanback knew at the time he spoke with FBI agents that he had only been approached by three juveniles and one adult and that he did not draw his gun.  

Stanback faces a statutory maximum penalty of 10 years in prison for each of the civil rights violations and five years in prison for the false statements charge.

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

This case is being investigated by the St. Louis Division of the Federal Bureau Investigation and is being prosecuted by Fara Gold of the Civil Rights Division of the U.S. Department of Justice.

Four members and associates of the Armenian Power gang and four other individuals pleaded guilty late yesterday to charges relating to the activities of the Armenian Power criminal enterprise, including racketeering conspiracy, bank fraud, aggravated identity theft, drug-trafficking and illegal possession of firearms.

The guilty pleas were announced today by 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.

 The following defendants pleaded guilty before U.S. District Judge Dean D. Pregerson in the Central District of California:

• Karo Yerkanyan, aka “Guilty,” 32, of Tujunga, Calif., pleaded guilty to racketeering conspiracy, bank fraud, aggravated identity theft, conspiracy to possess with intent to distribute marijuana and felon-in-possession of a firearm; • Arman Tangabekyan, aka “Spito” and “Thick Neck,” 34, of Encino, Calif., pleaded guilty to racketeering conspiracy, bank fraud and aggravated identity theft; • Artur Pembejian, aka “Cham,” 36, of Burbank, Calif., pleaded guilty to racketeering conspiracy; • Raymond Tarverdyan, aka “Rye,” 35, of Montrose, Calif., pleaded guilty to racketeering conspiracy and bank fraud; • Simon Antonyan, aka “Simo,” 38, of Hollywood, Calif., pleaded guilty to aggravated identity theft; • Khachatur Arakelyan, aka “Khecho,” 39, of Glendale, Calif., pleaded guilty to aggravated identity theft; • Vartenie Ananian, 29, of Tujunga, pleaded guilty to bank fraud; and

• Adam Davoodian, 32, of Glendale, Calif., pleaded guilty to conspiracy to possess with intent to distribute marijuana.

The defendants who pleaded guilty yesterday were among 70 individuals charged in a 140-count indictment in July 2011 for criminal activities associated with the Armenian Power gang.  The indictment accused 29 defendants, including four of those who pleaded guilty yesterday, of participation in the Armenian Power RICO conspiracy.  The RICO conspiracy charge alleges a host of illegal activities, many of which involved sophisticated fraudulent schemes of identity theft, bank fraud, credit card skimming, manufacturing counterfeit checks and laundering criminal proceeds, often electronically.  In addition, defendants were involved in a variety of violent crimes, such as extortion, kidnapping and firearms offenses.  Among the schemes charged in the racketeering indictment is a bank fraud and identity theft scheme that victimized hundreds of customers of 99 Cents Only Stores throughout Southern California.  Through the scheme, defendants caused more than $2 million in losses when they secretly installed sophisticated “skimming” devices to steal customer debit card account information at cash registers, and then used the skimmed information to create counterfeit debit cards to steal money from victims’ bank accounts.

The eight defendants who pleaded guilty yesterday played various roles in the activities of the Armenian Power gang, including participating in bank fraud, drug distribution, access device fraud, identity theft and illegal firearm possession. 

Yerkanyan, a member of the Armenian Power conspiracy, participated in a bank fraud scheme that obtained the personal identifying information and account information of victims.  He and his co-conspirators used the information to open fraudulent bank accounts, loans and lines of credit at HSBC Bank and Bank of America without the knowledge of the victims.  Tangabekyan, a member of the Armenian Power conspiracy, participated in a bank fraud scheme by obtaining personal information and account information for victims and then obtaining or transferring over $475,000 in funds. 

Yerkanyan also participated, along with Davoodian, in a scheme to steal approximately 207 pounds of marijuana, worth approximately $450,000, from another drug distributor. 

Pembejian, a member of the Armenian Power conspiracy, abetted the illegal possession of a firearm by a leader of the Armenian Power gang, Mher Darbinyan. 

Tarverdyan, an Armenian Power member, and Antonyan, Arakelyan and Ananian participated in the scheme to install secret “skimming” devices at the 99 Cents Only Stores in order to obtain victims’ account information.

According to court documents, the Armenian Power street gang formed in the East Hollywood district of Los Angeles in the 1980s.  The gang’s membership consisted primarily of individuals of Armenian descent, as well as of other countries within the former Soviet bloc.  The Armenian Power has been designated under California state law as a criminal street gang and is believed to have over 250 documented members, as well as hundreds of associates. According to court documents, Armenian Power members and associates regularly carry out violent criminal acts, including murders, attempted murders, kidnappings, robberies, extortions, and witness intimidation in order to enrich its members and associates and preserve and enhance the power of the criminal enterprise.

The defendants are scheduled to be sentenced beginning on Nov. 25, 2013.  Yerkanyan faces a maximum penalty of 102 years in prison.  Tangabekyan faces a maximum penalty of 52 years in prison.  Tarverdyan faces a maximum penalty of 50 years in prison.  Ananian faces a maximum penalty of 30 years in prison.  Pembejian and Davoodian each face a maximum penalty of 20 years in prison.  And Antonyan and Arakelyan each face a maximum penalty of two years in prison.

Fifty-one defendants have previously pleaded guilty for their roles in the activities of the Armenian Power gang. 
 
The case is being prosecuted by Assistant U.S. Attorneys Martin Estrada, Elizabeth Yang and Stephen Wolfe of the Central District of California and Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section.  The case was investigated by the Eurasian Organized Crime Task Force, which is comprised of the FBI, the U.S. Secret Service, the Los Angeles Police Department, the Glendale Police Department, the Burbank Police Department, the Internal Revenue Service and U.S. Immigration and Customs Enforcement – Homeland Security Investigations.

Beginning on Oct. 1, 2013, all mail addressed to the Executive Office for Immigration Review’s (EOIR) Headquarters in Falls Church, VA, will be processed through a different mail processing facility. This facility change requires that EOIR use a new zip code. The street address of 5107 Leesburg Pike, Falls Church, VA, will remain the same, but the zip code will change from 22041 to 20530. The new mailing address is:

Mail and filings for the Office of the Chief Administrative Hearing Officer should be addressed to:

The Board of Immigration Appeals will no longer maintain a Post Office Box and will only accept mail sent to its street address. All Board filings and correspondence should be addressed to:

Mail addressed with the zip code 22041 after Oct. 1, 2013, may result in delayed delivery to all Headquarters EOIR offices.

- EOIR -

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

A former officer of Fendih Medical Supply Inc. was sentenced to serve 51 months in prison yesterday in Los Angeles for his role in a fraud scheme that resulted in $1.5 million in fraudulent claims to Medicare.  In addition, a physician was sentenced to 27 months in prison for his role in the 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.

Godwin Onyeabor, 49, of San Bernandino, Calif., was sentenced on Sept. 9, 2013, by U.S. District Judge Manuel L. Real in the Central District of California to 51 months in prison.  In addition to his prison term, Onyeabor was sentenced to three years of supervised release. Restitution will be determined at a later date.  Dr. Sri J. Wijegunaratne, 58, of Anaheim, Calif., was sentenced to 27 months in prison by Judge Real.  In addition to his prison term, Wijegunaratne was sentenced to three years of supervised release and ordered to pay restitution in the amount of $87,846.

On April 24, 2013, a jury in Los Angeles federal court found Wijegunaratne, Onyeabor and Heidi Morishita, 48, guilty of one count of conspiracy to pay and receive kickbacks.  In addition, Wijegunaratne and Onyeabor were found guilty of conspiracy to commit health care fraud.  Wijegunaratne was found guilty of seven counts of health care fraud, and Onyeabor was found guilty of eleven counts of health care fraud. 

During trial, the evidence showed that Onyeabor, as the former officer of a durable medical equipment (DME) supply company, fraudulently billed more than $1 million to Medicare for DME that was either never provided to its Medicare beneficiaries or was not medically necessary.  Wijegunaratne provided Onyeabor and others with medically unnecessary power wheelchair prescriptions, and both Wijegunaratne and Morishita sold power wheelchair prescriptions to Onyeabor and others.  

The evidence showed that Onyeabor and others paid Wijegunaratne and Morishita cash kickbacks for fraudulent prescriptions for DME, and Onyeabor and others used these prescriptions to bill Medicare for the power wheelchairs and other DME.  Several Medicare beneficiaries testified that they were lured to medical clinics with the promise of free items such as vitamins and juice, only to receive power wheelchairs which they did not need and did not want, and were unsuccessful in their attempts to reject delivery of the power wheelchairs from Onyeabor’s supply company. 

As a result of this fraud scheme, Onyeabor, Wijegunaratne and others submitted and caused the submission of approximately $1.5 million in false and fraudulent claims to Medicare and received almost $1 million on those claims.

Morishita’s sentencing is scheduled for Sept. 30, 2013. 

The case is being investigated by the FBI and the Los Angeles Region of the HHS-Office of Inspector General (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.  The case is being prosecuted by Assistant Chief Benton Curtis, Trial Attorneys Fred Medick and Alexander Porter 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 Lorain County, Ohio corrections officer pleaded guilty today to one count of deprivation of rights under color of law, announced Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division, Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.

According to court documents, Marlon Tayor, 47, of Vermilion, Ohio, assaulted an inmate by striking him repeatedly while working as a corrections officer in the Lorain County Jail.

These actions caused bodily injury to the inmate and deprived the inmate of the right to be free from cruel and unusual punishment, according to court documents.

“We in the Civil Rights Division are committed to working with our partners in the U.S. Attorney’s Office and the FBI to identify, and where appropriate, prosecute instances of law enforcement abuse,” said Acting Assitant Attorney General Samuels.

 “The vast majority of law enforcement officials do a great job,” said U.S. Attorney Dettelbach said. “When someone abuses the power and privileges of their office, however, they can and will be held accountable.”

“The acknowledgment of excessive force exhibited by a fellow officer in law enforcement is disconcerting,” said Special Agent in Charge Anthony.  “The public should be reminded that the vast majority of those serving within the criminal justice system do so with honor and integrity.  Any allegation of abuse or excessive force involving law enforcement officers takes on a particular sense of urgency and will continue to be a priority for the FBI.”

Taylor is scheduled to be sentenced on Dec. 19, 2013.

This investigation was conducted by the FBI’s Cleveland Office.  The case is being prosecuted by Assistant U.S. Attorneys Antoinette T. Bacon and Lauren Bell and Civil Rights Division Trial Attorney Betsy Biffl.

WASHINGTON – The Department of Justice, U.S. Environmental Protection Agency (EPA), and South Carolina Department of Health and Environmental Control (DHEC) announced a proposed settlement with the City of Columbia to resolve violations of the Clean Water Act (CWA), including unauthorized overflows of untreated raw sewage.  Columbia has agreed to undertake a thorough assessment of, and implement extensive improvements to, its sanitary sewer system at an estimated cost of $750 million. 

In addition, Columbia will implement a $1 million supplemental environmental project to restore streams, reduce flooding, and improve water quality in segments of Rocky Branch, Smith Branch and Gills Creek, waterways that run through historically low income and minority neighborhoods.

“This settlement will bring badly needed improvements to Columbia’s aging sewer infrastructure, reduce the dangers of sewage contamination and improve the quality of waterways in historically disadvantaged communities,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “It is good news for human health and the environment of South Carolina’s capital city today and for future generations.”

“In this settlement, the city of Columbia has taken responsibility for its aging sewer treatment system,” said U.S. Attorney for the District of South Carolina Bill Nettles.  “The city’s leadership and engineers have worked many long, hard hours with the engineers at the EPA and the Department of Health and Environmental Control in hammering out a solution that addresses the problems in the city sewer system, improves the quality of our rivers and streams, and the health and safety of South Carolinians for decades to come.  For that we are grateful.”

“Sewage overflows are a major problem that affects water quality in the Southeast and across the entire country because of aging infrastructure,” said Acting EPA Regional Administrator Stan Meiburg.  “Bringing systems like Columbia’s into compliance is one of EPA’s top enforcement priorities, and through this settlement the city is taking positive steps to correct longstanding sewer overflow problems.”

“We are pleased this matter has been resolved through a consent decree, rather than costly litigation,” said DHEC Director Catherine Templeton.  “This agency will continue to work closely with the city of Columbia and our federal partners to ensure the agreed-upon improvements are realized, and the health of the citizens and environment are protected.”

The proposed consent decree requires Columbia to implement a comprehensive sewer system assessment and rehabilitation program to address the existing problems of raw sewage overflows.  Based on the sewer system assessment, the city will develop and implement remedial projects and infrastructure upgrades to address conditions causing sewer overflows.  These remedial projects will be in addition to infrastructure upgrades already underway or planned by Columbia, which the consent decree also requires to be completed.  Lastly, the city will develop and implement specific programs designed to ensure proper management, operation and maintenance of its sewer system over the long-term to prevent future sewer overflows. 

Keeping raw sewage out of the waters of the United States is one of the EPA’s national enforcement initiatives for 2011 to 2013.  The initiative focuses on reducing sewer overflows, which can present a significant threat to human health and the environment.  These reductions are accomplished by obtaining cities’ commitments to implement timely, affordable solutions to these problems.

The United States has reached similar agreements in the past with numerous municipal entities across the Southeast, including Mobile and Jefferson County (Birmingham), Alabama; Miami-Dade County, Fla.; Atlanta and Dekalb County, Ga.; Northern Kentucky Sanitation District #1, Louisville/Jefferson County MSD, and Lexington-Fayette Urban County Government, Ky.; Jackson, Miss.; Wilmington/New Hanover County/Cape Fear Public Utility Authority, N.C.; and Memphis, Knoxville Utilities Board, Chattanooga and Nashville MWS, Tenn..   

The proposed settlement is memorialized in a consent decree that was lodged yesterday in the U.S. District Court for the District of South Carolina.  The proposed consent decree is subject to a 30-day public comment period and final court approval. A copy is available on the Department of Justice website at: www.justice.gov/enrd/Consent Decrees.html.

More information on EPA’s national enforcement initiative is available at: www.epa.gov/compliance/data/planning/initiatives/2011sewagestormwater.html

NEW YORK -- Immigration Judge Terry A. Bain from the Executive Office for Immigration Review, New York Immigration Court, delivered the keynote speech and administered the oath of allegiance to approximately 150 candidates during a naturalization ceremony at 26 Federal Plaza in New York on September 6, 2013. The New York District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.

Biographical Information

Attorney General Janet Reno appointed Judge Bain in February 1994. Judge Bain received a bachelor of arts degree in 1973 from George Washington University, and a juris doctorate in 1980 from Brooklyn Law School. From 1986 to 1994, she worked as an attorney for Whitman, Breed, Abbott & Morgan in New York. From 1981 to 1986, she worked in private practice with Barst & Mukamal in New York. Judge Bain is a member of the New York State Bar.

- EOIR -

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

The Justice Department announced today that it will monitor elections on Sept. 10, 2013, in Cuyahoga County, Ohio, and in Queens County, N.Y.  The monitoring will 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. 

In Cuyahoga County, the Department will assign federal observers from the U.S. Office of Personnel Management (OPM) to monitor polling place activities based on a court order.  The observers will watch and record activities during voting hours at polling locations in this jurisdiction, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.

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

Each year, the Justice 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.

The Justice Department announced today that it reached an agreement with Kelly Services Inc., a staffing company based in Troy, Mich., resolving an allegation of discrimination based on citizenship status during the employment eligibility re-verification process at one of its branch locations in Schaumburg, Ill.  The investigation was initiated by the department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) based on information obtained from a former employee of the company who had contacted that office. 

The department’s investigation concluded that Kelly Services terminated the individual’s employment during the employment eligibility re-verification process when he did not produce a new U.S. Citizenship and Immigration Services (USCIS)-issued document, even though he had a valid unrestricted Social Security card at the time that was also acceptable to show continued employment eligibility.  To resolve the matter, Kelly Services has agreed to compensate the former employee for lost wages in the amount of $1,888.60 and pay a $1,100 civil penalty to the United States.  Designated Kelly Services staff will also participate in Justice Department training on employers’ responsibilities under the anti-discrimination provision of the Immigration and Nationality Act (INA).

 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 Kevin Casaus, 24, a former corrections officer at the Bernalillo County Metropolitan Detention Center (MDC) in Albuquerque, N.M., was sentenced this morning to serve 15 months in federal prison followed by one year of supervised release for his conviction on obstruction of justice and falsification of records charges.

Casaus and fellow former MDC corrections officers, Demetrio Juan Gonzales, 41, and Matthew Pendley, 26, were indicted in June 2012, and charged with various crimes related to the Dec. 21, 2011 assault of an inmate housed at MDC, and subsequent attempts to cover up and impede the investigation of the assault. 

On March 6, 2013, a federal jury convicted Casaus on obstruction of justice and falsification of records charges, and acquitted him on a related assault charge.  According to the evidence at trial, during the early morning hours of Dec. 21, 2011, Gonzales was assigned to the Receiving-Discharge-Transfer (RDT) Unit at MDC where individuals are brought to be booked soon after they are arrested.  His job was to photograph and fingerprint those who are brought to RDT for booking.  The victim, who had been arrested for driving while intoxicated, was verbally uncooperative during the booking process, but was not a physical threat to anyone.  Gonzales, who had previously pleaded guilty, testified that he became angry at the victim and walked him to the shower room where he knew there were no surveillance cameras.  Several other corrections officers, including Casaus, followed Gonzales to the shower room.  There, Gonzales physically assaulted the victim, striking him multiple times, and choking him.  Gonzales testified that he beat the victim “in a blind rage” and then had to wash the victim’s blood off his hands.  He further testified that the victim did not do anything to justify the beating.

According to the testimony, Casaus and two other corrections officers were present in the shower room during the beating.  Additionally, a former inmate who was in the hallway outside the shower room at the time of the beating, overheard groans and sounds consistent with the assault coming from the shower room. The former inmate was then tasked with cleaning the blood that was on the floors and walls of the shower room.  Casaus falsely stated during a recorded interview with a Bernalillo County Sheriff’s Office investigator that the victim was not assaulted in the shower room, the victim was not bleeding and that they only brought the victim to the shower room to ask him to change out of his clothes.  Casaus falsified his report when he wrote that he saw blood on the victim's clothes, but did not know where the blood came from.

In October  2012, Gonzales pleaded guilty to violating the civil rights of an individual in his custody when he struck and choked the victim in the shower room/dress out area of MDC and subsequently was sentenced to 33 months in prison followed by three years of supervised release.  Pendley pleaded guilty in February 2012 to obstructing justice by making false statements to law enforcement during their investigation of the assault on an inmate and was sentenced to a five year term of probation.

“Law enforcement officers who lie and obstruct justice to cover a fellow officer’s criminal acts do a disservice to the community that they swore to serve and protect,” said Acting Assistant Attorney General for Civil Rights Jocelyn Samuels.  “As the prosecution of these three MDC corrections officers demonstrate, the Civil Rights Division, in conjunction with our partners at the U.S. Attorney’s Office and FBI, is committed to holding law enforcement officers accountable when they violate their sworn duty to uphold the Constitution.”

“A correction officer who actively covers up illegal violence perpetrated by another officer re-victimizes a victim, undermines the public’s confidence in the justice system and fosters a belief that correction officer violence perpetrated on inmates will be met with impunity rather than justice,” said Acting U.S. Attorney Steven C. Yarbrough of the District of New Mexico.  “Such a culture cannot, and will not, be tolerated.”

“Correctional officers are given tremendous power to enforce the law.  When that authority is abused, it's not just the civil rights of prison inmates that are threatened, but the public's trust in our democratic institutions as well,” said Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI.  “The FBI, as the lead agency for investigating abuses of government officials, places a high priority on these cases.  I would like to commend the FBI Special Agents who worked on this case, with the assistance of the U.S. Attorney's Office, the Justice Department's Civil Rights Division, the Bernalillo County Sheriff's Office and the Metropolitan Detention Center's executive management and internal affairs staff.”

This case was investigated by the Albuquerque Division of the FBI and was prosecuted by Assistant U.S. Attorney Mark T. Baker for the District of New Mexico and Trial Attorney Fara Gold of the Civil Rights Division.

Attorney General Eric Holder met with Mexican Attorney General Jesús Murillo Karam today to discuss the release by the Mexican government of Rafael Caro Quintero, who was convicted of murdering Drug Enforcement Administration (DEA) Agent Enrique "Kiki" Camarena in February 1985. 

Caro Quintero was convicted and sentenced in Mexico for charges related to the 1985 kidnapping, torture and murder of DEA Camarena.  He was sentenced to serve 40 years in a Mexican prison in December 1989 but, after serving only 28 years of his sentence, a Mexican court ruled that he had been improperly tried in a Mexican federal court rather than a state court and ordered his release on August 9, 2013. Mexican authorities are seeking reversal of that decision. Nonetheless, Caro Quintero remains at large.
Attorney General Holder expressed grave concerns and disappointment immediately after learning of Caro Quintero’s premature release. At today’s meeting with Mexican Attorney General Murillo, Attorney General Holder reiterated those concerns. 

“I appreciated the chance to discuss the recent developments in the case connected to the murder of DEA special agent Kiki Camarena and other important matters with Attorney General Murillo this afternoon.  I look forward to working with him to continue to advance our shared commitment to the rule of law. Nothing will weaken our resolve to hold accountable those who commit acts of violence against our brave law enforcement agents,” said Attorney General Holder.  “The kidnapping and murder of Agent Camarena was a heinous crime that shocked criminal justice professionals on both sides of the border.  Like many, I was surprised and deeply concerned to learn about the release of Rafael Caro Quintero last month.  We will continue to work with our Mexican counterparts to ensure that Caro Quintero does not escape justice.”

In May 1987, the Department of Justice, through the United States Attorney’s Office in the Central District of California, indicted Caro Quintero and several others, for conspiracy and racketeering charges related to the kidnapping, torture and murder in Mexico of Agent Camarena.  Since then, the Department of Justice has continued to make clear to Mexican authorities the continued interest of the United States in ensuring that Caro Quintero faces justice.