District Not Recorded

A member of the Aryan Brotherhood of Texas (ABT) gang pleaded guilty today to racketeering charges related to his membership in the ABT’s criminal enterprise, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

Benjamin Troy Johnson, aka “South,” 42, of Corpus Christi, Texas, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity. 

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

By pleading guilty to racketeering charges, Johnson has admitted to being a member of the ABT criminal enterprise.

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

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

According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member.  Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect while his conduct is observed by the members of the ABT.
 
Judge Lake has set sentencing for Jan. 30, 2013, at which time Johnson faces a maximum penalty of life in prison.

Johnson is one of 36 defendants charged with, among other things, conducting racketeering activity through the ABT criminal enterprise.  He is the 13th defendant charged in the indictment to plead guilty. 
 
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement -Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Tarrant County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office;  Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite Texas, Police Department; Montgomery County District Attorney’s Office;  and the Atascosa County District Attorney’s Office.  

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

Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division issued the following statement today after the U.S. District Court for the Southern District of New York issued an order regarding a remedy to address Apple Inc.’s illegal conduct:

“We’re pleased that the court has issued an order supporting the Department of Justice’s efforts to address Apple’s illegal price fixing conduct.  Consumers will continue to benefit from lower e-books prices as a result of the department’s enforcement action to restore competition in this important industry. By appointing an external monitor to ensure future compliance with the antitrust laws, the court has helped protect consumers from further misconduct by Apple.  The court’s ruling reinforces the victory the department has won for consumers.”

The court’s order requires Apple to modify its existing agreements with the five major publishers with which it conspired – Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, which does business as Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc. – to allow retail price competition and to eliminate the most favored nation (MFN) pricing clauses that led to higher e-book prices.  Apple is prohibited from serving as a conduit of information among the conspiring publishers or from retaliating against publishers for refusing to sell e-books on agency terms. Apple is also prohibited from entering into agreements with e-books publishers that are likely to increase the prices at which Apple’s competitor retailers may sell that content.

Additionally, the court has decided to appoint an external monitor to ensure that Apple’s internal antitrust compliance policies will be sufficient to catch future anticompetitive activities before they result in harm to consumers. The monitor, whose salary and expenses will be paid by Apple, will work with an internal antitrust compliance officer who will be hired by and report exclusively to the outside directors comprising Apple’s audit committee. The antitrust compliance officer will be responsible for training Apple’s senior executives about the antitrust laws and ensuring that Apple abides by the relief ordered by the court.

On April 11, 2012, the department filed a civil antitrust lawsuit in the U.S. District Court for the Southern District of New York against Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster, for conspiring to end e-book retailers’ freedom to compete on price by taking control of pricing from e-book retailers and substantially increasing the prices that consumers paid for e-books.

At the same time that it filed the lawsuit, the department reached settlements with three of the publishers – Hachette, HarperCollins and Simon & Schuster. Those settlements were approved by the court in September 2012. The department settled with Penguin on Dec. 18, 2012, and with Macmillan on Feb. 8, 2013.  The Penguin settlement was approved by the court on May 20, 2013, and the Macmillan settlement on Aug. 14, 2013.  Under the settlements, each publisher was required to terminate agreements that prevented e-book retailers from lowering the prices at which they sell e-books to consumers and to allow for retail price competition in renegotiated e-book distribution agreements.

The department’s trial against Apple, which was overseen by Judge Denise Cote, began on June 3, 2013. The trial lasted for three weeks, with closing arguments taking place on June 20, 2013. The court issued its opinion that Apple Inc. violated Section 1 of the Sherman Act on July 10, 2013. The department and 33 state attorneys general submitted a proposed remedy to the court on Aug. 2, 2013.  Apple submitted a separate remedy.  The court held remedy hearings on Aug. 9 and 27, 2013, and asked the parties to revise their proposals.  The department, 33 state attorneys general and Apple submitted a joint remedy to the court on Sept. 5, 2013. 

The United States has settled a lawsuit alleging that an automobile dealership formerly doing business in Los Angeles violated the Equal Credit Opportunity Act (ECOA) by charging non-Asian customers higher interest rate markups than other customers for a period of at least three years, the Justice Department announced today.  Union Auto Sales Inc., has agreed to pay $125,000 to resolve the allegations against it.  The court entered the consent decree on Sept. 4, 2013.

           
The department’s amended complaint, filed in federal court in Los Angeles in March 2010, alleged that Union Auto Sales Inc., doing business as Union Mitsubishi, as well as other dealerships that are now out of business and in bankruptcy proceedings, charged higher interest rate markups on car loans to non-Asian customers, many of whom were Hispanic, than to similarly-situated Asian customers.  In the auto industry, it is common practice for banks and other lenders to set a base interest rate or “buy rate” and then for the auto dealership to “mark up” the interest rate to the final rate the customer pays on the loan for the car.  The complaint alleges that Union Auto Sales Inc., charged higher interest rate markups to non-Asian customers from at least 2004 to 2006.

           
Union Auto Sales Inc., is not currently in, and has no plans to re-enter, the business of automobile sales. Under the consent decree, Union Auto Sales will pay up to $125,000 to non-Asian customers who were charged higher dealer interest rate markups.  If Union Auto Sales or  its principal shareholder re-enter the business of automobile lending within the two year duration of the consent decree, it will implement clear guidelines for setting dealer markup and pricing, in compliance with ECOA, and establish appropriate fair lending training for its employees and officers.   

 
“The Civil Rights Division enforces federal laws that protect consumers from auto lending discrimination,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “Every consumer should be treated fairly in the pursuit of credit, without regard to their race or nationality.” 

           
This case came out of a referral from the Federal Reserve Board involving Nara Bank.  The department entered into a partial consent decree with Nara Bank, a bank that financed many loans for Union Auto Sales and other car dealerships, in 2009.  The partial consent decree required the bank to pay $410,000 to compensate several hundred non-Asian borrowers who were aggrieved by the discriminatory conduct.

A copy of the complaint, the consent decree, and the partial consent decree entered into with Nara Bank, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.usdoj.gov/fairhousing.

The Depatment of Justice and U.S. Attorney Wendy J. Olson for the District of Idaho announced today that they reached an agreement with the Jerome County, Id., Sheriff’s Office to resolve the allegations that Jerome County violated the employment rights of Idaho Army National Guard Member Mervin Jones while he was recuperating from a knee injury that he sustained while performing military service. 

The department’s complaint alleged that the Jerome County Sheriff’s Office violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to properly reemploy and subsequently terminating Jones following his service with the Idaho Army National Guard.  The complaint states that Jones began working for the Jerome County Sheriff’s Office as a correctional deputy in 2002.  By 2007, he had been promoted through the ranks to corporal.  During his employment with the sheriff’s office, Jones suffered a knee injury while deployed to Iraq in 2004, which Jones later aggravated in 2008 during a weekend training event with his guard unit.  The complaint alleges that in 2009, while Jones was still recuperating from multiple knee surgeries, the sheriff’s office forced  him to complete Family Medical Leave Act paperwork even though his leave was protected under USERRA, denied him light duty work to accommodate his physical limitations caused by the knee injury, attempted to subject him to an unlawful “fitness for duty” evaluation and physical fitness test before allowing him to return to work, and terminated his employment during the period of time permitted by USERRA to recover from an injury incurred in the line of duty. The settlement reached is a compromise to avoid the expense and uncertainty of litigation.

Subject to certain limitations, USERRA requires that service members who leave their civilian jobs to serve in the military be reemployed promptly by their civilian employers in the positions they would have held if their employment had not been interrupted by military service or in positions of comparable seniority, pay and status.  In addition, USERRA requires employers to accommodate service members who are injured in the line of duty, and allows service members who are recuperating from such an injury up to two years to obtain reemployment without facing termination by their civilian employers. 
 
Under the terms of the agreement, which was filed as a consent decree in the U.S. District Court for the District of Idaho, Jerome County has agreed to pay $150,000, which includes $75,000 in lost wages, to Jones.  Jerome County has also agreed to provide a letter that requests Jones’ return to the state employment eligibility register maintained by the Idaho Division of Human Resources.

“This settlement demonstrates our commitment to vigorous enforcement of the laws that protect the employment rights of our servicemembers,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The department is pleased that we were able to work cooperatively with Jerome County to resolve this matter without the need for contested litigation.”
“USERRA affords military members who leave their civilian careers behind for significant periods of time to serve our country certain protections against unjust terminations,” said U.S. Attorney Olson.  “It is important that all veterans and especially those veterans who are injured serving their country, have the opportunity to return to civilian life and their careers free from worry about termination without cause.”

The case stems from a referral by the United States Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service.  This case is being handled by the Civil Rights Division and the U.S. Attorney’s Office for the District of Idaho.

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

Related Materials:

Consent decree

A Brooklyn, N.Y., resident pleaded guilty today for his role as a patient recruiter in a $13 million kickback and health care fraud scheme, the fourth defendant to plead guilty in the scheme based at the Cropsey Medical Care PLLC clinic in Brooklyn.

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.

Gregory Konoplya, 57, pleaded guilty before U.S. Magistrate Judge Roanne Mann of the Eastern District of New York to one count of conspiracy to pay and receive illegal health care kickbacks.  At sentencing before U.S. District Judge Nina Gershon, scheduled for Dec. 4, 2013, Konoplya faces a maximum penalty of five years in prison.

Court documents state that Konoplya, working through an ambulette company in Brooklyn, recruited patients to attend Cropsey Medical.  An ambulette is a vehicle that is licensed by New York State’s Medicaid program to transport beneficiaries to and from medical facilities when such transportation is medically necessary.  From 2009 to 2012, Konoplya paid employees of Cropsey Medical a per beneficiary cash kickback so that Cropsey Medical would accept Konoplya’s beneficiaries as patients and so that Konoplya’s ambulette company could bill Medicaid for the transportation of beneficiaries to and from Cropsey Medical.  Once Konoplya’s beneficiaries were transported to Cropsey Medical, they were paid cash kickbacks to induce them to continue to attend the clinic and to receive medically unnecessary physical therapy, diagnostic testing and other services.  Such purported medical services were then billed by Cropsey Medical to Medicare and Medicaid.

According to court documents, from approximately November 2009 to October 2012, Cropsey Medical submitted more than $13 million in claims to Medicare and Medicaid, seeking reimbursement for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.

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

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.

The owners and operators of several Miami home health care agencies and a patient recruiter pleaded guilty today in connection with a health care fraud scheme involving defunct home health care company Trust Care Health Services Inc. (Trust Care).

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

Roberto Marrero, 60; Sandra Fernandez Viera, 49; and Enrique Rodriguez, 59, all of Miami, pleaded guilty before U.S. Magistrate Judge Edwin G. Torres in the Southern District of Florida to conspiracy to commit health care fraud and conspiracy to receive and pay health care kickbacks. 

Marrero and Fernandez Viera were owners and operators of Trust Care, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.  Rodriguez worked as a patient recruiter on behalf of Trust Care and Marrero and Fernandez Viera.

According to court documents, Marrero and Fernandez Viera operated Trust Care for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided. 

Marrero largely controlled Trust Care and, in light of that role, oversaw the schemes operating out of the company.  Fernandez Viera’s primary role, among others, involved managing and supervising personnel at Trust Care.  Both Marrero and Fernandez Viera were responsible for negotiating and paying kickbacks and bribes, interacting with patient recruiters, and coordinating and overseeing the submission of fraudulent claims submitted to the Medicare program. 

Marrero, Fernandez Viera and their co-conspirators paid kickbacks and bribes to patient recruiters, including Rodriguez, in return for the recruiters providing patients to Trust Care for home health and therapy services that were medically unnecessary and/or not provided.  Marrero, Fernandez Viera and their co-conspirators at Trust Care also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications and other documentation.  Marrero, Fernandez Viera and their co-conspirators used these prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services, which Marrero and Fernandez Viera knew was in violation of federal criminal laws.

Rodriguez offered and paid kickbacks and bribes to Medicare beneficiaries in return for those beneficiaries allowing Trust Care to bill Medicare for services that were medically unnecessary and/or not provided.  Rodriguez solicited and received kickbacks and bribes from the owners and operators of Trust Care, including Marrero and Fernandez Viera, in return for his patient recruiting.  Rodriguez knew that in many instances the patients he recruited for Trust Care did not qualify for the services billed to Medicare.

From approximately March 2007 through at least October 2010, Trust Care submitted more than $20 million in claims for home health services.  Medicare paid Trust Care more than $15 million for these fraudulent claims. 

Marrero, Fernandez Viera and Rodriguez also acknowledged their involvement in similar fraudulent schemes at several other Miami health care agencies in addition to Trust Care with estimated total losses of approximately $50 million, including Global Nursing Home Health Inc., Lovable Home Health Services Corp., New Concepts In Health Inc., Ubieta Health System Inc., R&M Health Care Inc., Vital Care Home Health Services Inc., Centrum Home Health Care Inc. and A&B Health Services Inc. 

At sentencing, scheduled for Nov. 12, 2013, the defendants face a maximum penalty of 10 years in prison for conspiracy to commit health care fraud and five years in prison for conspiracy to receive and pay health care kickbacks. 

The case was investigated by the FBI and HHS-OIG, with the assistance of IRS-CI, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.   
  
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 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 Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Felony charges were filed today in the U.S. District Court for the Northern District of California in San Francisco against Daniel Rosenbledt of Hillsborough, Calif. Rosenbledt is the 36th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

According to court documents, Rosenbledt conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Mateo and San Francisco counties, Calif. Rosenbledt was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert to co-conspirators money that would have otherwise gone to mortgage holders and others.

Court papers stated Rosenbledt conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in San Mateo County beginning as early as April 2008 and continuing until about January 2011. Rosenbledt was also charged with similar conduct in San Francisco County beginning as early as November 2009 and continuing until about January 2011.

“The Antitrust Division remains committed to vigorously pursuing conspirators who collude at foreclosure auctions at the expense of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “A competitive process benefits those homeowners who are looking for the best possible outcome during a difficult situation.”

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

“For those who engage in illegal anticompetitive practices at foreclosure actions, we will hold you accountable for your actions and bring you to justice,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The FBI and the Antitrust Division are committed to rooting out those who undermine the real estate market and take advantage of legitimate home buyers and sellers.”

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

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

Today's charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’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 fraud charge(s) referenced in this press release were

subsequently dismissed on the government’s motion.**

Today, the Civil Rights Division of the Justice Department and the U.S. Attorney for the Middle District of Georgia announced that Kadarius Thomas, a former member of the Correctional Emergency Response Team (CERT) and a former supervisor at Macon State Prison (MSP), in Oglethorpe, Ga., pleaded guilty to obstruction of justice. Thomas is the fourth former MSP officer to enter a guilty plea in connection with an ongoing federal investigation into staff assaults of inmates at the prison. 

In connection with his plea, Thomas admitted that he and other CERT members escorted an inmate to the gym, where CERT members hit the handcuffed inmate in retaliation for his prior assault on an MSP supervisor.  Thomas saw that the inmate had been injured by the unjustified use of force by CERT members.  Thomas knew from past experience that the CERT members would not report the force used on the inmate.  In keeping with directions from a supervisor, Thomas knowingly omitted from his report any reference to the unjustified force used on, or injuries inflicted upon, the inmate.  Thomas submitted his false MSP witness statement even though he understood it was inaccurate, incomplete, and untruthful. 
 
Thomas, 26, from Americus, Ga., faces a maximum penalty of 20 years in prison. 

“Mr. Thomas, by his statements, attempted to conceal the CERT team’s practice of using force to punish an inmate they swore an oath to protect,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels.  “Such actions have no place in our corrections system and the Department of Justice will continue to vigorously prosecute those who try to cover up such crimes.”

Michael J. Moore, the U.S. Attorney for the Middle District of Georgia, stated: “Today’s guilty plea is another example of the zero tolerance the Department of Justice has for correctional officers who use their position to try to cover up official misconduct.” 

This case is being investigated by the FBI and is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Tona Boyd of the Civil Rights Division of the Department of Justice, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia and the support of the Georgia Bureau of Investigation. 

The Department of Justice’s Civil Rights Division has reached a comprehensive settlement agreement with the Prince William County School District in Virginia to improve services for approximately 13,000 students who are English Language Learners (ELLs) and provide language access for Limited English Proficient (LEP) parents district-wide.  With the district’s cooperation, the department conducted an extensive examination of the ELL programs offered by all 93 schools in the district to determine whether ELL students were receiving adequate services as required by the Equal Educational Opportunities Act of 1974 (EEOA).  This examination was prompted by compliance issues identified during the department’s earlier EEOA investigation of a complaint regarding the ELL program at a district middle school.

The department identified several issues in its review, including inadequate ELL services for ELL students, an insufficient number of properly qualified teachers and administrators, inadequate ELL materials, gaps in the district’s communications with LEP parents, insufficient procedures for identifying and serving ELL students with disabilities and ensuring nondiscriminatory discipline of ELL students, an incomplete process for families to opt out of ELL services, and a lack of effective monitoring and evaluation of the district's ELL programs.

The agreement requires the district to address these compliance issues identified beginning in the 2013-14 school year and continuing for at least a three-year period.  Specifically, the district agrees to:

• Provide all ELL students, including students with disabilities, at all 93 schools with adequate English Language Development (ELD) and sheltered content instruction provided by teachers with appropriate qualifications or training; • Monitor the progress of ELL teachers and administrators towards obtaining required training, and ensure that administrators account for the use of appropriate ELD and sheltering techniques in teacher evaluations; • Require principals or other designated administrators to receive training regarding their ELL program-related responsibilities, including but not limited to establishing meaningful communications with parents of ELL students and LEP parents, ensuring that parents’ decisions to opt their children out of ELL services are informed and monitored, reviewing current and former ELL student performance and recommending program adjustments as needed and providing ELL students with adequate instructional materials; • Modify the district’s registration and enrollment practices to ensure that students are able to access its programs regardless of race, national origin or immigration status; • Provide ELL students and LEP parents with meaningful access to discipline and special education forms, codes, notices, procedures and meetings; • Institute cultural responsiveness training for teachers to promote effective engagement with students from diverse cultural and linguistic backgrounds; and
• Collect and review data to identify and address any student disparities and to evaluate the effectiveness of ELL programs.

“We applaud the Prince William County school district for working cooperatively with the United States to ensure that all English language learner students have access to the services to which they are entitled,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “We will continue to work cooperatively with the district to monitor its compliance with the agreement.”

The enforcement of the Equal Educational Opportunities Act is a top priority of the Justice Department’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.

Related Materials:

Agreement

Saipan, MP – United States Attorney for the Districts of Guam and the Northern Mariana Islands Alicia A.G. Limtiaco, together with the Federal Bureau of Investigation (FBI), Commonwealth of the Northern Mariana Islands (CNMI) Attorney General’s Office, and CNMI Department of Public Safety announced today the filing of a federal charge stemming from a joint investigation of sex offenses involving children:

- RAYMOND BORJA ROBERTO, acting Director of the CNMI Division of Fish and Wildlife, was charged in a federal criminal complaint with Coercion and Enticement, in violation of Title 18, United States Code, Section 2422(b).  A conviction carries a statutory minimum of at least ten years and a maximum sentence of life imprisonment.

U.S. Attorney Limtiaco stated that this prosecution is part of the U.S. Department of Justice’s Project Safe Childhood initiative, a nationwide initiative to protect children from sexual predators.

The investigation originated with the CNMI Department of Public Safety and was investigated jointly by DPS Criminal Bureau of Investigations and the FBI.  The case is being prosecuted by Assistant United States Attorneys Rami Badawy and Ross Naughton.

The charge is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

Copies of the complaints are attached.

Former U.S. Army Specialist Stephanie Charboneau pleaded guilty today to bribery charges for her role in the theft of fuel at Forward Operating Base (FOB) Fenty, near Jalalabad, Afghanistan, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division. 

Charboneau, 34, of Fountain, Colo., pleaded guilty before U.S. District Judge Phillip A. Brimmer in the District of Colorado to one count of conspiracy to commit bribery and one substantive count of bribery.

According to court documents, from approximately February through May 2010, Charboneau was involved in overseeing the delivery of fuel from FOB Fenty to other military bases.  As part of this process, documents generally described as transportation movement requests (TMRs) were created to authorize the movement of fuel. 

Court documents state that Charboneau created fraudulent TMRs that purported to authorize the transport of fuel from FOB Fenty to other military bases, even though no legitimate fuel transportation was required.  After the trucks were filled with fuel, the fraudulent TMRs were used by the drivers of the fuel trucks at FOB Fenty’s departure checkpoint in order to justify the trucks’ departures from FOB Fenty.  In truth, the fuel was simply stolen.

Charboneau pleaded guilty to receiving payments from a representative of the trucking company in exchange for facilitating the theft of approximately 90 fuel trucks.  According to court documents, the loss to the United States as a result of the theft was in excess of $1.5 million.

At sentencing, scheduled for Dec. 12, 2013, Charboneau faces a maximum penalty of five years in prison for conspiracy and 15 years in prison for bribery.

Charboneau’s plea is the fourth guilty plea arising from this investigation of fuel thefts at FOB Fenty.  On Aug. 3, 2012, Jonathan Hightower, a civilian employee of a military contractor who had conspired with Charboneau, pleaded guilty to similar charges.  On Oct.10, 2012, Christopher Weaver, who also conspired with Charboneau, pleaded guilty to fuel theft charges.  Both Weaver and Hightower pleaded guilty in the District Court of Colorado.   On Aug. 29, 2013, Sergeant Bilal Kevin Abduallah, who succeeded Charboneau at FOB Fenty, pleaded guilty in the Western District of Kentucky to fuel theft related charges. 

This case was investigated by the Special Inspector General for Afghanistan Reconstruction; Department of the Army, Criminal Investigations Division; Defense Criminal Investigative Service; and FBI. This case is being prosecuted by Fraud Section Trial Attorney Mark H. Dubester of the Justice Department’s Criminal Division.       

David Haigler, of Montgomery County, Ala., pleaded guilty in U.S. District Court for the Middle District of Alabama today to one count of theft of public funds and to one count of passing U.S. Treasury checks with forged endorsements, the Justice Department, the Internal Revenue Service (IRS) and U.S. Secret Service announced today.

According to court documents, between November 2011 and July 2012, Haigler obtained 263 fraudulent U.S. Treasury refund checks and refund anticipation loan checks totaling $606,781.34. The refund checks were in the names of different individuals who had not authorized Haigler to cash them. Haigler cashed the refund checks at a store in Millbrook, Ala., by providing the store with copies of fictitious powers of attorney in the names of the individuals on the checks.
 
For his involvement in the scheme, Haigler faces a maximum potential sentence of 20 years in jail and a fine of up to $500,000.

Trial Attorneys Jason Poole and Michael Boteler of the Justice Department’s Tax Division prosecuted the case. Special Agents of IRS - Criminal Investigation and the U.S. Secret Service conducted the investigation.

The U.S. District Court in Utah has concluded proceedings and approved a settlement of a lawsuit involving three claimed highway rights-of-way on Bureau of Land Management (BLM) administered public land adjacent to and within the Deep Creek Mountains Wilderness Study Area (WSA).  The court approved the settlement between the United States, the state of Utah and Juab County, and the Southern Utah Wilderness Alliance, The Wilderness Society, and the Sierra Club.

Under the settlement, negotiated by the Justice Department on behalf of the U.S. Department of the Interior and the BLM, public highway rights-of-way are recognized in those segments of the three claimed routes for which evidence of historic use satisfies the requirements of R.S. 2477.  R.S. 2477 is a provision enacted by Congress in 1866 that provided for public access across public lands by granting rights-of-way for the construction of highways. R.S. 2477 was repealed in 1976, but such rights-of-way that were established before its repeal are considered to be valid existing rights.

The terms of the settlement state that the roads shall not be developed, widened or otherwise enlarged, although they may be repaired if necessary.  In addition, the public may once again access the clearing known as Camp Ethel at the end of the Granite Canyon Road.  The parties also agreed that vehicle travel on some segments of the roads is subject to seasonal restrictions, and that Juab County would adopt an ordinance requiring vehicles to stay on the roads and not travel past their ending points, which the County passed in February 2013, and for the County to help patrol the roads on high-use weekends. 

BLM has agreed to conduct monitoring concerning water quality in Granite Canyon Creek and other resources, and the County and BLM will continue to work together in balancing needs for public access and protection of the WSA and its resources.  The State and Juab County have agreed not to claim other R.S. 2477 rights-of-way in the WSA and will limit their claims to rights-of-way on federal lands adjoining the WSA to twelve designated routes.

“The agreement is the first to settle longstanding claims by the state and counties of Utah for highway rights-of-way on federal lands, and does so in an environmentally sound and responsible manner,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s  Environment and Natural Resources Division. “This landmark settlement will recognize three historic rights-of-way claimed by Utah and Juab County that will remain in their primitive, undeveloped condition, while providing ample protection for the unique environment of the Deep Creek Mountains Wilderness Study Area.”

“I am very pleased that all the parties involved were able to work together to resolve this issue and settle this lawsuit in a way that promotes public interests and protects the resources on our public lands,” said Juan Palma, BLM Utah State Director. “This settlement serves as a tangible reminder that certain R.S. 2477 issues can be resolved through good-faith negotiations and cooperation.”

The Deep Creek Mountains WSA, spread across 68,910 acres in Tooele and Juab Counties, is an extremely remote location known for its combination of biological and geological wonders.  Stretching 32 miles in length and 15 miles at its widest point, the area is considered an “island” ecosystem due to its distance from inhabited areas.  It is home to alpine meadows, evergreen and aspen forests, and habitats for the peregrine falcon and six other sensitive bird species.  Some of the nine perennial streams that run through the WSA are populated by a pure strain of the Bonneville cutthroat trout, a state sensitive species.  It also features impressive geological formations such as quartzite cliffs. 

The State and Juab County filed the lawsuit in 2005 pursuant to the federal Quiet Title Act, and claimed that they held public highway rights-of-way, under R.S. 2477, to segments of three primitive roads known as the Trout Creek Road, Toms Creek Road and Granite Canyon Road.  

The three environmental groups were allowed to intervene as defendants in the lawsuit.  The parties engaged in long-term, good faith negotiations that resulted in the detailed and comprehensive settlement that has now been approved by the Federal District Court, and which dismisses the lawsuit.

The settlement underscores that representatives of the federal government, the State of Utah and its counties, and the environmental community can, through good-faith negotiations, resolve R.S. 2477 claims.  This is especially important given that in the last few years, the State and counties across Utah have filed over 25 similar Quiet Title Act lawsuits asserting claims for approximately 12,000 R.S. 2477 rights-of-way on federal public lands across the State. 

In a settlement agreement with the United States, Safeway, the nation’s second largest grocery store chain, has agreed to pay a $600,000 civil penalty and implement a corporate-wide plan to significantly reduce its emissions of ozone-depleting substances from refrigeration equipment at 659 of its stores nationwide, estimated to cost approximately $4.1 million, announced the U.S. Environmental Protection Agency (EPA) and Department of Justice today. 

The settlement involves the largest number of facilities ever under the Clean Air Act (CAA)’s regulations governing refrigeration equipment. 

The settlement resolves allegations that Safeway violated the federal CAA by failing to promptly repair leaks of HCFC-22, a hydro-chlorofluorocarbon that is a greenhouse gas and ozone-depleting substance used as a coolant in refrigerators, and failed to keep adequate records of the servicing of its refrigeration equipment. Safeway will now implement a corporate refrigerant compliance management system to comply with stratospheric ozone regulations. In addition, Safeway will reduce its corporate-wide average leak rate from 25 percent in 2012 to 18 percent or below in 2015. The company will also reduce the aggregate refrigerant emissions at its highest-emission stores by 10 percent each year for three years.

“Safeway’s new corporate commitment to reduce air pollution and help protect the ozone layer is vital and significant,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Fixing leaks, improving compliance and reducing emissions will make a real difference in protecting us from the dangers of ozone depletion, while reducing the impact on climate change.”

 “This first-of-its-kind settlement will benefit all Americans by cutting emissions of ozone-depleting substances across Safeway’s national supermarket chain,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “It can serve as a model for comprehensive solutions that improve industry compliance with the nation’s Clean Air Act.”

HCFC-22 is up to 1,800 times more potent than carbon dioxide in terms of global warming emissions. The measures that Safeway has committed to are expected to prevent over 100,000 pounds of future releases of ozone-depleting refrigerants that destroy the ozone layer. 

EPA regulations issued under Title VI of the CAA require that owner or operators of commercial refrigeration equipment that contains over 50 pounds of ozone-depleting refrigerants, and that has an annual leak rate greater than 35 percent repair such leaks within 30 days. 

HCFCs deplete the stratospheric ozone layer, which allows dangerous amounts of cancer-causing ultraviolet rays from the sun to strike the earth, leading to adverse health effects that include skin cancers, cataracts, and suppressed immune systems. Pursuant to the Montreal Protocol, the United States is implementing strict reductions of ozone-depleting refrigerants, including a production and importation ban by 2020 of HCFC-22, a common refrigerant used by supermarkets. 

The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including large grocery stores. 

Corporate commitments to reduce emissions from refrigeration systems have been increasing in recent years. EPA’s GreenChill Partnership Program works with food retailers to reduce refrigerant emissions and decrease their impact on the ozone layer and climate change by transitioning to environmentally friendlier refrigerants, using less refrigerant and eliminating leaks, and adopting green refrigeration technologies and best environmental practices.

Safeway, headquartered in Pleasanton, Calif., is the second largest grocery chain in North America with 1,412 stores in the United States and 2012 revenues of $44.2 billion. Safeway operates companies under the banner of Vons in southern California and Nevada, Randalls in Texas, and Carrs in Alaska. The settlement covers 659 Safeway stores – all Safeway stores in the United States that have commercial refrigeration equipment regulated by the CAA except for those stores in Safeway’s Dominick’s Division, which was the subject of a 2004 settlement with the United States.

The settlement was lodged today in the U.S. District Court for the Northern District of California, and 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.

For more information: http://www2.epa.gov/enforcement/safeway-inc-clean-air-act-settlement.

Adrian-Tiberiu Oprea, 29, of Constanta, Romania, and Iulian Dolan, 28, of Craiova, Romania, were sentenced today to serve 15 years and seven years in prison, respectively, for participating in an international, multimillion-dollar scheme to remotely hack into and steal payment card data from hundreds of U.S. merchants’ computers, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney John P. Kacavas of the District of New Hampshire; and Holly Fraumeni, Resident Agent in Charge of the U.S. Secret Service, Manchester, N.H., Resident Office.

On May 7, 2013, Oprea, who was extradited to the United States from Romania, pleaded guilty to one count of conspiracy to commit computer fraud, one count of conspiracy to commit wire fraud and two counts of conspiracy to commit access device fraud.  On Sept. 17, 2012, Dolan pleaded guilty to one count of conspiracy to commit computer fraud and two counts of conspiracy to commit access device fraud. 

 Court documents state that, from approximately 2009 to 2011, Oprea conspired with Dolan and Cezar Butu, 27, of Ploiesti, Romania, to hack into hundreds of computers located in the United States to steal credit, debit and payment account numbers and associated data (collectively “payment card data”) that belonged to U.S. cardholders. 

According to court documents, Oprea and Dolan remotely hacked into hundreds of U.S. merchants’ point-of-sale (POS) or “check out” computer systems, where customers’ payment card data was electronically stored.  Specifically, Oprea, who was the leader of the scheme, and Dolan, who was his trusted aide, first used the Internet to identify U.S.-based vulnerable POS systems.  After identifying a vulnerable system, Oprea and Dolan would gain access and install software programs called “keystroke loggers” (or “sniffers”) onto the POS systems.  These programs would record, and then store, all of the data that was keyed into or swiped through the merchants’ POS systems, including customers’ payment card data.
 
Oprea and Dolan retrieved the card data and then electronically transferred it to various electronic storage locations (“dump sites”) that Oprea had set up.  Oprea later attempted to use the stolen payment card data to make unauthorized charges on, or transfers of funds from, the accounts.  He also attempted to transfer the stolen payment card data to other co-conspirators for them to use in a similar manner.  During the course of the conspiracies, the co-conspirators hacked into several hundred U.S. merchants’ POS systems, including 250 Subway restaurant franchises, and stole payment card data belonging to more than 100,000 U.S. cardholders.  Their criminal conduct caused losses of at least $17.5 million in unauthorized charges and remediation expenses. 

 The case was investigated by the U.S. Secret Service, with assistance from the New Hampshire State Police and Romanian authorities.

The case is being prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.  Significant assistance was provided by the Criminal Division’s Office of International Affairs.

Two patient recruiters of a Miami health care company pleaded guilty late yesterday for their participation in a $48 million home health Medicare fraud scheme.

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

           Elizabeth Monteagudo, 33, and Cristobal Gonzalez, 39, both of Miami, pleaded guilty on Sept. 3, 2013, before U.S. District Judge Joan A. Lenard to one count each of conspiracy to receive health care kickbacks. Monteagudo also pleaded guilty to receipt of kickbacks in connection with a federal health care program. Both charges carry a maximum penalty of five years in prison, and sentencing for both defendants is scheduled for Dec. 2, 2013.

 According to court documents, Monteagudo and Gonzalez were patient recruiters who worked for Caring Nurse Home Health Care Corp., and Gonzalez also worked for Good Quality Home Health Care, Inc. Caring Nurse and Good Quality were Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.  
           
According to court documents, from approximately January 2009 through approximately June 2011, Monteagudo and Gonzalez would recruit patients for Caring Nurse and/or Good Quality and would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse and/or Good Quality in return for allowing the agency to bill the Medicare program on behalf of the recruited patients.  These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.

Monteagudo also admitted to her involvement with $7 million in fraudulent billings for Starlite Home Health Agency Inc., which she owned and operated. 

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

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

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

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

Four current and former soldiers of the U.S. Army National Guard pleaded guilty today for their roles in bribery and fraud schemes that caused a total of more than $210,000 in losses to the U.S. Army National Guard Bureau.

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

Melanie D. Moraida, 33, of Pearland, Texas; Kimberly N. Hartgraves, 28, of League City, Texas; Lashae C. Hawkins, 27, of San Antonio; and Vanessa Phillips, 35, of Houston, all pleaded guilty to one count of conspiracy and one count of bribery.

The cases against all four defendants arise from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses.  To date, the investigation has led to charges against 25 individuals, 15 of whom have pleaded guilty.

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

Moraida, Hartgraves, Hawkins and Phillips all admitted that they paid Army National Guard recruiters for the names and Social Security numbers of potential Army National Guard soldiers.  They further admitted that they used the personal identifying information for these potential soldiers in claiming that they were responsible for referring the potential soldiers to join the Army National Guard, when in fact they had not referred them.

As a result of these fraudulent representations, Moraida collected approximately $14,500 in fraudulent bonuses; Hartgraves collected approximately $2,000 in fraudulent bonuses; Hawkins collected approximately $33,000 in fraudulent bonuses; and Phillips collected approximately $10,000 in fraudulent bonuses.    
 
The charge of bribery carries a maximum penalty of 15 years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.  The charge of conspiracy carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.

The defendants are all scheduled to be sentenced on Dec. 17, 2013, before U.S. District Judge Lee H. Rosenthal in Houston.

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

The Justice Department announced today that a federal court has permanently barred Nina Thompson Price from preparing federal tax returns for others. The civil injunction order, to which Thompson Price consented, was signed Sept. 3, 2013, by Judge Nancy F. Atlas of the U.S. District Court for the Southern District of Texas. 

In the consent order, Thompson Price agreed that she, individually, and doing business as N.M. & T. Tax Service, prepared over 1,500 federal tax returns for customers during tax years 2009, 2010 and 2011 claiming false and exaggerated Schedule C business deductions and education credits, as well as other deductions to understate her clients’ tax liabilities and overstate their tax refunds.  The complaint alleges the United States suffered a total harm exceeding $100,000.   

The Internal Revenue Service lists tax-preparer fraud as one of the “Dirty Dozen” tax scams.  In the last decade the Justice Department has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available at www.justice.gov/tax/taxpress2013.htm.

Related Materials:

United States v. Nina Thompson Price, etc.
Complaint for Permanent Injunction and Other Relief
Stipulated Judgment of Permanent Injunction Against Nina Thompson Price also known as Nina Thompson d/b/a N.M. & T Tax Service

In the Obama administration’s latest step to ensure equal treatment for same-sex married couples following the Supreme Court’s decision to strike down a key section of the Defense of Marriage Act, U.S. Attorney General Eric Holder announced Wednesday that President Obama has directed the Executive Branch to take steps allowing for same-sex spouses of military veterans to collect federal benefits.

The new policy means that the administration will no longer enforce statutory language governing the Department of Veterans Affairs (VA) and the Department of Defense (DoD) that restricts the awarding of spousal benefits to opposite-sex marriages only. The language, contained within Title 38 of the U.S. Code, has, until now, prevented the Executive Branch from providing spousal benefits to veterans—and in some instances active-duty service members and reservists—who are in same-sex marriages recognized under state law. 

In a letter to Congressional leaders, Holder stated that the President’s decision was consistent with the Court’s decision in Windsor in June.

“Although the Supreme Court did not directly address the constitutionality of the Title 38 provisions in Windsor, the reasoning of the opinion strongly supports the conclusion that those provisions are unconstitutional under the Fifth Amendment,” Holder wrote.

The decision not to enforce Title 38 aligns with the Obama administration’s determination last year that two provisions of Title 38 that govern benefits for veterans and their families were unconstitutional as applied to legally married same-sex couples.  At that time, the Attorney General informed Congress that the Department would no longer defend the Title 38 provisions, but that the Executive Branch would continue to enforce them. Today’s announcement makes clear that enforcement of the provision in Title 38 defining marriage as between a man and a woman will now cease.

The announcement comes after the House Bipartisan Legal Advisory Group (BLAG) recently decided to stop defending the Title 38 provisions in pending cases. In addition, last week, a federal district court in California held the Title 38 provisions unconstitutional on equal protection grounds. After consideration of these developments and a recommendation by the Attorney General, the President directed the Executive Branch to cease enforcement of the Title 38 provisions.

A copy of the letter from the Attorney General to Congressional leaders is attached.

Related Materials:

Attorney General Holder's Letter to Congress

Angelique Djonret of Montgomery, Ala., was sentenced today to serve two years in prison for her involvement in a million dollar identity theft tax fraud scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.  Angelique Djonret pleaded guilty to identity theft on April 19, 2013.

According to court documents, between October 2009 and April 2012, Angelique Djonret’s sister, Antoinette Djonret, orchestrated a tax refund scheme using stolen identities to file over 1,000 false tax returns that fraudulently claimed over $1.7 million in tax refunds.  Antoinette Djonret obtained stolen identities from multiple sources, including Alabama state databases.  She also established an elaborate network for laundering the refund money.  Antoinette Djonret recruited her sister, Angelique, into the conspiracy, whose role was to obtain prepaid debit cards in her name and others’ names for purposes of receiving the fraudulent tax refunds.  Antoinette Djonret and her co-conspirators used the cards to obtain the refund proceeds.  Angelique Djonret also assisted in the filing of false tax returns using stolen identities.  Antoinette Djonret was previously sentenced to 12 years in prison. 

Assistant Attorney General Keneally and U.S. Attorney Beck commended the efforts of Special Agents of Internal Revenue Service - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Michael Boteler, and Assistant U.S. Attorney Todd Brown, who prosecuted the case.

Three employees of a New York-based U.S. broker-dealer have pleaded guilty for their roles in bribery schemes involving two state economic development banks in Venezuela.

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

Ernesto Lujan, Jose Alejandro Hurtado and Tomas Alberto Clarke Bethancourt pleaded guilty in New York federal court to conspiring to violate the Foreign Corrupt Practices Act (FCPA), to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses.  These charges relate to a scheme to bribe a foreign official named Maria de los Angeles Gonzalez de Hernandez at Banco de Desarrollo Económico y Social de Venezuela (BANDES), a state economic development bank in Venezuela, in exchange for receiving trading business from BANDES.  Lujan, Hurtado and Clarke each also pleaded guilty to an additional charge of conspiring to violate the FCPA in connection with a similar scheme to bribe a foreign official employed by Banfoandes (the “Banfoandes Foreign Official”), another state economic development bank in Venezuela, and to conspiring to obstruct an examination by the U.S. Securities and Exchange Commission (SEC) of the New York-based broker-dealer (the “Broker-Dealer”) where all three defendants had worked, to conceal the true facts of the Broker-Dealer’s relationship with BANDES. 

Lujan, 50, and Clarke, 43, entered their guilty pleas yesterday before U.S. Magistrate Judge James C. Francis IV, and Hurtado, 38, pleaded guilty today, also before Judge Francis. The men each pleaded guilty to the same six offenses and face a maximum penalty of five years in prison on each count except money laundering, which carries a maximum penalty of 20 years in prison.  Sentencing for Lujan and Clarke is scheduled for Feb. 11, 2014, before U.S. District Judge Paul G. Gardephe.  Hurtado is scheduled for sentencing before U.S. District Judge Harold Baer Jr. on March 6, 2014.

According to the informations filed against Lujan, Hurtado and Clarke this week, the criminal complaints previously filed, and statements made during the plea proceedings, Lujan, Clarke and Hurtado worked or were associated with the Broker-Dealer, principally through its Miami offices.  In 2008, the Broker-Dealer established a group called the Global Markets Group, which included Lujan, Clarke and Hurtado, and which offered fixed income trading services to institutional clients. 

One of the Broker-Dealer’s clients was BANDES, which operated under the direction of the Venezuelan Ministry of Finance.  The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding.  Gonzalez was an official at BANDES and oversaw the development bank’s overseas trading activity.  At her direction, BANDES conducted substantial trading through the Broker-Dealer.  Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed-income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales. 

The Broker-Dealer also conducted business with Banfoandes, another state development bank in Venezuela that, along with its 2009 successor Banco Bicentenario, operated under the direction of the Venezuelan Ministry of Finance.  Banfoandes acted as a financial agent of the Venezuelan government in order to promote economic and social development by, among other things, offering credit to low-income Venezuelans.  The Banfoandes Foreign Official was responsible for some of Banfoandes’s foreign investments.

Court records state that from early 2009 through 2012, Lujan, Clarke and Hurtado participated in a bribery scheme in which Gonzalez allegedly directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer split the revenue the Broker-Dealer generated from this trading business with Gonzalez.  During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES.  Agents and employees of the Broker-Dealer, including Lujan, Clarke and Hurtado, devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer.  Emails, account records and other documents collected from the Broker-Dealer and other sources reveal that Gonzalez allegedly received a substantial share of the revenue generated by the Broker-Dealer for BANDES-related trades.  Specifically, Gonzalez allegedly received kickbacks and payments from Broker-Dealer agents and employees that were frequently in six-figure amounts.

To further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that she held in Switzerland, among other places.  For instance, Lujan, Clarke and Hurtado used accounts they controlled in Switzerland to transfer funds to an account Gonzalez allegedly controlled in Switzerland.  Additionally, Hurtado and his spouse received substantial compensation from the Broker-Dealer, portions of which Hurtado transferred to an account allegedly held by Gonzalez in Miami and to an account held by an associate of Gonzalez in Switzerland.  Hurtado also sought and allegedly received reimbursement from Gonzalez for the U.S. income taxes he had paid on money that he used to make kickback payments to Gonzalez.  Lujan and Clarke also derived substantial profit from their roles in the bribery scheme.
   
According to court records, beginning in or about November 2010, the SEC commenced a periodic examination of the Broker-Dealer, and from November 2010 through March 2011 the SEC’s examination staff made several visits to the Broker-Dealer’s offices in Manhattan.  In early 2011, Lujan, Clarke and Hurtado discussed their concern that the SEC was examining the Broker-Dealer’s relationship with BANDES and asking questions regarding certain emails and other information that the SEC examination staff had discovered.  Lujan, Clarke and Hurtado agreed that they would take steps to conceal the true facts of the Broker-Dealer’s relationship with BANDES, including deleting emails.  Lujan, Clarke and Hurtado then, in fact, deleted emails.  Additionally as part of this effort to obstruct the SEC examination, Clarke lied to SEC examination staff in response to an interview question about his relationship to an individual who had received purported foreign associate payments relating to BANDES. 

In a related scheme, from 2008 through mid-2009, Lujan, Clarke and Hurtado paid bribes to the Banfoandes Foreign Official, who, in exchange, directed Banfoandes trading business to the Broker-Dealer.

Gonzalez was charged in a criminal complaint and arrested on May 3, 2013, in connection with the BANDES bribery scheme.  The charges against Gonzalez are merely accusations, and she is presumed innocent unless and until proven guilty.

This ongoing investigation is being conducted by the FBI, with assistance from the SEC and the Justice Department’s Office of International Affairs.

Assistant Chief James Koukios and Trial Attorneys Maria Gonzalez Calvet and Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution.  Assistant U.S. Attorney Carolina Fornos is responsible for the forfeiture aspects of the case.
 
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

A former office manager at the defunct health care provider Health Care Solutions Network Inc. (HCSN) was sentenced today in Miami to serve 68 months in prison for her role in a fraud scheme that resulted in more than $63 million in fraudulent claims to Medicare and Florida Medicaid.

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

 Lisset Palmero, 45, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida.  In addition to her prison term, Palmero was sentenced to three years of supervised release and ordered to pay restitution in the amount of $17.4 million.

During the course of the conspiracy, Palmero was employed as a receptionist and office manager at HCSN, a mental health facility that purported to provide Partial Hospitalization Program (PHP) services.  A PHP is a form of intensive treatment for severe mental illness.
        
HCSN of Florida (HCSN-FL) operated community mental health centers at two locations.  According to court documents, Palmero was aware that HCSN-FL paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid.  Palmero also knew that many of the ALF referral patients were ineligible for PHP services because they suffered from mental retardation, dementia or Alzheimer's disease. 

 Court documents reveal that Palmero was aware that HCSN-FL personnel were fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN-FL for purported PHP treatment.  Palmero was also aware that medical records were fabricated for “ghost patients” who were never admitted to the HCSN-FL PHP.  During her employment at HCSN-FL, Palmero actively concealed the fabrication of medical records by preparing, and causing others to prepare, documentation that was later utilized to support false and fraudulent billing to government-sponsored health care benefit programs, including Medicare and Florida Medicaid. 

 According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported HCSN-FL mental health services.

 This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney Allan J. Medina and former Special Trial Attorney William J. Parente.   
  
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.

The Department of Justice today announced a program that will encourage Swiss banks to cooperate in the department’s ongoing investigations of the use of foreign bank accounts to commit tax evasion.  The department also released a joint statement with the Swiss Federal Department of Finance, stating that Switzerland will encourage its banks to participate in the program.

“This program will significantly enhance the Justice Department's ongoing efforts to aggressively pursue those who attempt to evade the law by hiding their assets outside of the United States,” said Attorney General Eric Holder.  “In addition to strengthening our partnership with the Swiss government, the program’s requirement that Swiss banks provide detailed account information will improve our ability to bring tax dollars back to the U.S. treasury from across the globe.”

“This program will provide us with additional information to prosecute those who used secret offshore bank accounts and those here and abroad who established and facilitated the use of such accounts,” said Deputy Attorney General James M. Cole.  “Now is the time for all U.S. taxpayers who hid behind Swiss bank secrecy laws or have undeclared offshore accounts in other foreign countries to come forward and resolve their outstanding tax issues with the United States.”

Under the program, which is available only to banks that are not currently under criminal investigation by the department for their offshore activities, participating Swiss banks will be required to:

·          Agree to pay substantial penalties

·          Make a complete disclosure of their cross-border activities

·          Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest

·          Cooperate in treaty requests for account information

·          Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed

·          Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations

Banks meeting all of the above requirements will be eligible for non-prosecution agreements.  Banks currently under criminal investigation related to their Swiss banking activities, and all individuals, are expressly excluded from the program. 

The program holds banks to a higher degree of responsibility for opening secret accounts after it became publicly known that the department was actively investigating offshore tax evasion in Switzerland.  Under the penalty provisions of the program, banks seeking a non-prosecution agreement must agree to a penalty in an amount equal to 20 percent of the maximum aggregate dollar value of all non-disclosed U.S. accounts that were held by the bank on Aug.1, 2008.  The penalty amount will increase to 30 percent for secret accounts that were opened after that date but before the end of February 2009 and to 50 percent for secret accounts opened later than that.    

The program will significantly assist the department’s efforts to investigate and prosecute U.S. taxpayers who, when faced with the risk of detection, chose to move funds away from banks under investigation to banks that they believed might be better havens for tax secrecy.  A key component of the program requires cooperating banks to provide information that will enable the United States to follow the money to other Swiss banks and to banks located in other countries.

The program also provides a path to resolution for Swiss banks that were not engaged in wrongful acts with U.S. taxpayers but nonetheless want a resolution of their status.  Most banks in this category will be asked to provide an internal investigation report prepared by an independent examiner, as well as any additional information requested by the department.  A smaller group of banks will be allowed to show that they met certain criteria for deemed-compliance under the Foreign Account Tax Compliance Act (FATCA).  Banks in these two groups will be eligible to receive non-target letters.

The program is intended to enable every Swiss bank that is not already under criminal investigation to find a path to resolution.  It also creates significant risks for individuals and banks that continue to fail to cooperate, including for those Swiss banks that facilitated U.S. tax evasion but fail to cooperate now, for all U.S. taxpayers who think that they can continue to hide income and assets in offshore banks, and for those advisors and others who facilitated these crimes.

Since 2009, the department has charged more than 30 banking professionals and 68 U.S. accountholders with violations arising from their offshore banking activities.  Fifty-four U.S. taxpayers and four bankers and financial advisors have pled guilty, and five taxpayers have been convicted at trial.  One Swiss bank entered into a deferred prosecution agreement, and a second Swiss bank was indicted and pleaded guilty.  Currently, the department is actively investigating the Swiss-based activities of 14 financial institutions.  The department’s enforcement activities are global and have also included public actions concerning activities in India, Luxembourg, Israel and the Caribbean.

The program does not address current or future investigations and pending cases concerning bank employees, financial advisors and other individuals.  The department will address each of these cases only with the individual’s counsel, in a manner that gives consideration to the particular facts and circumstances of each case.  In those cases in which indictments are pending, any resolution will also require addressing outstanding issues with the court.  Counsel for banks currently under investigation, individuals who have been indicted, or bank employees who are concerned about whether they have potential criminal liability should contact the department’s Tax Division or the prosecutors handling their case if they wish to seek resolution.    

The department notes that the joint statement with the Swiss Federal Department of Finance provides that if personal data are provided, they should only be used for purposes of law enforcement, which may include regulatory action, in the United States or as otherwise permitted by U.S. law.  Additionally, the department has assured its Swiss counterparts that it understands that simply because the names of individuals are included in the information that it receives from a bank does not necessarily mean that any particular individual is or is not culpable of wrongdoing.  The support that Switzerland has shown for this program may also help those banks already under investigation take some of the steps necessary to reach a resolution. 

“Banks that come forward under the program that we have announced today have the opportunity to reach a resolution with the United States,” said Assistant Attorney General for the Tax Division Kathryn Keneally.  “The program will give us yet more information to pursue U.S. taxpayers who are continuing to hide their assets in offshore accounts, and creates significant risks for those Swiss banks that fail to come forward.  We recognize and express our appreciation for Switzerland’s support of the program.”

“The program the Department of Justice announced today is another positive step forward in the U.S. government’s continuing efforts to combat offshore tax evasion,” said Danny Werfel, Acting Commissioner of the Internal Revenue Service.  “On behalf of the IRS, I extend my appreciation to both the Justice Department and the Swiss government for developing a way forward that provides the United States with information that will be critical to the enforcement of our tax laws and will bring closure for Swiss banks that meet the requirements of the program.”

Related Materials:

Joint Statement and Program
Signed Joint Statement and Program
Comments on Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks
 

Two Los Angeles-based consulting firms, MotorScience Inc., and MotorScience Enterprise Inc., (MotorScience) and their owner, Chi Zheng, have agreed to settle alleged Clean Air Act (CAA) violations stemming from the illegal import of 24,478 all-terrain, recreational vehicles into the U.S. from China without testing to ensure emissions would meet applicable limits on harmful air pollution, announced the Department of Justice, the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (ARB).

MotorScience and Zheng have agreed to have a stipulated judgment entered against them for a $3.55 million civil penalty and to pay an additional $60,000 civil penalty within six months.  The United States will receive 80 percent of collected penalties, and California will receive the remaining 20 percent.

“Vehicles and engines that are manufactured overseas and sold in the U.S. must meet the same Clean Air standards as domestically-made products,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “We will continue to vigorously enforce these laws to ensure that American consumers get environmentally sound products that do not pollute the atmosphere and violators do not gain an unfair economic advantage by skirting the law.”

“This illegal importation of over 20,000 vehicles evaded federal emission standards, jeopardizing human health,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance.  “Engines operating without proper emissions controls can emit excess carbon monoxide, hydrocarbons and oxides of nitrogen which can cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog.”

“The integrity of new vehicle standards are the foundation for achieving our air quality goals in California,” said ARB Enforcement Chief James Ryden.  “When a manufacturer circumvents these requirements, they not only cheat their customers and competitors, but they also shortchange every citizen of our state who relies upon our shared actions to clean the air.”

Today’s settlement also requires that for the next 15 years, before either MotorScience or Zheng may engage in any further work involving non-road vehicles and engines, they must follow a rigorous compliance plan to ensure that any emissions testing and certification applications submitted to EPA or the ARB accurately represent those vehicles and engines.  Non-road vehicles and engines include recreational vehicles, generators, lawn and garden equipment, and other non-road internal combustion engines.

EPA’s investigation showed that MotorScience obtained EPA certificates of conformity for numerous vehicles without conducting required emissions testing.  As alleged in separate complaints filed in federal district court by the United States and the state of California in September 2011, MotorScience arranged for emissions testing of a limited number of vehicles, and then reused those results to obtain certificates of conformity for numerous other, dissimilar vehicles.  For at least three of those vehicles, EPA confirmed that their emissions exceeded the federal limits for hydrocarbons and nitrogen oxides. 

MotorScience and its president, Zheng, provide consulting services for vehicle manufacturers and other clients interested in obtaining certificates of conformity from EPA to allow import of their vehicles into the U.S.  In 2010, EPA voided 12 certificates held by four of the defendants’ clients, who were U.S.-based importers for Chinese recreational vehicle manufacturers.  The complaints filed by the U.S. and California alleged that defendants caused four of their clients to illegally import vehicles under federal certificates and California executive orders that were voided. The complaints further alleged that defendants caused their clients to fail to create and maintain required records on emissions testing.

The CAA prohibits any vehicle or engine from being imported into or sold in the United States unless it is covered by a valid, EPA-issued certificate of conformity demonstrating that the vehicle or engine meets applicable federal emission standards.  The CAA also prohibits any actions that cause the importation of uncertified vehicles or that cause recordkeeping violations.  Similarly, the California Health and Safety Code prohibits any vehicle or engine from being distributed or sold in California, unless such vehicle or engine is covered by a valid, ARB-issued executive order demonstrating that the vehicle or engine meets applicable California emission standards.

The certificate of conformity is the primary way EPA ensures that vehicles and engines meet emission standards.  This enforcement action is part of an ongoing effort by EPA to ensure that all imported vehicles and engines comply with the CAA’s requirements.

More information on the settlement: www2.epa.gov/enforcement/motorscience-and-chi-zheng-clean-air-act-settlement.

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

Jonathan Deck, 59, of Norwood, N.J., was sentenced today in federal court in Utica, N.Y., to 15 months in prison for conspiring to commit wire fraud in connection with the illegal dumping of thousands of tons of asbestos-contaminated construction debris on a 28-acre piece of property on the Mohawk River in upstate New York, the Justice Department announced. 

Deck was the last individual sentenced in a series of prosecutions that involved at least two companies and five individuals including Eagle Recycling, Mazza & Sons Inc., Julius DeSimone, Donald Torriero, Dominick Mazza, and Cross Nicastro. The investigation of this conspiracy spanned more than five years and resulted in more than 10 years of incarceration and more than $1 million in criminal fines, restitution, and cleanup costs to remediate a site now contaminated with more than 400 truckloads of asbestos-contaminated wastes. 

With respect to Mr. Deck, U.S. District Judge David N. Hurd sentenced him to serve 15 months in prison, followed by three years of supervised release.  He was further ordered to pay $492,000 in restitution for, among other things, cleanup expenses at the site.  Given the ongoing nature of the cleanup, Judge Hurd further authorized the United States to recoup additional, future cleanup costs from the conspirators as well.

Deck pleaded guilty to conspiring to violate the wire fraud statute.  According to the evidence, Deck and others conspired to fill in the entire property over the course of five years with pulverized construction and demolition debris that was processed at New Jersey solid waste management facilities and then transported to open property in Frankfort, N.Y.  The plot was uncovered by law enforcement just months after the operation began, but not before the conspirators had already dumped at least 400 truckloads of debris at the site.  Much of the material that was dumped was placed in and around waters of the United States and some of the material was found to be contaminated with asbestos.  The conspirators then concealed the illegal dumping and recruited others to join in the illegal dumping by fabricating a New York State Department of Environmental Conservation (DEC) permit and forged the name of a DEC official on the fraudulent permit. 

This case was investigated by the New York State Environmental Conservation Police, Bureau of Environmental Crimes, EPA’s Criminal Investigation Division, Internal Revenue Service, New Jersey State Police Office of Business Integrity Unit, New Jersey Department of Environmental Protection, and Ohio Department of Environmental Protection.  The case was prosecuted by Assistant U.S. Attorney Craig A. Benedict of the Northern District of New York, and Trial Attorneys Todd W. Gleason and Gary Donner of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

Today, the U.S. Department of Justice announced an update to its federal marijuana enforcement policy in light of recent state ballot initiatives that legalize, under state law, the possession of small amounts of marijuana and provide for the regulation of marijuana production, processing, and sale.

In a new memorandum outlining the policy, the Department makes clear that marijuana remains an illegal drug under the Controlled Substances Act and that federal prosecutors will continue to aggressively enforce this statute. To this end, the Department identifies eight (8) enforcement areas that federal prosecutors should prioritize.  These are the same enforcement priorities that have traditionally driven the Department’s efforts in this area.

Outside of these enforcement priorities, however, the federal government has traditionally relied on state and local authorizes to address marijuana activity through enforcement of their own narcotics laws. This guidance continues that policy.

For states such as Colorado and Washington that have enacted laws to authorize the production, distribution and possession of marijuana, the Department expects these states to establish strict regulatory schemes that protect the eight federal interests identified in the Department’s guidance. These schemes must be tough in practice, not just on paper, and include strong, state-based enforcement efforts, backed by adequate funding. Based on assurances that those states will impose an appropriately strict regulatory system, the Department has informed the governors of both states that it is deferring its right to challenge their legalization laws at this time.  But if any of the stated harms do materialize—either despite a strict regulatory scheme or because of the lack of one—federal prosecutors will act aggressively to bring individual prosecutions focused on federal enforcement priorities and the Department may challenge the regulatory scheme themselves in these states.

A copy of the memorandum, sent to all United States Attorneys by Deputy Attorney General James M. Cole, is available below.

Related Materials:

DAG Memo 8-29-13

Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division and Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, announced today that former North Carolina Department of Correction’s Division of Community Corrections Probation Officer Willie James Steele Jr., 43, has been sentenced for violating the constitutional rights of a female probationer that he was supervising by coercing her into sexual acts on two separate occasions.

According to an indictment and evidence presented in court, Steele supervised the female probationer in 2008 after her probation was transferred to North Carolina from another state and he had the authority to recommend to a court or other agency that the victim be incarcerated or otherwise sanctioned if she violated the conditions of her probation.  On Dec. 12, 2012, after a two-day trial, a jury found Steele guilty of two civil rights violations for depriving the victim of her constitutional right to bodily integrity by having non-consensual sexual intercourse with her during two separate probation meetings.

Chief Judge Robert J. Conrad, who presided over the trial, sentenced Steele to serve the statutory maximum incarceration of 24 months in prison, to be followed by one year of supervised release, for his convictions at trial.

“Probation officers are given a great deal of power in order to carry out their critical responsibilities, but this officer abused that power and violated the civil rights of a woman under his supervision,” said Acting Assistant Attorney General Samuels. “We will vigorously prosecute any probation officer who uses his position of trust to prey upon those he supervises.”

“Any time a law enforcement officer breaks the law it undermines the public’s trust in the legal system and we will do everything we can to ensure that trust is not compromised,” said U.S. Attorney Tompkins.  “My office will prosecute those who abuse their position of power and use it to violate the civil rights of others.”

This case was investigated by the FBI and the North Carolina State Bureau of Investigation, and is being prosecuted by the Assistant U.S. Attorney Kimlani Ford from the Western District of North Carolina and Trial Attorney Shan Patel from the Civil Rights Division.

Conax Florida Corp. and related companies have agreed to resolve allegations under the False Claims Act that the company submitted false claims to the government for improperly tested inertia reels and non-conforming voltage references, the Justice Department announced today.  Inertia reels are part of a system designed to secure aircrew members in the event of a crash.  On impact, inertia reels lock in place harnesses worn by aircrew members, preventing injury.  Voltage references are electronic parts used in water-activated parachute releases.  Both devices are used by the U.S. military and NASA.

“Our military deserves equipment that is properly built and tested, and meets specifications designed to ensure their safety,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “The Department of Justice will vigorously pursue cases where contractors provide improperly tested or deficient equipment to American military service members.”

“The settlement of the Conax case reflects our commitment to hold defense contractors accountable for delivering exactly what they are paid to deliver,” said Carter Stewart, U.S. Attorney for the Southern District of Ohio. “We will continue to pursue aggressively all allegations of misconduct in the procurement process.”

The government alleged that the inertia reels were not tested in accordance with contractual requirements and that Conax used non-conforming voltage references.  The voltage reference is an integral part of the water-activated parachute release, designed to protect unconscious or injured aircrew members who parachute into salt water.  These devices are intended to automatically separate parachutes from aircrew members when they are physically unable to do so.  If parachutes are not released, they may fill with water and drag aircrew members underwater. 

 
“The Defense Criminal Investigative Service is dedicated to ensuring that the Pentagon’s procurement programs provide safe, high-quality materials to support America's Warfighters, especially when it comes to critical life-saving equipment used by military aircrews,” said John F. Khin, Special Agent in Charge, DCIS-Southeast Field Office. 

 
“This settlement demonstrates that joint investigations with other law enforcement partners are a highly effective resource to combat fraud and preserve the integrity of vital Defense and federal procurement programs,” added Jeff Arsenault, Special Agent in Charge, DCIS-Central Field Office.

“This effort underscores the important role fraud detection plays in ensuring the safety of both air and space flight operations.  I commend the outstanding investigative efforts of the NASA and DCIS agents and the work of USAO for the Southern District of Ohio and the Commercial Litigation Branch of the Justice Department’s Civil Division in reaching this agreement,” said NASA Inspector General Paul K. Martin. 

Under the settlement announced today, Conax has paid $2 million to the government.  In addition, Conax has reached an agreement with the Defense Logistics Agency to provide the government with 4,969 new electronic parts for use with parachute releases, which are worth up to $2.4 million.

The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the government for false claims and obtain a portion of the government’s recovery.  The civil lawsuit was filed in the Southern District of Ohio by two former employees of Conax, Mark Hansson and Steven Schummer, who together will receive up to a total of $810,478.

The settlement with Conax was the result of a coordinated effort among the U.S. Attorney’s Office for the Southern District of Ohio, the Commercial Litigation Branch of the Justice Department’s Civil Division, the Defense Criminal Investigative Service and NASA’s Office of the Inspector General.  The claims resolved by this settlement are allegations only, and there has been no determination of liability.  

The lawsuit is captioned United States ex rel. Mark Hansson and Steven Schummer v. Conax Florida Corporation. 

Aaron Cohen of Encino, Calif., pleaded guilty today in the U.S. District Court for the Central District of California to conspiracy to defraud the United States, the Justice Department and Internal Revenue Service-Criminal Investigation (IRS-CI) announced. 

According to court documents, Cohen, a U.S. citizen, maintained undeclared bank accounts at two international banks headquartered in Tel Aviv, Israel, identified in court documents as Bank A and Bank B.  One of Cohen’s undeclared accounts was maintained at a branch of Bank A located in the Cayman Islands.  The accounts were held in the names of nominees in order to keep them secret from the U.S. Government.  In or about 2000, Cohen began using the funds in his undeclared account in the Cayman Islands as collateral for back-to-back loans obtained from another branch of Bank A located in Los Angeles.  Cohen’s ownership of the funds in the Cayman Islands accounts was not identified in the loan records maintained at the Los Angeles branch, thus concealing the fact that he was borrowing his own money, paying tax-deductible interest on the loans and not reporting the interest income he was earning in the Cayman Islands on his U.S. tax returns.

 According to the plea agreement, in or about 2009, Cohen transferred approximately $2 million from his Cayman Islands account at Bank A to a new offshore account at Bank B in Israel.  Cohen then used the funds in the new account as collateral to obtain a back-to-back loan from the Los Angeles branch of Bank B. Cohenfailed to report any income from the accounts on his individual income tax returns that were filed with the IRS.  For tax years 2006 through 2009, Cohen failed to report interest income of approximately $238,000.  The highest balance in the undeclared accounts was approximately $3,450,000.

“Today’s guilty plea is but the latest example that attempting to hide income and assets from the United States in offshore accounts is a bad gamble,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally.  “The Internal Revenue Service will find the hiding places and the Department of Justice will criminally prosecute these tax cheats, who face potential jail time, still owe the taxes due and may lose those hidden assets and more to severe civil penalties."

“Mr. Cohen is yet another taxpayer caught using anonymous offshore accounts to avoid paying his fair share of taxes,” said IRS Criminal Investigation Chief Richard Weber. “Through IRS-CI’s efforts, we are gaining access to more and more information on institutions and individuals involved in offshore tax fraud, and you can expect us to use all of our enforcement tools to fight offshore tax evasion.”

Cohen is the latest in a series of defendants charged in the U.S. District Court for the Central District of California with failing to report income from undeclared accounts in Israel.

On March 29, 2013, Zvi Sperling of Beverly Hills, Calif., pleaded guilty to conspiring to defraud the United States in connection with back-to-back loans obtained in Los Angeles at branches of Bank A and Bank B that were secured by funds in undeclared bank accounts in Israel.  For tax years 2005 through 2008, Sperling failed to report income of approximately $381,563. The highest balance in Sperling’s undeclared accounts was approximately $4 million.

On May 21, 2013, Guity Kashfi of Los Angeles, Calif., pleaded guilty to conspiring to defraud the United States in connection with back-to-back loans obtained from branches of Bank A and Bank B in Los Angeles that were secured by funds in undeclared bank accounts in Israel and Luxembourg.  For tax years 2005 through 2011, Kashfi failed to report interest income of approximately $221,306.  The highest balance in Kashfi’s undeclared accounts was approximately $2.5 million.

U.S. citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns.  Additionally, U.S. citizens and residents must file a Report of Foreign Bank and Financial Reports (FBAR) with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.

  Cohen faces a potential maximum prison term of five years and a maximum fine of $250,000.  In addition, Cohen has agreed to pay a civil penalty to the IRS in the amount of 50 percent of the high balance of his undeclared accounts for failing to file FBARs.   

Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division and André Birotte Jr., U.S. Attorney for the Central District of California thanked special agents of IRS-CI, who investigated the case, and Tax Division Senior Litigation Counsel John E. Sullivan and Assistant Chief Elizabeth C. Hadden, who prosecuted these cases, and Assistant U.S. Attorney Sandra A. Brown of the U.S. Attorney’s Office, who assisted with the prosecutions.

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

B. Todd Jones received the ceremonial oath-of-office as Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) administered by Vice President Joe Biden at the White House today at 10:00 a.m. EDT.  With his confirmation, Jones becomes the agency’s first permanent director in seven years.  Jones takes over the law enforcement agency responsible for enforcing firearms and explosives laws that protect communities from violent criminals and criminal organizations.

“I congratulate Todd on being sworn in as the first-ever Senate-confirmed Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives,” said Attorney General Eric Holder.  “I can think of no one better qualified to lead this critical agency, and to reinforce our shared commitment to the highest standards of professionalism and integrity in federal law enforcement.  For decades, Todd’s career has been shaped by a remarkable dedication to public service, and a steadfast determination to do that which is just and right.  I am confident that he will be a superb ATF Director, and look forward to continuing to work with him to protect the American people from violent crime.”

“Today is a historic day for ATF,” said ATF Director Jones.  “The agency is now in line with its sister components and has been given the respect it deserves as a federal law enforcement agency with a permanent director.  I want Americans to know, ATF is full of hard-working, devoted public servants who are committed to the mission of professional law enforcement.  I will lead with the same enthusiasm and dedication that I see daily from the team tasked with protecting our communities from the most violent criminals.”

Jones has served as the acting ATF director since being appointed to the post on Aug. 31, 2011.  While serving as the acting director of ATF, Jones was also the U.S. Attorney for the District of Minnesota, a post he held since Aug. 7, 2009.  Jones served as both ATF Acting Director and U.S. Attorney until his confirmation as ATF Director.

ATF’s primary mission is to protect Americans from violent criminals and criminal organizations from the illegal use and trafficking of firearms and the illegal use and storage of explosives.  ATF is also responsible for licensing persons engaged in manufacturing, importing, and dealing in firearms and explosives.  Additionally, ATF investigates acts of arson and criminal bombings and the illegal diversion of alcohol and tobacco products.

In fiscal year 2012, ATF recommended 17,366 defendants for prosecution resulting in 7,210 convictions.  Also in 2012, ATF industry operations investigators conducted 13,100 federal firearms licensee inspections and 5,390 federal explosives licensee inspections. 

For more information about ATF and its programs, please visit:  www.atf.gov.

U.S. Army Sergeant Kevin Bilal Abdullah pleaded guilty today to bribery charges for his role in the theft of fuel at Forward Operating Base (FOB) Fenty, near Jalalabad, Afghanistan.

The guilty plea was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the Western District of Kentucky David J. Hale.

 Abdullah, 30, of Fort Campbell, Ky., pleaded guilty before U.S. District Judge Thomas B. Russell in the Western District of Kentucky to one count of conspiracy to commit bribery and one substantive count of bribery. 

According to court documents, in approximately May and June 2010, Abdullah was involved in overseeing the delivery of fuel from FOB Fenty to other military bases.  As part of this process, documents generally described as “transportation movement requests” (TMRs or mission sheets) were created to authorize the movement of fuel. 

According to court documents, Abdullah created fraudulent TMRs that purported to authorize the transport of fuel from FOB Fenty to other military bases, even though no legitimate fuel transportation was required.  After the trucks were filled with fuel, the fraudulent TMRs were used by the drivers of the fuel trucks at FOB Fenty’s departure checkpoint in order to justify the trucks’ departures from FOB Fenty.  In truth, the fuel was simply stolen.

Abdullah pleaded guilty to receiving payments from a representative of the trucking company in exchange for facilitating the theft of approximately 25 truckloads of fuel.  According to court documents, the loss to the United States as a result of the theft was in excess of $400,000.

Abdullah’s plea is the third guilty plea arising from this investigation of fuel thefts at FOB Fenty.  On Aug. 3, 2012, Jonathan Hightower, a civilian employee of a military contractor who had conspired with Abdullah, pleaded guilty to similar charges.  On Oct. 10, 2012, Christopher Weaver also pleaded guilty to fuel theft charges.  A fourth individual, Stephanie Charboneau, was indicted April 9, 2013, and is pending trial on fuel theft-related charges.    

This case is being prosecuted by Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michael A. Bennett of the Western District of Kentucky.  This case was investigated by the Special Inspector General for Afghanistan Reconstruction; Department of the Army, Criminal Investigations Division; Defense Criminal Investigative Service; and FBI.     

Ohio-based RPM International Inc. and its subsidiary, Tremco Inc., have paid $60.9 million to resolve allegations that Tremco filed false claims in connection with two multiple award schedule (MAS) contracts with the General Services Administration (GSA) for roofing supplies and services, the Justice Department announced today. Tremco failed to provide the government with price discounts provided to non-federal government customers. Tremco also allegedly marketed expensive materials to government purchasers without disclosing the availability of the same materials at lower cost that were manufactured and sold by the company. Tremco is a manufacturer of construction products and services and is a subsidiary of the RPM Building Solutions Group.

 
“Companies that knowingly skirt the rules for securing government business undermine the integrity of the procurement process and create an unfair advantage against companies that are playing by the rules,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “We are committed to ensuring a level playing field and protecting taxpayer dollars.”

Allegedly, from January 2002 to March 2011, Tremco knowingly violated its contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, to report changes in discounts to comparable commercial customers and to pass those discounts on to government customers. As a result, the government allegedly paid more than it should have for Tremco’s services and products. In addition, Tremco allegedly improperly marketed generic products as a superior line of the same product and used a defective adhesive formula in its roofing systems.

The GSA MAS program provides government purchasers with a streamlined process for procurement of commonly used commercial goods and services. To be awarded a MAS contract, and thereby gain access to the broad government marketplace and ease of administration that comes from selling to hundreds of government purchasers under one contract, contractors must agree to disclose commercial pricing policies and practices.

 
GSA Inspector General Brian Miller said, “GSA OIG auditors and investigators worked diligently to make sure the taxpayers got the benefit of required price reductions, and received a fair price for the products and services purchased with taxpayer funds.”

 
“These companies are paying the price for trying to cheat the American taxpayer out of a fair deal,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “We thank this whistleblower for coming forward to reveal this wrongdoing. Other contractors who are considering bilking the government should take heed: false and fraudulent claims on the U.S. Treasury will not be tolerated.”

The settlement resolves a qui tam, or whistleblower, lawsuit filed on behalf of the government by former Tremco vice president Gregory Rudolph, who will receive more than $10.9 million as his share of the recovery in the case. Under the whistleblower provisions of the False Claims Act, private citizens can bring lawsuits on behalf of the government and share in any recovery. Rudolph’s lawsuit also includes allegations on behalf of several states under their false claims statutes. The settlement with the federal government does not resolve the state actions.

This settlement was the result of a coordinated effort by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia and GSA’s Office of Inspector General to investigate the allegations and resolve the case. The claims settled by this agreement are allegations only, and there has been no determination of liability.

The case is captioned United States, the States of California, Delaware, Florida, Illinois, Indiana, Massachusetts, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Tennessee, Virginia and the City of Chicago, ex rel. Gregory Rudolph v. Tremco Inc. and RPM International Inc. , Case No. 1:10-cv-01192 (D.DC) .

Alexis Candelario-Santana, 42, was sentenced today to life in prison for murdering eight people and an unborn child and attempting to murder 19 others during a mass shooting at a Puerto Rico nightclub in 2009.
 
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez made the announcement.

“The horrifying massacre at La Tómbola came just nine months after Candelario-Santana’s release from prison for committing 12 murders.  During his rampage, he brutally killed or injured dozens of other innocent victims, including children and the elderly,” said Acting Assistant Attorney General Raman.  “Our thoughts are with the victims and their families, and we hope that today’s life sentence brings some measure of comfort to them.  As this prosecution and today’s life sentence shows, we will not waver in our commitment to bringing violent criminals to justice.”

“With the sentencing of this career criminal we have made our community a safer place.  The U.S. Attorney’s Office will continue working along with other law enforcement agencies to prosecute criminals who deprive our communities of a peaceful and safe environment,” said U.S. Attorney Rodríguez-Vélez.  “I commend our prosecutors and investigative agencies who have demonstrated, once again, that our efforts continue to provide positive results to the community.”
 
Candelario-Santana and his co-defendant David Oquendo-Rivas were convicted by a federal jury on March 8, 2013.  Candelario-Santana was convicted of 28 counts of committing violent crimes in aid of racketeering activity, one count of racketeering conspiracy, nine counts of using a firearm in relation to a crime of violence, one count of conspiracy to possess with intent to distribute a controlled substance and one count of possessing a firearm as a convicted felon. Oquendo-Rivas was convicted of 28 counts of committing violent crimes in aid of racketeering activity and nine counts of using a firearm in relation to a crime of violence.  These offenses occurred on Oct. 17, 2009, in what became known as the “La Tómbola Massacre.” 
 
Based on the government’s charging documents, only Candelario-Santana was potentially eligible for the death penalty.  On March 23, 2013, the same jury that determined the guilt of Candelario-Santana and Oquendo-Rivas was unable to reach a unanimous verdict on the question of whether Candelario-Santana should be sentenced to death or life in prison.  As a result, under the Federal Death Penalty Act, Candelario-Santana was required to be sentenced to life in prison.  
 
According to the evidence presented at trial, from approximately 1993 through 2003, Candelario-Santana was a leader of the drug trafficking organization that operated principally in Sabana Seca, Toa Baja, Puerto Rico.  The organization purchased drugs in bulk, processed and packaged the drugs, and sold them at Sabana Seca through numerous sellers, runners and enforcers under Candelario-Santana’s control.  The organization sold crack, cocaine, heroin and marijuana, and members of the organization routinely possessed firearms to protect its drug points.  In addition, the evidence introduced at trial established that, between 1995 and 2001, Candelario-Santana either personally killed, or ordered others to kill, 13 individuals whom he viewed as threats to his drug trafficking organization or as being disloyal members of the drug trafficking organization.
 
In approximately 2002, Candelario-Santana was arrested and charged in the Commonwealth of Puerto Rico with numerous murders.  Candelario-Santana was eventually convicted of 12 murders in the local courts, and was sentenced to a total of 12 years in prison.  Sometime after Candelario-Santana’s arrest, co-defendant Carmelo Rondón-Feliciano took charge of the day-to-day operations of the organization, but Candelario-Santana continued to direct the organization from prison until approximately 2006, when he was marginalized by co-conspirator Wilfredo Semprit-Santana and Rondón-Feliciano.  According to evidence presented at trial, Candelario-Santana was infuriated at being removed from power within the drug trafficking organization.
 
On Sept. 25, 2006, Rondón-Feliciano was arrested and charged in the District of Puerto Rico with federal drug trafficking crimes, for which he was eventually convicted.  These charges stemmed, in part, from Rondón-Feliciano’s distribution of narcotics in Sabana Seca.  After Rondón-Feliciano’s arrest, co-conspirator Semprit-Santana took charge of the organization.

In February 2009, Candelario-Santana was released from prison.
 
On Oct. 17, 2009, Semprit-Santana held the grand opening of a nightclub he had rented and refurbished called La Tómbola, located in Toa Baja, Puerto Rico, complete with a popular live band and a festive Paso Fino horse parade, known as a “cabalgata.”  The event was heavily attended, with families congregating inside and outside the establishment, most of whom had nothing to do with the drug trafficking organization and merely resided in the general area.  At approximately 11:50 p.m., Candelario-Santana, co-defendant David Oquendo-Rivas, and others, all of whom were heavily armed, drove to La Tómbola.  When they arrived, they immediately opened fire indiscriminately on all the patrons located outside, many of whom were women, children and elderly people.  Candelario-Santana and Oquendo-Rivas stormed into the La Tómbola, and Candelario-Santana was heard to yell, “no one gets out alive,” as they opened fire on the people inside. 
 
In all, eight people and an 8-month unborn child were killed as a result of the gunfire at La Tómbola, and 19 other victims were shot and injured.  The individuals killed included Candelario-Santana’s godson, Rondón-Feliciano’s stepson, and Candelario-Santana’s cousin.  The evidence introduced at trial demonstrated that 335 expended shell-casings were recovered from the La Tómbola crime scene.  The ballistics evidence established that three AK-47-type assault rifles, one AR-15-type assault rifle, eight .9 mm semi-automatic pistols, three 40-caliber semi-automatic pistols, and two 45-caliber semi-automatic pistols were used in the attack.
 
 Oquendo-Rivas is scheduled for sentencing on Sept. 20, 2013.

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

Tammy Dickinson, U.S. Attorney for the Western District of Missouri, and Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division of the U.S. Department of Justice, announced that an Independence, Mo., man and woman pleaded guilty in federal court today to violating the civil rights of an African-American family by setting fire to their residence.

Logan J. Smith, 25, and Victoria A. Cheek-Herrera, 34, both of Independence, pleaded guilty before U.S. District Judge Brian C. Wimes to one count of conspiring to threaten and intimidate an Independence family from exercising their constitutional right to reside in their home because of their race or color and one count of a civil rights violation for committing a racially-motivated arson.  Smith waived his right to a grand jury indictment and pleaded guilty to a two-count information, whereas Cheek-Herrera pleaded guilty to two of three counts charged in an indictment returned by the grand jury on May 23, 2013.

By pleading guilty, Smith and Cheek-Herrera admitted that on June 26, 2008, they conspired to injure, oppress, threaten and intimidate an African-American couple and their minor children in the free exercise of their constitutional rights to occupy and rent their home in Independence, because of their race and color. 

According to the plea agreements, Smith and Cheek-Herrera discussed their desire to set fire to the home of the couple, and they drew a swastika and wrote the words “White Power” on the driveway.  Smith and Cheek-Herrera asked a juvenile acquaintance for gasoline and then created a Molotov cocktail by filling a glass bottle with gasoline and inserting a rag into the bottle to serve as a wick.  Smith and Cheek-Herrera then lit the wick and threw the gasoline-filled bottle into the side of the house that the couple was renting and set the residence on fire.

Smith and Cheek-Herrera each face a statutory maximum penalty of 10 years in prison and a fine of $250,000 for one count of conspiracy against rights and a statutory maximum penalty of 10 years in prison and a fine of $250,000 for one count of interference with housing rights.

This case was investigated by the FBI and is being prosecuted by First Assistant U.S. Attorney David M. Ketchmark and Trial Attorney Shan Patel of the Civil Rights Division of the U.S. Department of Justice. 

Attorney General Eric Holder announced today that the Justice Department’s Bureau of Justice Assistance (BJA) will provide $2.5 million in funding to the Connecticut State Police, the Newtown, Conn., Police Department and their partner agencies that provided assistance in response to the shootings at Sandy Hook Elementary School last year.   The funding compensates the agencies and jurisdictions for costs related to overtime, forensics and security during and in the aftermath of the crime. 

 “Providing support to the law enforcement agencies that responded to the horrific scene that awaited them at Sandy Hook Elementary School is one small action we can take to bring healing to a community that’s been devastated,” said Attorney General Holder.  “Just over eight months after this senseless tragedy, those who lost their lives, and those who continue to grieve, remain in our thoughts and prayers.”

The funding is made available through BJA’s FY 2013 Edward Byrne Justice Assistance Grant Program and is scheduled for distribution as follows:       

Connecticut State Police  $663,444                                                                                             
Town of Newtown    $602,293   
Town of Monroe   $882,812                                        
Partner Agencies*   $296,836   

* Connecticut jurisdictions of Avon, Bethel, Bloomfield, Bridgeport, Brookfield, Clinton, Coventry, Danbury, Darien, Easton, Fairfield, Glastonbury, Groton, Meriden, Middletown, New Britain, Newington, New Canaan, New Milford, Norwalk, Orange, Plainville, Redding, Ridgefield, Seymour, Shelton, Southington, Stratford, Trumball, Waterbury, Watertown, Wilton, Weston and Wolcott.

“This critical funding will compensate the Connecticut State Police and Newtown Police Department for their tireless work investigating this crime, as well as more than two dozen police departments from across the state whose officers responded to Newtown within minutes of this horrific act and, for months, helped to provide security and comfort to a courageous community,” said Acting U.S. Attorney for the District of Connecticut Deirdre M. Daly. 

The Bureau of Justice Assistance is one of six components of the Office of Justice Programs (OJP) which is headed by Assistant Attorney General Karol V. Mason.  OJP provides federal leadership in developing the nation's capacity to prevent and control crime, administer justice and assist victims.  OJP’s six components include: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking.

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

Three defendants who previously pleaded guilty in connection with an immigration services fraud scheme were sentenced in federal court, the Justice Department announced today.  The three defendants formerly worked at Immigration Forms and Publications (IFP), a Sedalia, Mo., company that falsely represented to consumers that IFP was affiliated with the federal government and sales representatives were immigration agents, fees paid to IFP covered government filing fees for immigration documents and that IFP could speed up application processing.  All three defendants pleaded guilty to mail and wire fraud charges in August 2012.

U. S. District Judge Brian C. Wimes of the Western District of Missouri sentenced Thomas Laurence, 31, to 130 months in prison; Thomas Strawbridge, 50, to 82 months in prison and Elizabeth Meredith, 25, to a year and a day in prison.  In sentencing the defendants, the court found that they caused customers to lose a total of more than $400,000.  In addition to prison time, the court ordered the three defendants to pay a total of $613,969 in restitution to victims.  

“Immigrants who come to this country and  try to play by the rules deserve fair treatment under the law – not to be bilked out of their hard-earned savings by those looking for a quick buck,” said Stuart F. Delery, Assistant Attorney General of the Justice Department’s Civil Division.  “We are pleased to have worked with our law enforcement partners to bring to justice the leaders of this fraudulent operation.”

"This company exploited more than a thousand law-abiding immigrants by selling them government forms that anyone can obtain for free," said U.S. Attorney for the Western District of Missouri Tammy Dickinson.  "They preyed on legal immigrants who were doing their best to follow the law, and they are being held accountable for their fraud and deceit."

According to court documents, Strawbridge founded and owned IFP, which operated in 2009 and 2010.  The IFP representatives falsely represented to consumers that IFP handled excess call volume for U.S. Citizenship and Immigration Services (USCIS).  The company also sold immigration forms, which are generally available at no charge from the government, to immigrants using fraudulent means.  The representatives falsely told consumers that the company employed paralegals who would help customers correctly fill out the immigration forms, and that forms purchased through IFP would be processed more quickly than if consumers dealt directly with USCIS. 

 The IFP representatives also falsely told consumers that fees paid to IFP included government processing fees.  However, the IFP employees concealed the fact that the government routinely charged processing fees that IFP customers would be required to pay in addition to IFP charges.  They also concealed that a high percentage of IFP customers had complained to the company and requested refunds when they discovered that payments to IFP did not include government processing fees and that IFP sales representatives had no particular expertise in immigration matters. 

  The case was prosecuted by Trial Attorneys Alan Phelps and Adrienne Fowler of the Justice Department’s Consumer Protection Branch, Civil Division and Tony Gonzalez, Assistant U.S. Attorney for the Western District of Missouri.  It was investigated by the FBI, the U.S. Postal Inspection Service, the Missouri Secretary of State’s Corporate Division and Securities Division and the Missouri Attorney General’s Office.  The Federal Trade Commission also provided important assistance.

For information on avoiding immigration services fraud, go to the U.S. Citizenship and Immigration Services website: www.uscis.gov/avoidscams.

A Pennsylvania man pleaded guilty today to charges stemming from his participation in a scheme to hack into computer networks and sell access to those networks.

The guilty plea was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Carmen M. Ortiz of the District of Massachusetts.

Andrew James Miller, 23, of Devon, Penn., pleaded guilty before U.S. District Judge Mark Wolf in the District of Massachusetts to one count of conspiracy and two counts of computer intrusion.

According to court documents, from 2008 to 2011, Miller remotely hacked into a variety of computers located in Massachusetts and elsewhere, and, in some instances, surreptitiously installed “backdoors” into those computers.  These “backdoors” were designed to provide future administrator-level, or “root,” access to the compromised computers.  According to court documents, Miller obtained log-in credentials to the compromised computers.  He and his co-conspirators then sold access to these backdoors, as well as other log-in credentials.  The access sold by Miller and his co-conspirators allowed unauthorized people to access various commercial, education and government computer networks.

Judge Wolf scheduled sentencing for Nov. 19, 2013.  The maximum penalty for the conspiracy count is five years in prison.  One of the computer intrusion counts carries a maximum penalty of five years in prison and the other, involving intentional damage to a protected computer, carries a maximum penalty of 10 years in prison.

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

New York-based Imagimed LLC, the company’s former owners, William B. Wolf III and Dr. Timothy J. Greenan, and the company’s former chief radiologist, Dr. Steven Winter, will pay $3.57 million to resolve allegations that they submitted to federal healthcare programs false claims for magnetic resonance imaging (MRI) services, the Justice Department announced today.  Imagimed owns and operates fifteen MRI facilities, located primarily in New York state, under the name “Open MRI.”

 Allegedly, from July 1, 2001, through April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims to Medicare, Medicaid and TRICARE for MRI scans performed with a contrast dye without the direct supervision of a qualified physician.  Since a potential adverse side effect of contrast dye is anaphylactic shock, federal regulations require that a physician supervise the administration of contrast dye when it is used for an MRI.  Also, allegedly, from July 1, 2005, to April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims for services referred to Imagimed by physicians with whom Imagimed had improper financial relationships.  In exchange for these referrals, Imagimed entered into sham on-call arrangements, provided pre-authorization services without charge and provided various gifts to certain referring physicians, in violation of the Stark Law and the Anti-Kickback Statute.

 “The Department of Justice is committed to guarding against abuse of federal healthcare programs,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “We will help protect patients’ health by ensuring doctors who submit claims to federal healthcare programs follow proper safety precautions at all times.”

U.S. Attorney for the Northern District of New York, Richard S. Hartunian said: “This case is an example of our commitment to using all of the remedies available, including civil actions under the False Claims Act, to ensure patient safety and combat health care fraud.  Stripping away the profit motive for circumventing physician supervision requirements has both a remedial and a deterrent effect.  The settlement announced today advances our critical interest in both the integrity of our health care system and the safe delivery of medical services.”

The allegations resolved by the settlement were brought in a lawsuit filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery.  The whistleblower in this case, Dr. Patrick Lynch, was a local radiologist and will receive $565,500.

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 investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of New York; the Justice Department’s Civil Division, Commercial Litigation Branch and the Department of Health and Human Services’ Office of Inspector General.

The case is United States of America ex rel. Lynch v. Imagimed LLC, et al. (N.D. N.Y.).  The claims released by the settlement are allegations only, and there has been no determination of liability.

Tennie White, the owner and operator of an environmental laboratory located in Jackson, Miss., was sentenced in federal court late yesterday to 40 months in prison in connection with her conviction for faking laboratory testing results and lying to federal investigators, announced Gregory K. Davis, U.S. Attorney for the Southern District of Mississippi, and Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.

White also was sentenced to three years of supervised release to follow her prison sentence and was ordered to pay a $1,000 fine and a $100 special assessment.  White was sentenced by U.S. District Judge Henry T. Wingate at the federal courthouse in Jackson, where he also presided over the May 2013 trial of the case.

“Independent laboratories play a critical role in assisting businesses to accurately monitor and report discharges of industrial pollutants that may adversely affect the environment,” said Acting Assistant Attorney General Dreher.  “Businesses cannot fulfill this important responsibility if these laboratories are not honest brokers and falsify test results and monitoring reports.  This prosecution shows that fraudulent testing and reporting by laboratories will not be tolerated.”

“Americans expect their public water supply to be clean and safe to use,” said Maureen O’Mara, Special Agent in Charge of the Environmental Protection Agency’s criminal enforcement program in Mississippi.  “In order to safeguard public health it is absolutely essential that governments receive accurate test results and measurements.  This case demonstrates that individuals who falsify environmental records and try to mislead the government will be prosecuted and held accountable.”

White, owner, operator and manager of Mississippi Environmental Analytical Laboratories Inc., was found guilty in May 2013 of two false statement counts and one count of obstructing proceedings.  Evidence at trial established that White was hired to perform laboratory testing of a manufacturer’s industrial process waste water samples and then to use those results to complete monthly discharge monitoring reports for submission to the Mississippi Department of Environmental Quality.  However, for the months October  to December 2008, White created discharge monitoring reports (DMRs) that falsely represented that laboratory testing had been performed on samples when, in fact, such testing had not been done.  White further created a fictitious laboratory report and presented it to her client for use in preparing another DMR for January 2009.  White made false statements to a federal agent during a subsequent criminal investigation. 

The case was prosecuted by Trial Attorney Richard J. Powers of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, and Assistant U.S. Attorney Gaines Cleveland of the U.S. Attorney’s Office for the Southern District of Mississippi.

The United States has requested the federal district court in Charleston, S.C. to permanently bar Jessica Geddis of Summerville, S.C., from preparing federal income tax returns for others, the Justice Department announced today. 

According to the complaint, Geddis prepared federal income tax returns from her home and as a tax preparer at MBM Tax and Accounting Services LLC.  The complaint alleges that Geddis prepared returns for herself and others that overstate income by reporting fictitious household help income.  Geddis overstated her customers’ income in order to increase the amount of her customers’ refundable tax credits, including the Earned Income Tax Credit, Child Tax Credit and Making Work Pay Credit. 

The complaint further alleges that Geddis directed the Internal Revenue Service (IRS) to deposit all, or a portion of, her customers’ overstated refunds into bank accounts that she controls.  According to the complaint, the IRS  has reviewed Geddis’ bank records and determined that she has received at least 148 fraudulent tax refunds totaling $281,678 between January 2008 and May 2012.

In the past ten years 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.

Related Materials:

United States v. Jessica A. Geddis
Complaint for Permanent Injunction and Other Relief

The Justice Department announced today that Jerry L. Wilson, a Mt. Washington, Ky., landlord has agreed to pay $22,000 to resolve allegations that he violated the Fair Housing Act by discriminating against African-American apartment seekers and making statements indicating a preference for families without children for certain available apartments. 

The lawsuit, filed in the U.S. District Court for the Western District of Kentucky, charges that Wilson and EME LLC, misrepresented the availability of, and refused to negotiate for the rental of, apartments at Treva Court Apartments based on race or color.  The lawsuit also alleges that Mr. Wilson made statements indicating a preference for families without children to rent second floor apartments at the complex he operates, located at 272 Treva Court in Mt. Washington.  The allegations are based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.

The consent decree resolving this matter, which is subject to approval by the U.S. District Court, imposes a $22,000 civil penalty against Wilson and EME, LLC.   In addition, the consent decree enjoins the defendants from further acts of discrimination and requires Wilson to undergo fair housing training.

“Housing discrimination based on race and against families with children remains a persistent problem.” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.  “The Justice Department will continue its vigorous enforcement of fair housing laws that protect the rights of individuals and families to live where they choose free from discrimination.”

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt .

Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels and U.S. Attorney for the District of North Dakota Timothy Q. Purdon announced that Dominique Jason Flanigan was arraigned today on civil rights and threats charges.

Flanigan was indicted under seal by a grand jury on Dec. 12, 2012, for threatening a synagogue in Fargo, N.D. The two-count indictment charges Flanigan with issuing a threatening interstate communication and with interfering with a federally protected activity. The indictment was unsealed prior to his arraignment.

The indictment alleges that, on Jan. 4, 2011, Flanigan called Temple Beth El in Fargo, and left a voice mail message threatening the employees of the synagogue. The indictment charges that this threat intimidated and interfered with Temple Beth El employees because of their religion.

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

This case is being investigated by the FBI and is being prosecuted by Assistant U.S. Attorneys Lynn C. Jordheim and Megan A. Healy of the U.S. Attorney’s Office for the District of North Dakota and Trial Attorney Dana Mulhauser of the Criminal Section of the Civil Rights Division.

The government filed suit in the U.S. District Court for South Dakota against Dakota Laboratories LLC and its owner, Charles L. Voellinger, Sr., to block them from violating the Food, Drug and Cosmetic Act (FDCA) in connection with their alleged violations of Current Good Manufacturing Practices (CGMP).  The alleged violations concerned problems with the manufacture of eye drops that may have caused the products to be non-sterile.  The Justice Department filed the suit on behalf of the Food and Drug Administration (FDA).

“Consumers must be able to trust that drugs presented as sterile are, in fact, sterile,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “We cannot take the chance that a manufacturer’s failure to establish proper controls for sterile drug production could result in products becoming contaminated, placing consumers at risk of infection and potentially serious injury.”

In conjunction with the filing of the complaint, Dakota Laboratories agreed to settle the litigation and be bound by a Consent Decree of Permanent Injunction that prohibits them from committing violations of the FDCA.  The consent decree also acknowledges that Dakota Laboratories is no longer in operation, and requires that if they wish to resume manufacturing drug products in the future, the FDA first must determine that Dakota Laboratories’ manufacturing practices have come into compliance with the law.  The proposed consent decree, along with the complaint, has been filed with the court and is awaiting judicial approval.

The government’s action resulted from a series of inspections of Dakota Laboratories’ Mitchell, S. D., manufacturing facility, which revealed that Dakota Laboratories failed to establish and implement appropriate procedures for preventing microbiological contamination of drug products.  They allegedly lacked sufficient control over the environment in their sterile processing area to prevent products from becoming contaminated and failed to establish and implement appropriate laboratory procedures for determining whether batches of eye drops conformed to their safety specifications.

Compliance with CGMP requirements ensures that drugs meet the safety requirements of the law and have the identity, strength, quality and purity that the drugs purport to possess.  FDA regulations, which establish the minimum CGMP requirements applicable to human drugs, require manufacturers to control all aspects of the processes and procedures by which drugs are manufactured to prevent the production of unsafe and ineffective products.

After the inspections of Dakota Laboratories in 2010 and 2011, FDA warned them that their conduct violated the FDCA.  In 2012, a third FDA inspection documented the continuing nature of Dakota Laboratories’ CGMP violations.  Consequently, the government filed its complaint and settled with Dakota Laboratories.

The complaint was filed by the Department of Justice’s Consumer Protection Branch, Civil Division; the U.S. Attorney’s Office for the District of South Dakota and FDA’s Office of the General Counsel.  A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.

The Justice Department and the Internal Revenue Service (IRS) announced that today Douglas R. Madsen, a former chiropractor from Ephraim, Utah, was sentenced by the U.S. District Judge Clark Waddoups to 33 months in prison and resitutition of over $500,000 following a conviction for attempted evasion of payment of income tax in the District of Utah.

On Jan. 12, 2012, a jury convicted Madsen of one count of tax evasion. According to court documents, Madsen owed approximately $1.3 million in assessed income tax, interest and penalties for the years 1995 and 1999 to 2004. Madsen’s tax debt had grown, by the trial date, to over $1.7 million, after accrued interest.

The evidence presented at trial established that Madsen used nominee trusts to conceal the ownership of numerous acres of property, ultimately causing the transfer of that property to Grand Scale Inc., a Washington state corporation of which he was the president, vice president, secretary, treasurer and chairman of the board. In addition, the evidence showed that Madsen used other entities to encumber property and cloud equity in that property through use of mortgages and Uniform Commercial Code financing statements. Madsen was previously held in civil contempt by the U.S. District Court for the District of Utah for failure to comply with court orders with respect to an IRS summons.

Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally commended the efforts of Tax Division Trial Attorneys Jennifer R. Laraia and Leslie A. Goemaat, who prosecuted the case, and special agents of IRS – Criminal Investigation, who investigated the case.

A former owner of a Los Angeles-area medical equipment supply company pleaded guilty today to a $2.6 million Medicare fraud scheme.

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

Akinola Afolabi, 54, of Long Beach, Calif., pleaded guilty before U.S. District Judge Philip S. Gutierrez in the Central District of California to one count of health care fraud.

According to court documents, Afolabi was the owner and president of Emmanuel Medical Supply, a durable medical equipment (DME) supply company located in Long Beach.  Afolabi admitted that from approximately June 2006 through September 2009, he engaged in a scheme to commit health care fraud through the operation of Emmanuel by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and by submitting false and fraudulent claims to Medicare.  Afolabi admitted that he obtained Medicare beneficiary information through various means, including “marketers,” whom he paid to refer Medicare beneficiaries to Emmanuel for the purpose of using that information to submit, and cause the submission of, false and fraudulent claims to Medicare on behalf of Emmanuel.  Afolabi admitted knowing that the prescriptions and medical documents were fraudulent and that some of the beneficiaries did not receive the DME, yet he certified to Medicare with the submission of each claim that the DME was received and was medically necessary. 

From approximately June 7, 2006, through Sept. 28, 2009, Afolabi, through Emmanuel, submitted approximately $2,668,384 in fraudulent claims to Medicare for power wheelchairs and related services, and Medicare paid Emmanuel approximately $1,490,532 on those claims.

At sentencing, scheduled for Nov. 25, 2013, Afolabi faces a maximum penalty of 10 years in prison and a $250,000 fine.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Trial Attorney Fred Medick of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & 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.

Antoine Green, a former U.S. Postal Service (USPS) employee, pleaded guilty today in U.S. District Court for the Middle District of Alabama to crimes related to his involvement in a stolen identity tax refund fraud scheme, the Justice Department announced.

According to court documents, between November 2011 and October 2012, Green, who was employed as a postal carrier with the USPS in Montgomery, Ala., stole at least 61 U.S. Treasury tax refund checks from his mail route.  The checks, which totaled approximately $145,952, were issued by the Internal Revenue Service (IRS) in connection with fraudulent tax returns filed in the names of identity theft victims.

  For his involvement in the scheme, Green pleaded guilty to one count of theft of government money and one count of theft of mail by a postal employee.  He faces a maximum potential sentence of 15 years in prison and a fine of up to $500,000.

Trial Attorneys Chad Edgar and Michael Boteler of the Justice Department’s Tax Division prosecuted the case.  Special Agents of IRS - Criminal Investigation and USPS Office of Inspector General conducted the investigation.

Related Materials:

United States v. Antoine Green
Plea Agreement
Information

The Justice Department announced that yesterday a federal court in Ft. Worth, Texas permanently barred Karena Mondrianh, of Southlake, Texas, from preparing tax returns and from operating a tax-preparation business.  Mondrianh consented to entry of the preliminary injunctions without admitting the allegations against her.

In its complaint, the government alleged that Mondrianh prepared fraudulent tax returns understating customers’ income by inventing – sometimes without customers’ knowledge – false business expenses and by falsely claiming that customers’ income was exempt from tax.   According to the complaint most of Mondrianh’s customers work overseas for defense contractors. The permanent injunction order was signed by Judge John H. McBryde of the U.S. District Court for the Northern District of Texas.

The complaint further alleged that Mondrianh provided false information to the Internal Revenue Service (IRS) in improper attempts to delay IRS audits of customers.  She also allegedly urged a customer to lie to an IRS agent in order to forestall an IRS audit.  For more information about this complaint visit www.justice.gov/tax/2013/txdv13690.htm .

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

Big West Oil LLC has agreed to pay a $175,000 penalty and to spend approximately $18 million to install emission controls at its refinery in North Salt Lake, Utah, announced the Department of Justice and the U.S. Environmental Protection Agency (EPA) today.  Big West Oil will also invest $253,000 to improve the monitoring and management of potential releases of hydrofluoric acid at the facility.

Today’s agreement resolves alleged violations of key provisions of the Clean Air Act at the refinery, including requirements associated with the Prevention of Significant Deterioration and New Source Performance Standards. 

When fully implemented, the controls and requirements under the agreement will reduce emissions of sulfur dioxide (SO2) by approximately 158 tons per year (tpy), nitrogen oxides (NOx) by approximately 32 tpy, and particulate matter (PM) by approximately 36 tpy.  Additional reductions of volatile and hazardous pollutants, such as benzene, are expected as a result of compliance with leak detection and repair requirements.

Sulfur dioxide and nitrogen oxides contribute to ground-level ozone, acid rain and the degradation of terrestrial and aquatic ecosystems and can also irritate the lungs and contribute to respiratory illnesses.  Fine particle pollution contains microscopic solids and liquid droplets that can penetrate deep into the lungs and cause significant lung and heart damage. 

“This settlement will result in substantial reductions in harmful air pollution and, building on previous settlements with area refineries, marks another step forward in improving the quality of air Utahns breathe in the Salt Lake City area,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “Big West Oil will be required to install advanced technology pollution controls that will benefit the health and environment of its neighbors and future generations.”

“EPA continues to secure significant settlements with refineries that benefit public health and improve air quality in our communities,” said EPA Regional Administrator Shaun McGrath.  “Today’s agreement will help bring Big West Oil’s refinery up to date with industry standards to protect the environment.”

Today’s settlement requires Big West Oil to install a state-of-the-art flue gas filter system to control emissions of PM and to place ultra-low NOx burners on four heaters and boilers.  The company will also undertake measures to reduce SO2 emissions from the refinery by, among other things, restricting hydrogen sulfide (H2S) in fuel gas and installing and operating a caustic scrubber system at the sulfur recovery plant.

Additionally, Big West Oil has agreed to make numerous upgrades to its leak detection and repair program, including the installation of low-leaking valves, and to enhance its waste operations to minimize or eliminate fugitive benzene emissions.  The cost of the measures to be taken by the refinery is estimated at $18 million.

In addition, the company will spend $253,000 on a supplemental environmental project to install a laser detection system around the perimeter of the Hydrofluoric Acid Alkylation Unit that will improve the detection and response to releases of potentially hazardous acid.  This system will reduce emissions and enhance safety for refinery workers and nearby communities.

The reduction in pollutants will benefit communities near the refinery, which include significant minority and low-income populations.  The refinery is also located in an area designated as nonattainment for the federal 24-hour standard for fine particles (PM2.5).

Under the PSD permitting requirements, certain large industrial facilities making modifications that increase air pollutant emissions are required to install state-of-the-art air pollution controls.  EPA investigations in various industries, including petroleum refining, reveal that many facilities fail to install pollution controls after modifications, causing them to emit pollutants that can impact air quality and public health.  The Clean Air Act’s New Source Performance Standards require additional control measures at refineries.  Enforcing these requirements reduces air pollution and ensures that facilities that are complying with the requirements are not at a competitive disadvantage.

Since March 2000, the EPA has entered into 31 settlements with companies that refine greater than 90 percent of the domestic petroleum refining capacity.  These settlements cover 107 refineries in 32 states and territories.  Once the settlements are fully implemented, the companies will have reduced emissions of NOx, SO2, and other pollutants by more than 360,000 tons per year.  The settling refiners have invested or will invest more than $6.5 billion in new pollution control technologies and have paid more than $93 million in penalties.  In addition, the settlements reached to date account for more than $80 million in supplemental environmental projects.
 
The consent decree was lodged in U.S. District Court for the District of Utah.  A copy of the consent decree is available on the Department of Justice website at: www.justice.gov/enrd/Consent_Decrees.html.

For more information on the Clean Air Act: www.epa.gov/air/caa/.

An indictment was unsealed today charging nine people in a loan sharking and illegal gambling ring allegedly run out of several Philadelphia businesses.

The charges were announced today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division. 

Ylli Gjeli, 48, Fatimir Mustafaraj, 41, George Markakis, 43, Gezim Asllani, 34, Rezart Rahmi Telushi, 40, Eneo Jahaj, 26, and Ardit Pone, 35, all of Philadelphia; Erion Murataj, 35, of Huntingdon Valley, Penn.; and Brian Jackson, 35, of Harleysville, Penn., were arrested this morning.  The defendants are named in an indictment charging racketeering conspiracy, racketeering collection of unlawful debt, making extortionate extensions of credit, collections of extensions of credit by extortionate means, operating an illegal gambling business and possession of a firearm in furtherance of a crime of violence.

“The indictment unsealed today charges nine defendants with operating a criminal enterprise built on illegal gambling and a violent extortion racket,” said Acting Assistant Attorney General Raman.  “The Justice Department will not stand by as criminal organizations victimize our communities.  Today’s charges demonstrate our ongoing commitment to working alongside our federal, state and local counterparts to root out organized crime.”

“The indictment charges the defendants with running a violent loan sharking and gambling enterprise, using intimidation, threats and actual violence as part of their illegal business,” said U.S. Attorney Memeger.  “We will not tolerate this type of criminal activity that preys upon financial weakness and threatens the physical safety of the individuals in debt and their innocent family members.”
           
“The defendants allegedly victimized people twice over,” said FBI Special Agent in Charge Hanko.  “They provided loans at outrageous interest rates to those unable to obtain loans from traditional sources and then used threats and violence to collect on those illegal loans.  Today's arrests demonstrate the FBI’s continued commitment to ridding Philadelphia of organized crime, wherever we find it.”

“Individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable,” said Special Agent in Charge of Internal Revenue Service-Criminal Investigation (IRS-CI) Akeia Conner.  “IRS Criminal Investigation is committed to ‘following the money trail’ to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice.”

According to the indictment, the defendants and their associates used businesses located in Philadelphia – including the Lion Bar, Blackbird Café, “Ylli’s 2 Brothers,” First England Pizza and various coffee shops, among others – to conduct the enterprise’s loan sharking activities and illegal gambling business.  The defendants allegedly generated money by making and collecting on loans with usurious rates of interest; using intimidation, threats and violence to make and collect on loans; and making loans to betting customers whose debts were incurred through the enterprise’s illegal gambling business. 

Members and associates of the enterprise allegedly cultivated their reputation for violence by threatening customers with dangerous weapons such as a firearm or hatchet; using implied threats and intimidation; telling customers that if they did not pay their debts someone would kill them, break their legs or physically harm them or their family members in some other way; and physically assaulting subordinate members and associates.  For example, the indictment alleges that Gjeli asked a customer why he had come to the basement of the Lion Bar.  He then grabbed a hatchet with one hand, grabbed the customer’s arm with the other hand and slammed the hatchet onto the table right after the customer pulled his hand away.  It is further alleged that defendant Gjeli placed a gun to the same customer’s head and threatened him. 

 It is further alleged that the defendants attempted to conceal the existence and operations of the enterprise from law enforcement by: limiting their discussions of criminal activities when on the phone, using cryptic and coded language to describe criminal activities, such as “pizza” to describe a loan; conducting pat-downs and body searches of customers to check for weapons and recording devices; and conducting the enterprise’s transactions primarily in cash.

According to the indictment, Gjeli was a leader and “boss” of the organization; Mustafaraj, aka “Tony,” was a leader and “muscle.”  Both allegedly directed other members in the loan sharking activities and illegal gambling business, approved loans, used intimidation and threats of violence against customers, collected weekly loan payments, physically assaulted subordinate members and their associates, supervised the illegal gambling business, provided cash to pay customer’s gambling wins and otherwise financed the gambling business, collected gambling debts and made loans to customers whose debts were incurred through the illegal gambling business.  Markakis, aka “George the Greek” and “Fat George,” was allegedly a leader of the enterprise who directed other members in the illegal gambling business.  Murataj, aka “Ben” and “Paul,” and Asllani, aka “Sam,” were allegedly “collectors” who assisted Gjeli and Mustafaraj in making loans and regularly collected weekly loan payments from customers.  Telushi, aka “Luigi,” was allegedly a “collector” who regularly collected weekly loan payments from customers.  Jahaj, aka “Nimo,” Jackson, aka “Mark,” and Pone were allegedly “bookies” who operated parts of the illegal gambling business and regularly collected gambling debts.  Jahaj and Jackson also allegedly set up and administered online accounts to facilitate customer betting and used the enterprise’s loan sharking activities to convert the gambling debts to loans.

If convicted of all charges, Gjeli and Mustafaraj face a maximum sentence of life in prison.  The remaining defendants each face a maximum sentence of 20 years in prison.

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

The case was investigated by the FBI, IRS-CI, U.S. Immigration and Customs Enforcement (ICE) – Homeland Security Investigations (HSI), Pennsylvania State Police, Montgomery County, Penn., Detectives and the New Jersey State Police.  It is being prosecuted by Assistant U.S. Attorney Salvatore L. Astolfi and Trial Attorney Jerome Maiatico of the Criminal Division’s Organized Crime and Gang Section.

Related Materials:

Indictment

ATI Enterprises Inc. will pay the government $3.7 million to resolve False Claims Act allegations that it falsely certified compliance with federal student aid programs’ eligibility requirements and submitted claims for ineligible students, the Justice Department announced today.

“Federal financial aid is meant to help students obtain a quality education from an eligible institution, and the Department of Justice is committed to ensuring colleges comply with the rules to make certain that happens,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.

Allegedly, ATI Enterprises knowingly misrepresented to the Texas Workforce Commission and to the Accrediting Commission of Career Schools and Colleges its job placement statistics to maintain its state licensure and accreditation.  To participate in federal student aid programs, as authorized by Title IV of the Higher Education Act of 1965, as amended (Title IV), schools must enter into a contract with the Secretary of Education called a Program Participation Agreement, in which they agree to a number of terms. For example, if an institution advertises its job placement rates as a means of attracting students to enroll, it must make available to prospective students its most recent and accurate employment statistics to substantiate the truthfulness of its advertisements.  The government alleged that, by misrepresenting its job placement statistics, ATI Enterprises fraudulently maintained its eligibility for federal financial aid under Title IV.

The government further alleged that ATI employees engaged in fraudulent practices to induce students to enroll and maintain their enrollment in the schools.  This falsely increased the schools’ enrollment numbers, and consequently, the amount of federal dollars they received at the expense of taxpayers and students, who incurred long-term debt.

“Misuses of the federal student aid system must not be tolerated, for the sake of the taxpayers and of the innocent individuals who are seeking a quality education,” said Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas, where some of the ATI campuses involved in the lawsuit are located.

Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida said:  “Federal financial aid is there to help students attain their dreams and goals, and misuse of these funds to increase corporate profits is unacceptable. We are committed to ensuring that federal student aid is used for the benefit of students.”

The settlement amount will be paid from funds supporting three letters of credit that ATI provided to the Department of Education.  In addition to the False Claims Act settlement, the Department of Education will disburse from the letter of credit funds $2 million for student loan refunds in relation to cases students filed against ATI in Texas state courts and other related arbitrations.

“Federal student aid exists so that students can make the dream of a higher education a reality.  That’s why misuse in any way of these vital funds cannot be tolerated,” said Kathleen Tighe, Inspector General of the U.S. Department of Education.  “I’m proud of the work of OIG special agents for holding ATI Enterprises accountable and for protecting the integrity of federal education dollars.”

The settlement resolves allegations made in two separate complaints against ATI Enterprises Inc., and related entities filed under the False Claims Act’s qui tam, or whistleblower, provisions, which permit a private individual to file suit for false claims to the government and to share in any recovery.  The first complaint, U.S. ex rel. Aldridge, et al. v. ATI Enterprises Inc., et al., was filed in July 2009 in the U.S. District Court for the Northern District of Texas.  The second complaint, U.S. ex rel. Ramirez-Damon v. ATI Enterprises Inc., was filed in July 2011 in the U.S. District Court for the Southern District of Florida. 

This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Texas, the U.S. Attorney’s Office for the Southern District of Florida, and the Department of Education’s Office of Inspector General and Office of General Counsel. The claims settled by this agreement are allegations only, and there has been no determination of liability.