District Not Recorded

Attorney General Eric Holder issued the following statement today on the resignation of U.S. Attorney for the Eastern District of Virginia Neil H. MacBride:

“Throughout his tenure as United States Attorney for the Eastern District of Virginia, Neil has worked tirelessly to make a lasting difference for Americans across – and far beyond – his district.

“At every turn, he has exemplified the highest standards of excellence, integrity, and professionalism.  He has distinguished himself as an exceptional leader, a committed public servant, and a brilliant attorney – handling complicated cases with extraordinary skill. 

“Over the many years we have worked together, I’ve always been grateful for Neil’s dedicated service, his personal friendship, and his principled stewardship of our nation’s justice system.  I am certain that his enduring contributions, his many achievements, and his fine example will guide the men and women who serve the Eastern District for years to come.  And I wish him all the best as he takes the next steps in his already remarkable career.”

Attorney General Eric Holder and Secretary of Education Arne Duncan today announced research findings showing that, on average, inmates who participated in correctional education programs had 43 percent lower odds of returning to prison than inmates who did not.  Each year approximately 700,000 individuals leave federal and state prisons; about half of them will be reincarcerated within three years.  The research, funded by the Justice Department’s Bureau of Justice Assistance, was released today by the RAND Corporation.

“These findings reinforce the need to become smarter on crime by expanding proven strategies for keeping our communities safe, and ensuring that those who have paid their debts to society have the chance to become productive citizens,” said Attorney General Holder.  “We have an opportunity and an obligation to use smart methods – and advance innovative new programs – that can improve public safety while reducing costs.  As it stands, too many individuals and communities are harmed, rather than helped, by a criminal justice system that does not serve the American people as well as it should.  This important research is part of our broader effort to change that.”

The findings, from the largest-ever analysis of correctional educational studies, indicate that prison education programs are cost effective.  According to the research, a one dollar investment in prison education translates into reducing incarceration costs by four to five dollars during the first three years after release, when those leaving prison are most likely to return.

“Correctional education programs provide incarcerated individuals with the skills and knowledge essential to their futures,” said Secretary of Education Duncan.  “Investing in these education programs helps released prisoners get back on their feet—and stay on their feet—when they return to communities across the country.”

With funding from The Second Chance Act (P.L. 110-199) of 2007, the RAND Corporation’s analysis of correctional education research found that employment after release was 13 percent higher among prisoners who participated in either academic or vocational education programs than among those who did not.  Those who participated in vocational training were 28 percent more likely to be employed after release from prison than those who did not receive such training.

The report is a collaborative effort of the Departments of Justice and Education, two of 20 federal agencies that make up the federal interagency Reentry Council.  The Reentry Council’s members are working to make communities safer by reducing recidivism and victimization; assisting those who return from prison and jail in becoming contributing members of their communities; and saving taxpayer dollars by lowering the direct and collateral costs of incarceration.  Attorney General Holder chairs the Reentry Council which he established in January 2011.

To view the research, please visit: www.bja.gov/Publications/RAND_Correctional-Education-Meta-Analysis.pdf.
For more information about the federal interagency Reentry Council, please visit:  http://csgjusticecenter.org/nrrc/projects/firc/.

The Department of Justice announced today that it will file a new lawsuit against the State of Texas, the Texas Secretary of State, and the Director of the Texas Department of Public Safety over the State’s strict voter photo identification law (SB 14). The United States’ complaint seeks a declaration that SB 14 violates Section 2 of the Voting Rights Act, as well as the voting guarantees of the Fourteenth and Fifteenth Amendments to the United States Constitution.  

Separately, the Department is filing a motion to intervene as a party and a complaint in intervention against the State of Texas and the Texas Secretary of State in the ongoing case of Perez v. Perry (W.D. Tex.), which concerns the state’s redistricting laws. The United States had already filed a statement of interest in this case last month. Today’s action represents a new step by the Department in this case that will allow the United States to formally present evidence about the purpose and effect of the Texas redistricting plans.

“Today’s action marks another step forward in the Justice Department’s continuing effort to protect the voting rights of all eligible Americans,” said Attorney General Eric Holder. “We will not allow the Supreme Court’s recent decision to be interpreted as open season for states to pursue measures that suppress voting rights.  The Department will take action against jurisdictions that attempt to hinder access to the ballot box, no matter where it occurs.  We will keep fighting aggressively to prevent voter disenfranchisement. We are determined to use all available authorities, including remaining sections of the Voting Rights Act, to guard against discrimination and, where appropriate, to ask federal courts to require preclearance of new voting changes.  This represents the Department’s latest action to protect voting rights, but it will not be our last.”

In the voter ID lawsuit, the United States’ complaint contends that SB 14 was adopted with the purpose, and will have the result, of denying or abridging the right to vote on account of race, color, or membership in a language minority group. The complaint asks the court to prohibit Texas from enforcing the requirements of its law, and also requests that the court order bail-in relief under Section 3 of the Voting Rights Act. If granted, this would subject Texas to a new preclearance requirement.

In the Department’s other filing announced today, the United States seeks a declaration that Texas’s 2011 redistricting plans for the U.S. Congress and the Texas State House of Representatives were adopted with the purpose of denying or abridging the right to vote on account of race, color, or membership in a language minority group in violation of Section 2, as well as the voting guarantees of the Fourteenth and Fifteenth Amendments to the United States Constitution.   The complaint also requests that the court order bail-in pursuant to Section 3(c) of the Voting Rights Act, to remedy persistent, intentional discrimination in voting within the State of Texas.  

“The Department of Justice will use all the tools it has available to ensure that each citizen can cast a ballot free from impermissible discrimination,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.  “The right to the franchise is one of the most fundamental promises of American democracy.”  

If the federal courts in either the redistricting or voter identification cases find that the State of Texas should be covered by Section 3(c), then the State would be required to submit voting changes to the U.S. Attorney General or to the federal court for review prior to implementation to ensure that the changes do not have a discriminatory effect or a discriminatory purpose.  The Department has previously participated as amicus in the Perez case, and last month advised the federal court in Texas that the Department believed the imposition of a new preclearance requirement on Texas under Section 3(c) of the Voting Rights Act was appropriate.  Today’s filing asks the Court to allow the Department to participate as a party in further proceedings on the question of whether Texas should be made subject to Section 3(c).   

A federal court in the District of Columbia has previously held that Texas had failed to meet its burden of proving that its 2011 redistricting plans and its 2011 voter identification law were not discriminatory under Section 5 of the Voting Rights Act.  These decisions were vacated after the Supreme Court’s June decision in Shelby County v. Holder.  The Supreme Court’s decision left unaffected the non-discrimination requirements of Section 2 of the Voting Rights Act, as well as the bail-in provisions of Section 3 of the Voting Rights Act, and today’s filings seek to enforce those important protections.

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

Related Materials:

Texas ID Complaint
Motion to Intervene (Western District of Texas)
Motion to Intervene Exhibit 1

Robert Andres, 62, an investment manager based in Houston, pleaded guilty yesterday in federal court in Salt Lake City for his role in a $72 million investment fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney David B. Barlow for the District of Utah, Special Agent in Charge Mary Rook of the FBI’s Salt Lake City Field Office, and Special Agent in Charge Paul A. Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI) Las Vegas Field Office made the announcement.

Andres pleaded guilty on Aug. 21, 2013, to one count of wire fraud.  He faces a maximum penalty of 20 years in prison and a fine of $250,000 when he is sentenced on Jan. 7, 2014.

According to the indictment and other publicly filed documents, Andres operated Winsome Investment Trust, an investment entity, and served as its sole manager, attorney and trustee.  From October 2005 until at least January 2011, Andres recruited investors for Winsome by misrepresenting Winsome’s assets and asset allocation and the way in which funds were invested.

Between October 2005 and April 2007, Andres raised more than $39 million from Winsome investors by disseminating false and misleading Winsome balance sheets and by representing to investors that Andres would invest all of their funds in a trading program or a mostly automated trading business.

According to publicly filed documents, between April 2007 and January 2011, Andres used false and misleading information to raise an additional $32 million from new investors.  Furthermore, Andres failed to disclose that new investors’ funds would be used to pay earlier investors.  In addition, Andres used new investor funds to make purported “profit” payments to earlier investors to create the false impression that Winsome was profitable.  During this period, Andres misappropriated approximately $2.2 million in investor proceeds for personal use, including hotel bills and living expenses.

This case was investigated by the FBI’s Salt Lake City Field Office and IRS-CI Las Vegas Field Office.  The department thanks the Commodity Futures Trading Commission and the Securities and Exchange Commission for their assistance in the investigation.  The case is being prosecuted by Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jason R. Burt and Mark Y. Hirata for the District of Utah.  

A Miami title agent and former mortgage broker was sentenced today for her role in a reverse mortgage loan 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, and Special Agent in Charge Lester Fernandez of the U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG) made the announcement after sentencing by Senior Judge Richard W. Goldberg, sitting by designation in the Southern District of Florida.

Yesenia Pouparina, aka “Yesenia Campos,” 42, was sentenced today to 46 months in prison, followed by three years of supervised release, and was ordered to pay $207,810 in restitution. Pouparina was convicted in February 2013 of four counts of wire fraud and one count of mail fraud.  

According to court documents and evidence presented at trial, Pouparina, a licensed title agent in the state of Florida, sought to obtain a reverse mortgage loan worth more than $400,000 on her own property in the name of her mother, an individual who failed to meet the requirements of the Home Equity Conversion Mortgage (HECM) program.  She submitted a false loan application and doctored records in support of that application, misrepresenting her mother’s eligibility to participate in the program.  Pouparina acted as the title agent for the loan and disbursed the loan proceeds directly to her own personal bank accounts.  Pouparina also enriched herself by collecting fees generated by the loan, and further profited by using the loan proceeds in connection with her business as a hard-money lender in other mortgage deals.   

Following Pouparina’s conviction on the fraud counts, the jury also found forfeitable three bank accounts controlled by the defendant, which were seized by the government during the course of the investigation.

This case was investigated by HUD-OIG.  Trial Attorney Sandra L. Moser of the Criminal Division’s Fraud Section prosecuted the case with assistance from the U.S. Attorney’s Office for the Southern District of Florida.

Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 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, visit www.stopfraud.gov.

The United States and the Commonwealth of Kentucky have reached a settlement with the AK Steel Corporation (AK Steel) in Ashland, Ky., resolving alleged violations of the Clean Air Act, AK Steel’s title V permit, and the Kentucky State Implementation Plan, announced the Department of Justice and the U.S. Environmental Protection Agency (EPA).

Under the terms of settlement, AK Steel will pay a civil penalty of $1.65 million, of which $25,000 will be paid to the Commonwealth of Kentucky, for the alleged violations that occurred at AK Steel’s former coke production facility in Ashland.  AK Steel shut down the coke plant on June 21, 2011.  Coke is used as a carbon source and as a fuel to heat and melt iron ore at steel making facilities.

Although AK Steel closed the plant involved in this enforcement action, AK Steel is currently operating the Ashland West Works facility a few miles away from the former coke plant.  Under the agreement, AK Steel has agreed to spend at least $2 million on state projects to reduce particulate matter emissions at the Ashland West Works facility.

“This settlement holds AK Steel accountable for years of violations at its now closed coke plant in Ashland,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “As a result of this agreement, state projects to reduce particulate matter emissions at the Ashland West Works facility will continue to improve air quality for area residents for many years to come.”

“This settlement promotes a healthier environment for our citizens and represents a just resolution of this matter,” said U.S. Attorney for the Eastern District of Kentucky Kerry B. Harvey. “We are committed to the effective enforcement of the environmental laws designed to protect the health of our people”

“We are proud to join with our partners in the Commonwealth of Kentucky in this step toward cleaner air and better health for the citizens of Ashland,” said Stan Meiburg, EPA Acting Regional Administrator in Atlanta.

The consent decree was lodged in the U.S. District Court for the Eastern District of Kentucky. Notice of the lodging of the consent decree will appear in the Federal Register allowing for a 30-day public comment period before the consent decree can be entered by the court as final judgment. The consent decree will available for viewing at www.justice.gov/enrd/Consent_Decrees.html

An Aryan Brotherhood of Texas (ABT) gang member and an ABT associate have pleaded guilty to charges related to the May 2008 murder of Mark Davis Byrd Sr. in Atascosa County, Texas.

The guilty pleas were announced today by 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.

Shane Gail McNiel, aka “Dirty,” 34, of San Antonio, pleaded guilty today before U.S. District Judge Sim Lake in the Southern District of Texas to the charge of accessory after the fact in the murder of Byrd.  Destiny Nicole Feathers, 24, of Jourdanton, Texas, pleaded guilty to the same offense on Aug. 14, 2013.

According to information presented in court, McNiel was an ABT member and Feathers was associated with the gang, a powerful race-based, statewide organization that operates inside and outside of state and federal prisons throughout Texas and elsewhere in the United States.  According to court documents, Byrd, an ABT prospect, was murdered by Jim Flint McIntyre, aka “Q-Ball,” Michael Dewayne Smith, aka “Bucky,” and another ABT gang member for allegedly stealing drugs he was ordered to deliver to a customer on behalf of the ABT. According to court documents, Byrd was murdered as a result of a “discipline” ordered by Frank Lavell Urbish, aka “Thumper,” and his superiors.  Byrd’s body was discovered in Atascosa County on May 4, 2008.  McIntyre, Smith and Urbish each pleaded guilty in 2011 to the racketeering murder of Byrd. 

According to their plea agreements, McNiel and Feathers helped hide a shotgun that they knew had been used to murder Byrd.  Following the murder, Urbish and Feathers drove to McNiel’s house with the shotgun wrapped in a sheet and gave it to McNiel who then hid the shotgun in a metal shed behind his house.  According to court documents, Feathers further assisted McIntyre by disposing of Byrd’s bloody clothing.

According to court documents, 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.  While the ABT was at its inception primarily concerned with the protection of white inmates and white supremacy/separatism, over time the ABT has expanded its criminal enterprise to include illegal activities for profit.

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

According to court documents, 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 members of the ABT.

At sentencing, scheduled for Jan. 30, 2014, McNiel and Feathers each face a maximum penalty of 15 years in prison.
 
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; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite Texas, Police Department; Montgomery County District Attorney’s Office;  and the Atascosa County District Attorney’s Office.

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

A patient recruiter and a therapy staffing company owner pleaded guilty today in connection with a $7 million health care fraud scheme involving the now defunct home health care company Anna Nursing Services Corp.

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

Ivan Alejo, 48, and Hugo Morales, 36, pleaded guilty before U.S. District Judge Jose E. Martinez in the Southern District of Florida to one count of conspiracy to commit health care fraud.  At sentencing, scheduled for Nov. 5, 2013, Alejo and Morales each face a maximum penalty of 10 years in prison.

Alejo worked as a patient recruiter at Anna Nursing, a home health care agency in Miami Springs, Fla., that purported to provide home health and therapy services to Medicare beneficiaries but in reality billed Medicare for expensive physical therapy and home health care services that were not medically necessary and/or were not provided.  Morales owned Professionals Therapy Staffing Services Inc., which provided therapists to Anna Nursing.

Alejo and his co-conspirators negotiated and paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Anna Nursing for home health and therapy services that were medically unnecessary and/or not provided.  He and others 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.  Alejo and his co-conspirators would use the prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services.

Morales and others created fictitious progress notes and other patient files indicating that therapists from Professionals Therapy had provided physical or occupational therapy services to particular Medicare beneficiaries, when in many instances those services had not been provided and/or were not medically necessary.  Morales knew the falsified documents were used to support false claims for home health care services billed to Medicare by his co-conspirators at Anna Nursing. 
 
From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care services that were not medically necessary and/or not provided.

This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by 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 & 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. 

Richard S. Obedian, a Long Island, N.Y., orthopedic surgeon, will pay the government $388,000 to settle allegations that he violated the False Claims Act by submitting false claims to Medicare for minimally invasive spine procedures, the Justice Department announced today. 
 
Allegedly, throughout 2005, Obedian knowingly submitted improper claims to Medicare for a procedure known as kyphoplasty, a minimally invasive procedure used to treat compression fractures of the spine that often are due to osteoporosis.  Prior to 2006, Medicare billing rules required the use of a specific billing code to denote the performance of a kyphoplasty procedure.  Those same rules precluded the use of other codes assigned to more invasive and complicated, and therefore more expensive, surgeries.  The government alleged that Obedian knowingly circumvented lower payment rates for kyphoplasty procedures performed throughout 2005 by using incorrect billing codes assigned to more complicated surgeries, thereby inflating his Medicare reimbursements.    
                                       
“We expect physicians who participate in federal health care programs to bill for their services accurately and honestly,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “Neither the Department of Justice nor the taxpayers will tolerate those who knowingly overbill federal health care programs.” 

“We will continue to vigorously enforce the False Claims Act for the protection of the taxpayers and the United States government,” said William J. Hochul, Jr., U.S. Attorney for the Western District of New York. 

“The Obedian settlement vividly illustrates the role of dynamic law enforcement partnerships in the battle to protect Medicare from those who would bill inappropriately,” said Thomas O’Donnell, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services, New York region.  “Our office continues working to ensure that taxpayer money is spent wisely.”

“This resolution is a prime example of CMS’ successful partnership with the Office of Inspector General for the Department of Health and Human Services and the Department of Justice to carry out our mission to prevent and detect Medicare fraud and protect the Medicare Trust Fund,” said Peter Budett, Deputy Administrator and Director, Center for Program Integrity in the Centers for Medicare and Medicaid Services.

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.
 
This settlement was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of New York and the Department of Health and Human Services’ Office of Inspector General.  The settlement is part of the Department’s broader investigation into kyphoplasty billing practices among hospitals, which has resulted in settlements with more than 100 hospitals totaling approximately $75 million to resolve allegations that they mischarged Medicare for kyphoplasty procedures.  In addition, the government previously settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures.
 
The claims resolved by this settlement are allegations only, and there has been no determination of liability.  

The Justice Department announced today the unsealing of a superseding indictment returned by a federal grand jury in Sacramento, Calif., charging Teresa Marie Marty, Charles Tingler and Victoria Tingler, all of Placerville, Calif., with conspiracy to defraud the United States and filing multi-million dollar liens against government officials.

Marty is charged with filing liens against the property of three Internal Revenue Service (IRS) employees involved in the collection of taxes she owed the IRS.  She also filed liens of at least $84 million against the property of two Justice Department attorneys involved in a lawsuit filed against her in 2009 to enjoin her and her business, Advanced Financial Services (AFS), from preparing tax returns.

According to the superseding indictment, the Tinglers were clients of Marty and AFS, who filed a false tax return in 2008 fraudulently claiming a refund of $358,415.  The indictment charges the Tinglers, as well as Marty, with filing this tax return. When the IRS tried to collect the fraudulently obtained refund, both Mr. and Mrs. Tingler filed multiple liens against the IRS revenue officer who was handling their collection case.

According to the charging documents the liens disclosed the social security numbers of the respective government employees. Marty and the Tinglers are also charged with multiple counts of unlawfully using the social security numbers of the government employees in the liens they filed with the California Secretary of State.

Finally, the indictment charges Marty, Mr. Tingler and AFS office manager Pamela Harris, of Placerville with participating in a conspiracy to defraud the IRS.  The indictment alleges that as part of the conspiracy, Harris and Marty engaged a commercial collection agency to collect one of the three false liens that Mr. Tingler had filed, one of which was in the amount of $500,000.

Marty, Harris, and Marty’s daughter, Rebecca Bandera-Marty, had previously been indicted in June 2013 for a large-scale tax-fraud scheme. Those charges are included in this superseding indictment.  According to the superseding indictment, in 2008 and 2009 Marty, Bandera-Marty, and Harris conspired to file at least 250 false individual federal income tax returns on behalf of individuals who resided in twenty-six states, and which claimed more than $60 million in false federal income tax refunds.

An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.  If convicted, the defendants face up to five years in prison for the conspiracy charge as well as each charge of filing a false claim and unlawfully disclosing a social security number.  Each retaliatory lien count carries a maximum penalty of 10 years in prison.

The case was investigated by the Treasury Inspector General for Tax Administration and by IRS-Criminal Investigation and is being prosecuted by Justice Department Tax Division Trial Attorney Ignacio Perez de la Cruz and Assistant U.S. Attorney Matthew Segal in the Eastern District of California.

Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, announced today the guilty plea of Thomas Nastasi III, 46, of Mt. Kisco, N.Y., to one count of willful failure to pay the Internal Revenue Service (IRS) the payroll taxes of his company, Nastasi Maintenance & Construction LLC.  Nastasi pleaded guilty before U.S. District Judge Paul G. Gardephe in the Southern District of New York.

According to the previously filed indictment and statements made during Nastasi’s guilty plea, from 2001 through 2011, Thomas Nastasi III owned and operated several Manhattan construction and maintenance companies, including Nastasi Maintenance & Construction.  As the president of the companies, Nastasi was responsible for withholding payroll taxes from his employees and paying them over to the IRS.  Those taxes included the employees’ income taxes, Social Security, and Medicare taxes.  Nastasi accumulated over $1.7 million in payroll taxes that were owed but never paid to the IRS. Those taxes included the employer’s portion of Social Security and Medicare taxes for his employees.

Court documents and statements also established that instead of paying the companies’ payroll taxes to the IRS, Nastasi used company funds to pay hundreds of thousands of dollars in personal expenses, for items including boat-related expenses and cigars. Nastasi also made false statements to the IRS in the course of its attempts to obtain delinquent tax returns and collect the corporate and personal taxes owed by Nastasi and his companies.

“Employers who use taxes withheld from their employees’ paychecks to fund their own lavish lifestyles instead of paying over the funds to the government show a blatant disregard not only for the law, but also for all honest taxpayers who work hard and play by the rules,” said Assistant Attorney General Kathy Keneally.  “Business owners who commit these crimes not only face jail time, but also must repay the stolen taxes, with interest and penalties.” 

“Business owners who misdirect employment taxes to their own personal ends are stealing from their employees and all taxpayers’ futures,” said Richard Weber, Chief of IRS Criminal Investigation. “Thomas Nastasi III funded an extravagant lifestyle with his ill-gotten gains, including $67,000 spent on cigars. When investigated, he made false statements in an attempt to obstruct our special agents.  IRS Criminal Investigation vigorously pursues anyone who collects taxes and fails to timely remit those taxes.”

Sentencing is set for Dec.19, 2013, at 2:30 p.m. before Judge Paul Gardephe.

Assistant Attorney General Keneally thanked special agents of IRS-Criminal Investigation and the U.S. Attorney’s Office for the Southern District of New York for their efforts in this case. 

Tax Division Assistant Section Chief Nanette L. Davis is prosecuting this case.

The Justice Department announced today that Multi/Tech Engineering Services Inc., an engineering firm based in Salem, Ore., has agreed to pay more than $60,000 to settle a lawsuit alleging that it had violated the Fair Housing Act by designing Gateway Village Apartments with steps and other features that made it inaccessible to people with disabilities. 

“Steps, narrow doors and other accessibility barriers prevent people with disabilities from exercising the same rights to obtain housing of their choice that other people enjoy” said Acting Assistant General for the Civil Rights Division Jocelyn Samuels.  “We will hold builders and designers accountable and those who fail to follow the law will face enforcement action.”    

This settlement will assist in compensating victims of discrimination and in removing accessibility barriers at Gateway Village, a 275 unit apartment complex in Salem.  In May 2013, the Justice Department and the Fair Housing Council of Oregon (FHCO) also reached a settlement with the developers of the property to resolve the rest of the lawsuit, filed in September 2011.  The settlement must still be approved by the court.  

Under the terms of the parties’ agreement, Multi/Tech will pay $32,000 to a settlement fund to compensate individuals with disabilities who were impacted by the accessibility violations.  Multi/Tech will also contribute $21,000 to the corrective actions already being undertaken by the developer according to the prior settlement agreement to make Gateway Village accessible to people with disabilities.  These corrective actions include removing steps from sidewalks, widening interior doorways, reducing threshold heights, replacing excessively sloped portions of sidewalks and installing properly sloped curb ramps to allow people with disabilities to access the sidewalks from the parking areas.  In addition, Multi/Tech will pay $7,902.70 in damages to the FHCO, the plaintiff-intervenor, whose investigation revealed the accessibility violations.      

“The right to accessible housing is a fundamental protection afforded by law,” said U.S. Attorney for the District of Oregon Amanda Marshall. “I am committed to working with the Fair Housing Council of Oregon, and our federal, state and local partners to ensure that those who design and construct housing units make them accessible to people with disabilities in compliance with the Fair Housing Act.”

The lawsuit arose as a result of a complaint filed by FHCO with the U.S. Department of Housing and Urban Development (HUD).  After HUD investigated the complaint, it issued a charge of discrimination and referred the matter to the Justice Department. 

“For more than two decades the law has required that newly-built multifamily housing provide equal access to people with disabilities,” said Bryan Greene, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity. “Throughout that time, HUD and the Department of Justice have educated builders, design professionals and others on those requirements, most recently through guidance issued this past April.  Where those efforts fail, our agencies will gain compliance through enforcement of the law."

 Individuals who are entitled to share in the settlement fund will be identified through a process established in the settlement. Those who believe they were subjected to unlawful discrimination at Gateway Village, either when they lived there or when they considered living there, should contact the Justice Department toll-free at 1-800-896-7743 mailbox # 9993, or e-mail the Justice Department at fairhousing@usdoj.gov .

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.  Among other things, the Fair Housing Act requires that newly constructed multifamily housing with four or more units contain certain accessibility features so that the housing is accessible to and usable by people with disabilities.  

For more information about the Civil Rights Division and the laws it enforces please visit www.usdoj.gov/crt . 

Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Line at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov , or contact HUD at 1-800-669-9777.

Justice Department announced that a 14-count superseding indictment was unsealed today, charging JB Tax Professional Services Inc., Jacqueline J. Arias and Jose Bayron Estrada, of Spruce Pine, Ala., along with 19 foreign nationals, many of whom resided in the New Orleans area, with conspiracy to defraud the United States and conspiracy to commit mail and wire fraud by filing fraudulent income tax returns.  The indictment also charges certain defendants with aggravated identity theft and conspiracy to commit money laundering.  Most of the defendants were previously indicted in May 2013 and arrested in June 2013.

According to the indictment, members of the conspiracy obtained Forms W-2, often by purchasing them for cash, for the purposes of filing fraudulent income tax returns. Conspirators further obtained individual taxpayer identification numbers (ITINs) for use in filing fraudulent tax returns, in some cases using false applications filed with the assistance of Arias and JB Tax Professional Services.  An ITIN is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who do not have, and are not eligible to obtain, a social security number. Both Arias and the business were designated by the IRS as certified acceptance agents, which are entrusted by the IRS with the responsibility of reviewing the documentation of an ITIN applicant’s identity and alien status for authenticity, completeness and accuracy before submitting their application to the IRS. 

The charging documents allege that the defendants used the social security numbers of real persons to conduct mail and wire fraud.  The defendants also allegedly disguised and concealed the proceeds of their fraud by agreeing to conduct certain types of financial transactions.

An indictment merely alleges that crimes have been committed, and each defendant is presumed innocent until proven guilty. Each defendant faces a maximum potential sentence of five years in prison for the conspiracy charge.  Each aggravated identity theft charge carries a mandatory two-year prison sentence, and the defendants charged in the money laundering conspiracy count face a possible maximum sentence of twenty years in prison. The defendants will also be subject to fines, mandatory restitution and forfeiture if convicted.

The case is being investigated by U.S. Immigration and Customs Enforcement, which oversees Homeland Security Investigations; IRS-Criminal Investigation; the U.S. Secret Service; the U.S. Postal Inspection Service; and the Social Security Administration, Office of the Inspector General, in partnership with the St. Tammany Parish, La. and Jefferson Parish, La. Sheriffs’ Departments.  The case is being prosecuted by Tax Division Trial Attorneys Hayden Brockett and Kevin Lombardi.

Shands Teaching Hospital & Clinics Inc., Shands Jacksonville Medical Center Inc. and Shands Jacksonville Healthcare Inc. (collectively, Shands Healthcare), which operates a network of health care providers in Florida, will pay the government and the state of Florida a total of $26 million to settle allegations that six of its health care facilities submitted false claims to Medicare, Medicaid and other federal health care programs for inpatient procedures that should have been billed as outpatient services, the Justice Department announced today.  The six Florida hospitals are:  Shands at Jacksonville; Shands at Gainesville, also known as Shands at the University of Florida; Shands Alachua General Hospital; Shands at Lakeshore; Shands Starke and Shands Live Oak.

 
“The Department of Justice is committed to ensuring that Medicare funds are expended appropriately, based on the medical needs of patients rather than the desire of health care providers to maximize profits,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “Hospitals participating in Medicare must bill for their services accurately and honestly.”

Allegedly, from 2003 through 2008, the six hospitals knowingly submitted inpatient claims to Medicare, Medicaid and TRICARE for certain services and procedures that Shands Healthcare knew were correctly billable only as outpatient services or procedures. 

           
“The public expects its medical professionals to operate with a high degree of integrity,” said A. Lee Bentley III, Acting U.S. Attorney for the Middle District of Florida.  “When health care providers seek higher profits at the expense of their professional judgment, the public trust in the medical system is compromised.”

 
“Regardless of the complexity of these schemes to siphon off crucial health care dollars,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services, “our law enforcement officials will work tirelessly to seek justice.”

The six Florida hospitals were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to sue on behalf of the government and receive a portion of the proceeds of any settlement or judgment awarded against a defendant.  The lawsuit was filed in federal district court in Jacksonville, Fla., by Terry Myers, the president of a healthcare consulting firm, YPRO Corp.  Of the $26 million settlement, $25,170,400 will go to Medicare and other federal health care payors.  The settlement also resolved allegations under the Florida False Claims Act; the state of Florida will receive $829,600.  Myers’ portion of these recoveries has yet to be determined.

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 settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Middle District of Florida, the Commercial Litigation Branch of the Justice Department’s Civil Division, the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General, and the Florida Attorney General’s Office. 

 
The claims resolved by these settlements are allegations only, and there has been no determination of liability.   The lawsuit is captioned United States of America and the State of Florida ex rel. Terry L. Myers v. Shands Healthcare et al., Civil Action No. 3:08-cv-441-J-16HTS (M.D. Fla.).

The Justice Department and Internal Revenue Service (IRS) announced that Gloria Donoghue was sentenced today in federal court in the Eastern District of New York to18 months in prison for using the mail in her tax refund scheme.  Donoghue was also ordered to pay restitution of $320,621 to the IRS.

According to the superseding indictment, Donoghue was charged with making false claims against the United States, through the filing of three trust returns, each of which claimed false refunds of $300,000.  She was also charged with causing Treasury checks for those years to be mailed to Roosevelt, N.Y.  In April 2013, Donoghue pleaded guilty to one count of mail fraud.  As part of her plea agreement, Donoghue agreed to the forfeiture of over $579,378. 

This case was investigated by IRS-Criminal Investigation and prosecuted by Trial Attorneys Jennifer R. Laraia and Erin Pulice of the Justice Department's Tax Division.

The Justice Department’s Civil Rights Division announced today that it has joined with private plaintiffs in entering an interim settlement agreement with the state of Texas intended to enable Texans with intellectual and other developmental disabilities to live in community settings rather than nursing facilities.  The interim agreement calls for the state to begin expanding community alternatives to nursing facilities for thousands of persons with these types of disabilities, while the parties temporarily suspend their ongoing litigation and work to negotiate a comprehensive settlement of all remaining issues in the case. 

The litigation involves claims that the state has not complied with the Americans with Disabilities Act (ADA), other federal statutes and the Supreme Court’s landmark decision in Olmstead v. L.C. in ways leading to the needless institutionalization of people with intellectual and other developmental disabilities in nursing facilities. 

“We applaud the state’s commitment to initiate steps providing real options to Texans with intellectual and other developmental disabilities, so that they can live and engage in their own communities, rather than spend their lives in nursing facilities,” said Acting Assistant Attorney General for Civil Rights Jocelyn Samuels. “The Supreme Court made clear more than a decade ago that people with disabilities must be provided the same opportunities to participate in community life as those without disabilities. This agreement is an important step to making that promise a reality in Texas.”

The interim agreement offers meaningful improvement in the lives of people like plaintiff Eric Steward.  After spending nearly a decade in a nursing facility, Mr. Steward recently moved to his own home in San Antonio and, for the first time, attended the city’s annual celebration and street festival.  There are thousands of people who remain unnecessarily segregated, and the interim agreement will help ensure that they, like Mr. Steward, have opportunities to live their lives as they want. 

The interim agreement calls for the state to identify people with developmental disabilities in nursing facilities, inform them about community options and help those who want to move to the community receive the services that they need there, instead of in a nursing facility.  In addition, the state will establish a system to help divert people from avoidable nursing facility admission. 

Private plaintiffs filed suit against the state in 2010, represented by Disability Rights Texas, the Center for Public Representation, and the law firm of Weil, Gotshal & Manges LLP.  The Justice Department intervened in the case in 2012.  The department and private plaintiffs subsequently entered into extensive settlement negotiations with the state, leading to this interim agreement.  It is the Department of Justice’s first statewide settlement to vindicate the Olmstead rights of individuals in nursing facilities. 

The Civil Rights Division enforces the ADA, which authorizes the Attorney General to investigate whether a state is serving individuals in the most integrated settings appropriate to their needs.  Please visit http://www.justice.gov/crt and http://www.ada.gov to learn more about the ADA and other laws enforced by the Justice Department’s Civil Rights Division.

This agreement is due to the efforts of Alison Barkoff, Special Counsel for Olmstead Enforcement and the following staff members of the Civil Rights Division, Special Litigation Section: Jonathan Smith, Chief ; Benjamin Tayloe, Deputy Chief; Robert Koch, Regan Rush and Alexandra Shandell, Trial Attorneys; and Gary Graca, paralegal

A federal court in Indianapolis permanently barred David Franklin and his company, Instant Refund Tax Service (IRTS), from preparing tax returns and from operating a tax-preparation business, the Justice Department announced today.  The government alleged that IRTS, which Franklin wholly owns, operated as a franchisee of Instant Tax Service, a large national tax-preparation franchisor operated by ITS Financial LLC, based in Dayton, Ohio.  The order follows an earlier preliminary injunction against the defendants. In a separate case, a federal court in Ohio preliminarily enjoined the Dayton-based franchisor last November.  The defendants in both cases consented to entry of the preliminary injunctions without admitting the allegations against them.

The Indiana permanent injunction order was signed by Judge Sarah Evans Barker of the U.S. District Court for the Southern District of Indiana.  The government complaint in the case alleged that Franklin owned and operated 22 Instant Tax Service locations that prepared and filed false and fraudulent income tax returns for customers, fabricated income for phony businesses to obtain larger tax credits, forged  W-2 forms, filed returns improperly based on paycheck stubs rather than W-2 forms, claimed false education tax credits and reported false filing statuses for customers.  The government also accused Franklin’s offices of filing tax returns without customers’ authorization and selling false and deceptive loan products to customers.

The case is one of five similar civil actions that the Justice Department brought against Instant Tax Service franchises and the corporate franchisor, ITS Financial, which claims to be the fourth-largest tax-preparation firm in the nation.  The court recently conducted a two-week trial in the Ohio case, in connection with the government’s request to permanently enjoin the Instant Tax Service franchisor.  A decision has not yet been issued. 

For more information on the earlier preliminary injunction against Franklin and IRTS visit www.justice.gov/tax/2013/txdv13129.htm and for more information on actions brought against the Instant Tax Service franchise visit www.justice.gov/tax/2012/txdv121304.htm.  In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax-fraud promoters.  More information about those cases is available on the Justice Department website.

United States v. David R. Franklin, et al.
Stipulated Order for Permanent Injunction Against David Ray Franklin and Instant Refund Tax Service, Inc. (PDF)

Fourteen current and former recruiters and soldiers of the U.S. Army National Guard have been charged in the Southern District of Texas for engaging in a multi-year scheme to defraud the U.S. Army National Guard Bureau, 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.

The cases against all 14 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, 11 of whom have pleaded guilty.

According to court documents, 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 Army National Guard soldiers who referred others to join the Army National Guard.  Through this program, a participating soldier could receive up to $3,000 in bonus payments for referring another individual to join.  Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account.  To participate in the program, soldiers were required to create online recruiting assistant accounts.

In an indictment unsealed today in its entirety, Michael Rambaran, 50, of Pearland, Texas; and Edia Antoine, 27, Ernest A. Millien III, 49, and Christopher D. Renfro, 25, all of Houston, were charged with conspiracy, bribery, wire fraud and aggravated identity theft.  According to court documents, between February 2008 and August 2011, Rambaran was a National Guard recruiter and Antoine, Millien and Renfro were recruiting assistants in G-RAP.  Rambaran allegedly provided the names, addresses and Social Security numbers of potential soldiers to Antoine, Millien and Renfro so they could claim fraudulent recruiting referral bonus payments by falsely claiming they were responsible for referring those potential soldiers to join the military.  The indictment alleges Antoine, Millien and Renfro paid kickbacks to Rambaran by providing a portion of the fraudulent bonus payments. 

In a separate indictment unsealed on Aug. 9, 2013, Zaunmine O. Duncan, 37, of Austin, Texas, was charged with conspiracy, bribery, wire fraud, aggravated identity theft and witness tampering.  According to court documents, between February 2008 and August 2010, Duncan, an Army National Guard recruiter, allegedly provided the personal identifiers of potential soldiers to four co-conspirators, identified as Recruiting Assistants 1 through 4, who used the personal identifiers to claim fraudulent recruiting referral bonuses through their G-RAP accounts.  According to the indictment, Recruiting Assistants 1 through 4 paid kickbacks to Duncan by providing a portion of the fraudulent proceeds.  The indictment also alleges Duncan and Recruiting Assistant 1, without permission or lawful authority, used the identity of a potential soldier to set up a G-RAP account through which Duncan and Recruiting Assistant 1 received additional fraudulent bonus payments.  The indictment also charges Duncan with witness tampering, alleging Duncan instructed a witness, identified in the indictment as Recruiting Assistant 1, to make certain false exculpatory statements to federal law enforcement officers.

In another related but separate indictment also unsealed on Aug. 9, 2013, Jammie T. Martin, 36, and Michelle H. Davis, 32, both of Katy, Texas; and Danielle V. Applin, 27, of Harker Heights, Texas, were charged with conspiracy, bribery, wire fraud and aggravated identity theft.  According to the indictment, from February 2009 through April 2011, Martin served as an Army National Guard recruiter and Applin and Davis served as recruiting assistants with the G-RAP.  According to court documents, Martin allegedly provided the personal identifiers of potential soldiers to Applin and Davis so they could claim fraudulent recruiting referral bonus payments by falsely claiming they were responsible for referring the potential soldiers to join the military.  The indictment alleges Applin and Davis paid kickbacks to Martin by providing a portion of the fraudulent bonus payments. 

In addition, in the last three weeks, Melanie D. Moraida, 33, of Pearland, Texas; Elisha M. Ceja, 26, of Barboursville, W.Va.; Kimberly N. Hartgraves, 28, of League City, Texas; Lashae C. Hawkins, 27, of San Antonio; Annika S. Chambers, 27, of Houston; and Vanessa Phillips, 35, of Houston, were all charged in separate criminal informations with one count of conspiracy and one count of bribery. 

A conviction for bribery carries as possible punishment a maximum penalty of 15 years in federal prison.  Witness tampering and wire fraud, upon conviction, could each result in a maximum of 20 years imprisonment, while a conviction for the conspiracy charge carries a five-year maximum sentence.  If convicted of aggravated identity theft, a defendant will also have to serve a mandatory penalty of two years in prison, which must be served consecutively to any other sentence imposed.  All charges also carry a possible $250,000 maximum fine or twice the pecuniary gain or loss.

A criminal indictment or information is a formal accusation of criminal conduct, not evidence.  A defendant is presumed innocent unless convicted through due process of law.
 
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. Trial Attorneys Edward J. Loya Jr., 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 are prosecuting the case. 

Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels, U.S. Attorney for the Northern District of Ohio Steven M. Dettelbach and Special Agent in Charge for the FBI Cleveland Field Office Stephen D. Anthony,  announced today that former Lorain County, Ohio corrections officer Marlon Taylor, 47, of Vermilion, Ohio, was charged in the U.S. Court for the Northern District of Ohio with one count of deprivation of rights under color of law. 

The criminal information alleges that on July 29, 2012, Taylor, while working as a corrections officer in the Lorain County Jail, assaulted an inmate identified as Victim 1 by striking him repeatedly, causing bodily injury and depriving Victim 1 the right to be free from cruel and unusual punishment.

If convicted, Taylor faces a potential maximum sentence of 10 years in prison and a $250,000 fine.  A charge is not evidence of guilt and all defendants are presumed innocent until proven guilty.

The investigation has been conducted by the FBI Cleveland Field Office.   Assistant U.S. Attorneys Antoinette T. Bacon and Lauren Bell, and, Trial Attorney Betsy Biffl of the Civil Rights Division, Criminal Section will prosecute the case.

Saipan, MP – United States Attorney for the Districts of Guam and the Northern Mariana Islands Alicia A.G. Limtiaco, together with Commonwealth of the Northern Mariana Islands (CNMI) Attorney General Joey P. San Nicolas, Honolulu Federal Bureau of Investigation (FBI) Special Agent in Charge Vida Bottom, and CNMI Department of Public Safety Commissioner James Deleon Guerrero announced today the filing of federal charges stemming from a joint investigation of sex offenses involving children:

• a federal criminal complaint charging ANNETTE NAKATSUKASA BASA with Sex Trafficking of Children.   A conviction carries a statutory minimum of at least ten years of imprisonment and up to a maximum sentence of life imprisonment.
• a  federal  criminal  complaint  charging  RICHARD  SULLIVAN  BENAVENTE  with Sexual Exploitation of Children.   A conviction carries a statutory minimum of fifteen years of imprisonment and up to a maximum sentence of thirty years of imprisonment.


• Defendants BASA and BENAVENTE made their initial appearance today in the U.S. District Court before the Honorable Chief Judge Ramona V. Manglona.  Detention hearings for both defendants will be held on Wednesday, August 21, 2013 at 9:00 AM and preliminary hearings will be held on Friday, August 30, 2013, at 9:00 AM, in the U.S. District Court for the NMI.

  “Protecting our children and community from those who engage in human trafficking and the exploitation of children is a top priority of the Department of Justice,” said U.S. Attorney Limtiaco.  “This investigation shows the commitment of federal and local law enforcement to work together to investigate and prosecute child exploitation and to rescue and assist victims.”

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

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

   

Three members and one associate of the North Carolina Almighty Latin King/Queen Nation (ALKQN) have been sentenced this week in federal court in the Middle District of North Carolina.

The announcement was made today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Ripley Rand of the Middle District of North Carolina; Special Agent in Charge John A. Strong of the FBI’s Charlotte Division; Chief of the Greensboro, N.C., Police Department Ken Miller; and B.J. Barnes, Sheriff of Guilford County, N.C.

U.S. District Court Judge James A. Beaty Jr. sentenced the following defendants:

• Jorge Peter Cornell, 36, of Greensboro, N.C., aka “King Jay,” was sentenced on Aug. 14, 2013, to serve 336 months in prison; • Jason Paul Yates, 32, originally of Chicago but recently living in North Carolina, aka “King Squirrel,” was sentenced on Aug. 15, 2013, to serve 206 months in prison; • Steaphan Acencio-Vasquez, 22, of Raleigh, N.C., aka “King Leo,” was sentenced on Aug. 13, 2013, to serve 96 months in prison and three years of supervised release; and
• Ernesto Wilson, 55, of New York City, aka “Yayo,” was sentenced on Aug. 13, 2013, to serve 204 months in prison and three years of supervised release. 
 
Cornell, the leader of the North Carolina ALKQN, was convicted by a federal jury on Nov. 21, 2012, of racketeering conspiracy, violent crimes in aid of racketeering activity and use of a firearm during and in relation to a crime of violence for an April 2008 assault with a dangerous weapon.
 
Wilson, an ALKQN associate, was convicted by a federal jury on Nov. 21, 2012, of racketeering conspiracy. 

ALKQN members Yates and Acencio-Vasquez previously pleaded guilty to racketeering conspiracy. 

According to court documents and evidence presented at trial, the defendants were members and associates of ALKQN, a violent street gang that originated in Chicago in the 1960s and ultimately migrated to cities throughout the United States, including New York City and ultimately Greensboro in 2002.  From approximately 2005 until December 2011, ALKQN gang members met on a regular basis to increase their knowledge base of the gang rules; discuss criminal activity and how to deal with rival gangs, including by attempted murder; purchase firearms; circulate firearms for use in criminal activity by other ALKQN members; and engage in violent crimes such as robberies, bank fraud, arson and carjacking.  The proceeds of this criminal activity helped to finance the gang’s illegal activities.  ALKQN members also attempted to murder members of the gang when they attempted to terminate their membership.

Evidence presented at trial also showed that Cornell conspired with other ALKQN members to commit racketeering acts, including the April 2008 shooting of a rival gang member; the commissioning of no fewer than five Hobbs Act Robberies of businesses located throughout the Greensboro area; the plotting of firebomb attacks on the residences of former ALKQN members; attacks on former ALKQN members; and the killing of former ALKQN members through drive-by shootings.  Cornell also provided firearms to members of ALKQN to commit several of these crimes.

ALKQN member Wesley Anderson Williams, who pleaded guilty on Oct. 1, 2012, to racketeering conspiracy, will be sentenced by Judge Beaty on Aug. 20, 2013.  Russell Lloyd Kilfoil, an ALKQN member who was convicted by a federal jury on Nov. 21, 2012, will be sentenced on Aug. 28, 2013.

The investigation was a joint operation conducted by the FBI’s Greensboro Field Office, Greensboro Police Department and the Guilford County Sheriff’s Office.

The case was prosecuted by Trial Attorney Leshia Lee-Dixon of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Robert A.J. Lang of the Middle District of North Carolina.

U.S.  Attorney for the Western District of Kentucky David J. Hale and Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels announced that Steven Molen, a Sheriff’s Deputy with the Pulaski County Sheriff’s Office, was indicted yesterday by a federal grand jury on one count of violating the civil rights of a victim by using excessive force in August 2008.

The indictment alleges that on Aug. 24, 2008, Molen assaulted a victim identified in the indictment as “C.F.,” resulting in bodily injury. 

On June 27, 2013, a federal grand jury in the Eastern District of Kentucky indicted Molen on two other counts of violating the civil rights of different victims by using excessive force in 2009 and 2011.  

The investigation was conducted by the FBI.  The cases against Molen will be prosecuted by Assistant U.S. Attorney Joshua Judd from the Western District of Kentucky, Assistant U.S. Attorneys Pat Molloy and Ron Walker from the Eastern District of Kentucky, and Trial Attorney Ali Ahmad from the Civil Rights Division.

The charges set forth in an indictment are merely accusations and the defendant is presumed innocent until proven guilty.

The owner of South Louisiana Home Health Care Inc. and the director of nursing for the Louisiana home health agency were sentenced today for their roles in a Medicare fraud scheme involving the payment of kickbacks and the falsification of documents.

Acting Assistant Attorney General Mythili Raman of the Criminal Division; Acting U.S. Attorney Walt Green of the Middle District of Louisiana; Special Agent in Charge Mike Fields of the Dallas Region of the HHS Office of the Inspector General (HHS-OIG); Special Agent in Charge Michael Anderson of the FBI’s New Orleans Division; and Louisiana State Attorney General James Buddy Caldwell made the announcement.
 
Louis T. Age Jr., 64, owned and operated South Louisiana Home Health Care and operated this company along with his former wife, Verna Age, 60, who served as the company’s director of nursing. Louis Age and Verna Age, both of Slidell, La., were sentenced today by U.S. District Judge James J. Brady of the Middle District of Louisiana to 180 months and 60 months in prison, respectively, and ordered to forfeit $9.2 million and pay $17.1 in restitution.

After a jury trial in March 2013, Louis Age and Verna Age each were convicted of one count of conspiracy to commit health care fraud, and Louis Age also was convicted of one count of conspiracy to defraud the United States and to pay or receive illegal health care kickbacks.  Verna Age previously was convicted of one count of conspiracy to defraud the United States and to pay or receive illegal health care kickbacks after a jury trial in October 2012. 

According to evidence presented at trial, Louis Age and Verna Age paid kickbacks to patient recruiters to obtain Medicare beneficiary information.  Nurses, including registered nurse Verna Age, then falsified qualification documents to make it appear that these beneficiaries qualified for home health services.  The evidence also showed that Louis Age hired and paid kickbacks to medical doctors to sign fraudulent referrals and certifications for home health services that were not medically necessary.  Louis Age and Verna Age then used the Medicare beneficiary information and false documents to bill Medicare for the medically unnecessary home health services.  From 2005 through 2011, Medicare paid South Louisiana Home Health Care approximately $17.1 million based on these fraudulent home health care claims. 
 
This case was investigated by the FBI, HHS-OIG and Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office 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 Middle District of Louisiana. The case was prosecuted by Trial Attorneys David M. Maria and Abigail B. Taylor of the Fraud Section, with assistance from Trial Attorney Arunabha Bhoumik.

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.

A greater Detroit-area physical therapist who was also an owner of a home health agency pleaded guilty yesterday for his role in a $22 million home health care fraud scheme.

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

Hemal Bhagat, 32, of Troy, Mich., pleaded guilty on Aug. 14, 2013, before U.S. District Judge Bernard A. Friedman in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.  At sentencing, scheduled for Nov. 12, 2013, Bhagat faces a maximum penalty of 10 years in prison and a $250,000 fine.

 
According to information contained in plea documents, Bhagat admitted that from approximately May 2009 through October 2011, he conspired with others to commit health care fraud through billing Medicare for home health care services that were not actually rendered and/or not medically necessary. A licensed physical therapist, Bhagat began working in June 2009 for Troy-based Prestige Home Health Services Inc., a home health agency owned by alleged co-conspirators.  In approximately August 2009, he and other co-conspirators became owners of Royal Home Health Care Inc., a home health agency also located in Troy.

 
Bhagat admitted that his co-conspirators at Prestige and Royal paid kickbacks to patient recruiters to obtain the information of Medicare beneficiaries, which the co-conspirators then used to bill Medicare for services that were not provided to these beneficiaries and/or were not medically necessary.  He and his co-conspirators then created fictitious therapy files appearing to document physical therapy services provided to Medicare beneficiaries, when in fact no such services had been provided and/or were not medically necessary.  Bhagat’s role in creating the fictitious therapy files was to sign documents – including physical therapy evaluations, supervisory patient visits, and patient discharge forms – indicating that he and others had provided physical therapy services to particular Medicare beneficiaries, when in fact they had not.  Bhagat admitted to knowing that the documents he falsified would be used to support false claims to Medicare by his co-conspirators at Prestige and Royal.  He submitted or caused the submission of claims to Medicare for services that were not medically necessary and/or not provided, which in turn caused Medicare to pay approximately $4,767,359.03.

This case was investigated by the FBI, HHS-OIG and IRS Criminal Investigation and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  This case is being prosecuted by Trial Attorney Niall M. O’Donnell, Deputy Chief Charles E. Duross, and Trial Attorney James McDonald of the Criminal Division’s Fraud Section.

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

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

Jose Armando Bran, aka “Pantro,” was sentenced today to serve two consecutive life sentences for his role in a murder and maiming that he ordered while he was an MS-13 gang leader in Richmond, Va.
 
The sentencing was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; Special Agent in Charge Jeffrey C. Mazanec of the FBI’s Richmond Field Office; Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Washington; Richmond Commonwealth Attorney Michael Herring; Chesterfield Commonwealth Attorney Billy Davenport; Chief Ray J. Tarasovic of the Richmond Police Department; and Col. Thierry G. Dupuis of the Chesterfield County Police Department.

Bran, 30, of Richmond, was sentenced by Senior U.S. District Judge Robert E. Payne in the Eastern District of Virginia.

On May 20, 2013, Bran was found guilty of two counts of conspiracy to commit murder, murder, maiming and use of a firearm during a crime of violence resulting in death.

According to evidence presented at trial, Bran was responsible for orchestrating the gangland-style execution of Osbin Hernandez-Gonzalez.  Bran, who served as the leader of MS-13’s Sailors Locos Salvatrucha clique in Richmond, suspected that Hernandez-Gonzalez had violated MS-13 rules by aiding a rival gang.  Based upon this suspicion, Bran created a ruse to lure Hernandez-Gonzalez to the “Pony Pasture” area on the banks of the James River.  Bran ordered MS-13 associate Karen San Jose to contact Hernandez-Gonzalez and convince him to gather with other MS-13 members.  Bran also enlisted the help of two juveniles, Luis Cabello and Jeremy Soto, who were tasked with actually carrying out the murder of Hernandez-Gonzalez.  Finally, to ensure the murder was carried out, Bran instructed MS-13 member Michael Arevalo, aka “Reptile,” to accompany the juveniles on the “mission” and to ensure the juveniles completed the murder, which Arevalo did. 
     
Evidence at trial also showed that in approximately January 2012, Bran was told that an individual with the initials F.A. was supplying information about the Richmond Sailors Clique to a rival gang.  A plan was developed to have MS-13 associate Justin Amador kill F.A. to both punish the supposed informant and test Amador’s loyalty.

On Jan. 14, 2012, Bran directed that the plan be carried out.  Sometime that evening, Giovanny Torres, along with Amador, Mario Molina and Marvin De Leon, drove the victim to a nightclub in Richmond.  They left after 45 minutes, telling the victim that they were all going to commit a burglary. They drove to the vicinity of the 3800 block of Terminal Avenue in Richmond, and De Leon and Amador got out of the car.  After a signal from Torres, De Leon grabbed the victim, pulled his sweatshirt over his head and held him while Amador stabbed the victim at least 14 times.  The victim escaped and fled to a nearby residence while the others drove away.  As a result of the attack, the victim lost a portion of one lung.

The other members and associates of the MS-13 Sailors Locos Salvatrucha clique in Richmond that have been convicted include the following individuals:

• On Jan. 23, 2013, Arevalo pleaded guilty in federal court.  He was sentenced on July 25, 2013, to serve life in prison plus 10 years. 

• On March 15, 2013, San Jose pleaded guilty in federal court.  On July 23, 2013, she was sentenced to serve 20 years in prison.

• Cabello was charged as an adult by the Richmond Commonwealth Attorney’s Office, and on Jan. 25, 2012, he was found guilty by a jury.  On June 24, 2013, Cabello was sentenced to serve 34 years in prison.

• Soto was charged as an adult by the Richmond Commonwealth Attorney’s Office and pleaded guilty on July 31, 2012.  On July 19, 2013, Soto was sentenced to serve 18 years in prison.

• On Aug. 15, 2012, Molina pleaded guilty in federal court. On Dec. 12, 2013, he was sentenced to serve 293 months in prison.

• On June 29, 2012, Torres pleaded guilty in federal court.  On March 14, 2013, he was sentenced to serve 235 months in prison.

• On May 10, 2012, De Leon pleaded guilty in federal court.  On July 23, 2013, he was sentenced to serve 235 months in prison.

• On June 18, 2012, Amador pleaded guilty in federal court.  On July 25, 2013, he was sentenced to serve 235 months in prison.

• Jose Mancia-Martinez, aka “Ready,” was charged as an adult in Chesterfield County Circuit Court.  On Jan. 9, 2013, he was found guilty by a jury of forcible rape.  On July 17, 2013, he was sentenced to serve 20 years in prison.

This case was investigated by the FBI, HSI, the Richmond Police Department and the Chesterfield County Police Department.   Assistant U.S. Attorney Roderick C. Young of the Eastern District of Virginia and Trial Attorney Andrew L. Creighton of the Criminal Division’s Organized Crime and Gang Section prosecuted the case on behalf of the United States.

The operator of the dragger F/V Norseman and an associated fish dealer pleaded guilty Thursday in federal court in Central Islip, N.Y., to federal violations stemming from their role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside Program, the Justice Department’s Environment and Natural Resources Division announced.

Charles Wertz Jr., a commercial fisherman from East Meadow, N.Y., pleaded guilty to one count of wire fraud and two counts of falsification of federal records for knowingly submitting 137 falsified dealer reports from May 2009 through December 2011, and 70 falsified fishing logs, known as fishing vessel trip reports (FVTRs), from May 2011 through December 2011, as part of a scheme to defraud the United States of overharvested and underreported fluke.  The fish dealer, C&C Ocean Fishery Ltd., pleaded guilty to one count of wire fraud and three counts of falsification of federal records for its participation in the scheme, which included aiding and abetting the submission of falsified dealer reports and FVTRs.

As part of the plea deal, the defendants agreed to pay between $480,000 and $516,000 in combined fines and forfeitures.  The defendants also agreed to multiple sentence conditions, including relinquishment of federal fishing permits, a ban on participation in the Research Seat-Aside Program, divestiture of any interest in the F/V Norseman, and shutting down the company, C&C Ocean Fishery Ltd.   The court will hear sentencing recommendations at a hearing set for Nov. 22, 2013.

“Protecting the integrity of the Research Set Aside program supports the goal of ensuring sustainable fisheries for future generations,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “When individuals like the defendant willfully defraud the government in order to turn a larger profit for themselves they are also cheating their fellow fishermen who choose to play by the rules.  Today’s plea demonstrates that we will hold those who break the rules accountable and make sure that this valuable resource remains available to everyone.”

“Our office takes these violations very seriously,” said Logan Gregory, Special Agent in Charge of the National Oceanic and Atmospheric Administration (NOAA) Office of Law Enforcement's Northeast Division. “This type of illegal activity has a ripple effect on seafood markets and impacts fishing communities by driving down the price of fluke which reduces the potential profits of fishermen and dealers who abide by the regulations.  We hope the outcome of this case deters others from coming up with similar schemes to circumvent federal fisheries laws and regulations and from gaining an unfair advantage over those who comply with the regulations.”

Under NOAA regulations, all of the Norseman’s catch had to be reported to NOAA on FVTRs.  During the years 2009, 2010, and 2011, the Norseman principally targeted fluke.  However, on multiple occasions the vessel exceeded its relevant federal and New York State quotas for fluke for 137 trips, totaling 86,080 pounds of fluke worth approximately $200,000. 
 
In order to cover up the illegal fluke harvesting, the operators of the Norseman falsified the FVTRs that were submitted to NOAA.  For each of the 137 trips, a false FVTR was submitted.  During 2009 and 2010, another individual submitted the false FVTRs, but by May 2, 2011, Mr. Wertz was falsifying and submitting the FVTRs himself.  The defendants were aware that the FVTRs were utilized by NOAA as part of the administration of its statutory-mandated fisheries management program.

C&C Ocean was not only aware of the false Norseman FVTRs, but it aided and abetted the perpetration of the FVTR scheme through its preparation of federal dealer reports.  As a federal dealer, C&C Ocean was required to prepare and submit federal dealer reports to NOAA.  The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price, and weight. In order to cover up the overharvesting that occurred on the water, C&C Ocean’s dealer report had to match the catch data that was submitted on the corresponding FVTR.  In other words, if the FVTR falsely underreported the Norseman’s catch of fluke, then the scheme would likely be detected unless the corresponding dealer report was similarly falsified.  Both defendants prepared and submitted false dealer reports for each of the trips set forth in the table.  
            
The defendants electronically submitted the 137 false dealer reports from Wertz’s desktop computer in New York, through an out-of-state internet server, to NOAA’s Regional Fisheries Administrator in Gloucester, Mass. 
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police.  The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.

Related Materials:

Wertz Plea Agreement
C&C Plea Agreement

The Justice Department announced today that it has entered into a comprehensive agreement with the Parish of St. Tammany, La., and the St. Tammany Parish Sheriff  to correct conditions of confinement at the St. Tammany Parish Jail and to ensure that improvements made since the Department’s investigation will be maintained.  The St. Tammany Parish Jail is located in Covington, La., and houses approximately 1,000 adult male and female prisoners.   The jail is staffed by approximately 225 sworn law enforcement officers and civilian employees. 

The agreement outlines significant remedial measures to address deficiencies in correctional mental health care and suicide prevention.  Under the terms of the agreement, St. Tammany will work to ensure that prisoners are safe and receive care and services necessary to meet their constitutional rights.  The agreement underscores the Parish’s obligation to protect prisoners the substantial risk of serious harm.

“We commend Sheriff Jack Strain, St. Tammany Parish President Patricia Brister, and other St. Tammany officials for their willingness to work aggressively to address the problems identified during the course of our investigation,” said Jocelyn Samuels, Acting Assistant Attorney General, Civil Rights Division. “Based on the productive relationship we have established to date, we expect to continue to work cooperatively with St. Tammany to improve conditions of confinement at this facility.”

In April 2011, the Justice Department initiated its investigation of the St. Tammany Jail under the Civil Rights of Institutionalized Persons Act (CRIPA).  The Department issued its findings in July 2012, concluding that certain conditions at St. Tammany violated prisoners’ constitutional rights to adequate mental health care, including adequate suicide prevention. 

Today’s agreement comprehensively addresses the department's findings through an in-depth focus on the systemic problems that caused the unconstitutional conditions at the jail.  The agreement also builds on improvements made by St. Tammany during the department’s investigation, most notably the removal of small booking cages that had been used for the confinement of suicidal prisoners and the construction of a specialized housing unit to manage and monitor prisoners in mental health crisis. The agreement requires:

• Improved screening and assessments of prisoners with serious mental health needs.

• Adequate and timely mental health treatment for prisoners, including group or individual therapy services, better monitoring when medication is administered to prisoners and follow-up and crisis services.

• Improved suicide precautions.

• Enhanced staff training on mental health and suicide prevention.

• The collection and tracking of data to identify triggers and trends involving suicide and self-injurious behavior, with the goal of preventing or reducing further incidents.

• The appointment of an independent auditor, jointly selected by St. Tammany and the department, with expertise in the areas covered by this agreement.  As part of overseeing the implementation of the agreement, the independent auditor will periodically inspect the facility for compliance and provide technical assistance to St. Tammany staff.

CRIPA authorizes the Attorney General to investigate conditions of confinement in certain institutions owned or operated by, or on behalf of, state and local governments.  In addition to adult and juvenile correctional facilities, these institutions include psychiatric hospitals, nursing homes and residential facilities serving persons with developmental disabilities.  CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems.  Please visit http://www.justice.gov/crt to learn more about CRIPA and other laws enforced by the Justice Department’s Civil Rights Division

The investigation of the St. Tammany Parish Jail was conducted by Corey M. Sanders, Trial Attorney in the Special Litigation Section of the Civil Rights Division.

Related Material:

            Findings Letter: http://www.justice.gov/crt/about/spl/documents/tammany_findings_7-12-12.pdf

Bradley Eberhart, 51, of Garden Valley, Idaho, and Douglas Greiner, 53, of Eagle, Idaho, were sentenced this week in federal court for violating the asbestos work practice standards of the Clean Air Act, announced Robert G. Dreher, Acting Assistant Attorney General for Environment and Natural Resources Division, and Wendy J. Olson, U.S. Attorney for the District of Idaho. 

U.S. District Judge Edward J. Lodge sentenced Eberhart on Monday to six months in prison plus six months of home confinement, followed by six months of supervised release, 200 hours of community service, and restitution of $3.98 million, in joint and several liability.  Greiner was also sentenced to six months in prison and six months of home confinement, to be followed by six months of supervised release.  The amount of restitution by Greiner will be the subject of further briefing by the parties.

Both defendants previously pleaded guilty on Feb. 26, 2013.

Boise-based Owyhee Construction Inc., was the successful bidder on a $2.1 million waterline renovation project in Orofino, Idaho, a rural community in north central Idaho.  Greiner was the project superintendent and Eberhart was the onsite supervisor of the project.  The contract documents warned Owyhee Construction that the company may encounter up to 5,000 linear feet of cement asbestos pipe (CAP) during the renovation.  CAP is a non-friable form of asbestos that is encapsulated in a cement matrix.  When the CAP is broken or crushed by heavy equipment or subjected to cutting and grinding by machinery it becomes subject to regulation because of the threat to public health from airborne fibers.

Eberhart and Greiner failed to properly supervise the renovation.  Eberhart supervised employees who were not properly trained in asbestos work and were not properly outfitted with protective gear while cutting CAP with saws.  While working in the trenches to replace pipe, workers would remove CAP from the trenches, crush it and then place it back in the trenches.  Large quantities of CAP were also removed from the trenches and ended up as fill material on sixteen properties around Orofino.  Greiner pleaded guilty to orchestrating one of the disposals.  The EPA cleanup cost just under $4 million.
 
“These prison sentences reflect the serious consequences of the failure of these defendants to comply with EPA’s regulations that protect public health from asbestos, a human carcinogen,” said Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division.  “Such criminal acts endanger workers and the community and can, as demonstrated here, cost the federal government millions of dollars to cleanup.  The Justice Department will continue to vigorously prosecute these crimes.”

“This case demonstrates the commitment of law enforcement and the Department of Justice to ensure the health of our residents,” said U.S. Attorney Olson.  “Threats to the environment and to public health may not be readily apparent from a construction project.  Renovation projects like these often generate dust with fine asbestos particles that may have the potential to cause serious health and environmental problems if safety precautions are not taken.  The full extent of injury from airborne asbestos may not be noticed or diagnosed for years.  It is important that companies, their foremen and their operators comply with environmental laws to avoid serious harm.”

“These two Defendants carelessly subjected Orofino residents to asbestos exposure,” said Tyler Amon, Special Agent in Charge of EPA’s Criminal Investigation Division in Seattle.  “In the course of their enterprise, they also created sixteen separate asbestos disposal sites that threatened the community, jeopardized workers and cost taxpayers $4 million to cleanup.  Today’s sentence sends a clear message: if you risk people’s lives to save time and money, you will pay the price.”

The case was investigated by the U.S. Environmental Protection Agency.  The case was prosecuted by Assistant U.S. Attorney D. Marc Haws from the District of Idaho and Senior Trial Attorney J. Ronald Sutcliffe of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.

Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, and Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, jointly announced today that James S. Faller II, of Russell Springs, Ky., was indicted by a federal grand jury in Bowling Green, Ky.  Faller, a consultant and private investigator, is charged in an eleven count indictment with obstructing the internal revenue laws, evading his individual income taxes, making and subscribing to a false form that he filed with the Internal Revenue Service (IRS) and failing to file his individual income tax returns. 

The indictment alleges that Faller obstructed the IRS’s ability to collect payment of a substantial penalty he owed to the government and the IRS’s ability to identify his income from 2006 through 2009.  According to the indictment, Faller evaded the payment of a $216,000 penalty related to unpaid employment taxes of Call Center Communications Inc., of which Faller was the president.  In addition, Faller was charged with evading his individual income taxes from 2006 through 2009.  He allegedly failed to report more than $960,000 of income during this four-year period and committed various affirmative acts of evasion.

Faller faces a maximum punishment of three years in prison for the charge of obstructing the internal revenue laws; five years for each count of evading his individual income taxes; three years for making and subscribing to a false form that he filed with the IRS; and one year for each count of failing to file his individual income tax returns.  He faces a maximum fine of $100,000 on each count of failing to file his income tax returns and $250,000 for each of the other counts.  An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

The case resulted from an investigation by special agents of the IRS - Criminal Investigation.  Tax Division Trial Attorney Thomas Voracek and Assistant U.S. Attorney Lee Gentry are prosecuting the case.

The Justice Department today reached an agreement with SOS Employment Group, based in Salt Lake City resolving claims that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA).

The department’s investigation confirmed allegations made by a work-authorized individual that SOS Employment Group had, at both initial hire and when subsequently re-verifying the refugee’s employment authorization, rejected the employee’s valid driver’s license and unrestricted Social Security card and required him to produce a Department of Homeland Security Employment Authorization Document (EAD).  The department’s investigation further determined that SOS Employment’s documentary demands were based on the individual’s status as a non-U.S. citizen.  The anti-discrimination provision of the INA, prohibits employers from using discriminatory documentary policies, procedures or requirements based on citizenship status or national origin when initially determining or subsequently re-verifying an employee’s authorization for employment.

Under the terms of the settlement agreement, SOS Employment Group has agreed to pay $9,157.50 in back pay to the victim and $1,200 in civil penalties to the United States, undergo Justice Department training on the anti-discrimination provision of the INA and be subject to monitoring of its employment eligibility verification practices for a period of one year.  

“The INA’s anti-discrimination provision requires that the statute’s employment eligibility verification requirements be implemented in a nondiscriminatory manner without regard to citizenship status or national origin,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights.  “The Civil Rights Division is fully committed to vigorously enforcing this important component of the INA.”

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA.  For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired), sign up for a no-cost webinar at www.justice.gov/about/osc/webinars.php , email osccrt@usdoj.gov or visit the website at www.justice.gov/crt/about/osc

The Justice Department announced today that it reached an agreement with Forever 21 resolving allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA) when it rejected a work-authorized individual’s Department of Homeland Security-issued Employment Authorization Document (EAD), and required her to produce a Permanent Resident Card (commonly known as a “Green Card”) as a condition of employment.  The individual, who was employment-authorized as an applicant for permanent residence, was unable to work following the rejection of her EAD.  The anti-discrimination provision of the INA prohibits employers from discriminating in the employment eligibility verification process by demanding specific documents or rejecting acceptable documents based on citizenship status or national origin.

Under the terms of the settlement agreement, Forever 21 has agreed to pay $1705.50 in back pay to the individual and $280 in civil penalties to the United States, undergo Justice Department training on the anti-discrimination provision of the INA and be subject to monitoring of its employment eligibility verification practices for a period of one year.  

“The INA’s anti-discrimination provision requires that the INA’s employment eligibility verification requirements be implemented in a nondiscriminatory manner without regard to citizenship status or national origin,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights.  “The Civil Rights Division is fully committed to vigorously enforcing the anti-discrimination provision’s protections against discriminatory documentary practices.” 

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA.  For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired), sign up for a free webinar at www.justice.gov/about/osc/webinars.php , email osccrt@usdoj.gov or visit the website at www.justice.gov/crt/about/osc

The Justice Department and U.S. Attorney for the District of Delaware Charles M. Oberly III announced today the filing of a lawsuit alleging that Regal Contractors LLC, Regal Builders LLC and Noble Pond Homes willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by terminating U.S. Air Force Reserve Member Lon Fluman following his return from required military training with his reserve unit.

Fluman is a Senior Airman with the U.S. Air Force Reserve serving with the 712th Aircraft Maintenance Squadron at Dover Air Force Base. According to the complaint, filed in the U.S. District Court for Delaware, Fluman was scheduled for reserve military duty to begin on Sept. 3, 2012 but was rescheduled on short notice to start one day later. Subsequently, Fluman served weekend reserve duty in early December of 2012. Following his second duty, the defendants terminated Fluman from his position as a maintenance technician. Although Fluman satisfied USERRA’s notification requirements before departing for his military leaves, according to the complaint, the defendants terminated Fluman anyway, claiming the notice provided was not sufficient.

USERRA explicitly protects the rights of members of the uniformed services to retain their employment following absences due to military service obligations. “Congress enacted USERRA to protect our men and women in uniform from experiencing this kind of injustice,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our servicemembers.”

“Members of the Air Force Reserve sacrifice time away from their jobs to serve their country,” said U.S. Attorney Oberly. “USERRA ensures that they are not discriminated against and that their employment rights are protected.”

This case stems from a referral by the U.S. Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service. The case is being handled by the Civil Rights Division and the U.S. Attorney’s Office for the District of Delaware, who work collaboratively with the Department of Labor to protect the jobs and benefits of National Guard and Reserve servicemembers upon their return to civilian life.

Additional information about USERRA can be found on the Justice Department website: w ww.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.

U.S. Attorney General Eric Holder, U.S. Attorney for the Southern District of New York Preet Bharara and Assistant Director-in-Charge of the FBI’s New York Field Office George Venizelos announced the unsealing of criminal complaints against Javier Martin-Artajo and Julien Grout for their alleged participation in a conspiracy to hide the true extent of losses in a credit derivatives trading portfolio maintained by the Chief Investment Office (CIO) of JPMorgan Chase & Company (JPMorgan).  Martin-Artajo served as a Managing Director and Head of Credit and Equity Trading for the CIO, and Grout was a Vice President and derivatives trader in the CIO. 

“Our financial system has been hurt in recent years not just by risky bets gone bad, but also, in some cases, by criminal wrongdoing,” said Attorney General Holder.  “We will not stop pursuing those who violate the public trust and compromise the integrity of our markets. I applaud U.S. Attorney Bharara, his colleagues in the Southern District of New York, and all of our partners on the President’s Financial Fraud Enforcement Task Force for their longstanding commitment to combating all forms of financial fraud. And I pledge that we will continue to move both fairly and aggressively to bring the perpetrators of financial crimes to justice.”

“As alleged, the defendants, Javier Martin-Artajo and Julien Grout, deliberately and repeatedly lied about the fair value of billions of dollars in assets on JPMorgan's books in order to cover up massive losses that mounted month after month at the beginning of 2012, which ultimately led JPMorgan to restate its losses by $660 million,” said U.S. Attorney Bharara.   “The defendants’ alleged lies misled investors, regulators, and the public, and they constituted federal crimes.  As has already been conceded, this was not a tempest in a teapot, but rather a perfect storm of individual misconduct and inadequate internal controls.  The difficulty inherent in precisely valuing certain kinds of financial positions does not give people a license to lie or mislead to cover up losses; it does not confer a license to create false books and records or to make false public filings.  And that goes double for handsomely-paid executives at a public company whose actions can roil markets and upend the economy.”

“The complaints tell a story of a group of traders who got in over their heads, and to get out, doubled down on a series of risky positions,” said FBI Assistant Director-in-Charge Venizelos.  “In the first quarter of 2012, boom turned to bust, as the defendants, concerned about losing control to other traders at the bank, fudged the numbers on their daily book, and in some cases completely made them up.  It brought a whole new meaning to cooking the books.” 
 In a separate action, the U.S. Securities and Exchange Commission (SEC) announced civil charges against Martin-Artajo and Grout.

According to the allegations in the criminal complaints unsealed today in Manhattan federal court:

JPMorgan’s CIO, is a component of the bank’s Corporate/Private Equity line of business, which, according to the bank, exists to manage the bank’s excess deposits – approximately $350 billion in 2012.  Since approximately 2007, the CIO’s investments have included a so-called Synthetic Credit Portfolio (SCP), which consists of indices and tranches of indices of credit default swaps (CDS).  A credit default swap is essentially an insurance contract on an underlying credit risk, such as corporate bonds.  CDS indices are collections of CDSs that are traded as one unit, while CDS tranches are portions of those indices, usually sliced up by riskiness.

Under U.S. Generally Accepted Accounting Principles (GAAP) and according to JPMorgan policy, CDS traders were required to value the securities in their portfolios on a daily basis.  Those values, or “marks,” became part of the bank’s daily books and records.  Because CDS indices and tranches are not traded over an exchange, traders are required to look to various data points in order to value their securities, such as actual transaction prices, price quotations from market makers, and values provided by independent services (such as Totem and MarkIT).   JPMorgan’s accounting policy, which used the same methodology employed by the independent services, provided that the “starting point for the valuation of a derivatives portfolio is mid-market,” meaning the mid-point between the price at which market-makers were willing to buy or sell a security.  Through about January 2012, CIO traders generally marked the securities in the SCP approximately to this mid-point, which they sometimes referred to as the “crude mid.”

The SCP was extremely profitable for JPMorgan – it produced approximately $2 billion in gross revenues since its inception – but in the first quarter of 2012, the SCP began to sustain consistent and considerable losses.  From at least March 2012, Martin-Artajo and Grout conspired to artificially manipulate the SCP marks to disguise those losses.  They did so, among other reasons, to avoid losing control of the SCP to other traders at JPMorgan. 

Although Martin-Artajo pressured his traders, including Grout, to “defend the positions” in early 2012 by executing trades at favorable prices, the SCP lost approximately $130 million in January 2012 and approximately $88 million in February 2012.  In March 2012, when the market moved even more aggressively against the CIO’s positions, Martin-Artajo specifically instructed Grout and the head SCP trader, Bruno Iksil (who has entered a non-prosecution agreement), not to report losses in the SCP unless they were tied to some identifiable market event, such as a bankruptcy filing by a company whose bonds were in the CDS index.  Martin-Artajo explained that “New York” – meaning, among others, JPMorgan’s Chief Investment Officer – did not want to see losses attributable to market volatility.

By mid-March 2012, Grout was explicitly and admittedly “not marking at mids.”  He maintained a spreadsheet that kept track of the difference between the price that Grout recorded in JPMorgan’s books and records, on the one hand, and the “crude mids,” on the other.  By March 15, 2012, according to Grout’s spreadsheet, the difference had grown to approximately $292 million.  In a recorded on-line chat the same day, Grout explained that he was trying to keep the marks for most of the SCP’s positions “relatively realistic,” with the marks for one particular security “put aside.”  That is, Grout mispriced that one particular security, of which the SCP held billions of dollars’ worth, by the full $292 million.  The following day, Iksil told Martin-Artajo that the difference had grown to $300 million, and “I reckon we get to 400 [million] difference very soon.”  In a separate conversation, Iksil remarked to Grout that “I don’t know where he [Martin-Artajo] wants to stop, but it’s getting idiotic.”

In the days that followed, Grout at times ignored Iksil’s instructions on how to mark the positions, and instead, followed Martin-Artajo’s mandate to continue to hide the losses.  By March 20, 2012, Iksil insisted that Grout show a significant loss: $40 million for the day.  In a recorded call, Martin-Aartajo excoriated Iksil, finally emphasizing, “I didn’t want to show the P&L [the profit and loss].”  Throughout the remainder of March 2012, while Iksil continued to try to insist that Martin-Artajo acknowledge the reality of the losses, Grout, at Martin-Artajo’s instructions, continued to hide them.  As of March 30, 2012 – the last day of the first quarter of 2012 – Grout continued to fraudulently understate the SCP’s losses.  These incorrect figures in the SCP were not only integrated into JPMorgan’s books and records, but also – as Martin-Artajo and Grout were well aware – into the bank’s quarterly financial filing for the first quarter of 2012 with the SEC.

During the course of the mis-marking scheme carried out by Martin-Artajo and Grout, the CIO’s Valuation Control Group (VCG) was supposed to serve as an independent check on the valuations assigned by traders to the securities that the traders were marking at month-end.  The VCG, however, was effectively only staffed by one person and did not perform any independent review of the valuations.  Instead, the VCG tolerated valuations outside of the bid-offer spread as presented by Martin-Artajo and other CIO traders.  

In Aug. 2012, after Martin-Artajo and Grout were stripped of their responsibilities over the SCP and their scheme was discovered, JPMorgan restated its first quarter 2012 earnings, and recognized an additional loss of $660 million in net revenue attributable to the mis-marking of the SCP.  JPMorgan announced that it was restating its earnings because it had lost confidence in the “integrity” of the marks submitted by Grout, at Martin-Artajo’s direction. 

Martin-Artajo, 49, a Spanish citizen, and Grout, 35, a French citizen, are charged in one count of conspiracy; one count of falsifying the books and records of JPMorgan; one count of wire fraud; and one count of causing false statements to be made in JPMorgan’s filings with the SEC.  They each face a maximum sentence of five years in prison on the conspiracy count, and 20 years in prison on each of the three remaining counts in the complaints, and a fine of the greater of $5,000,000 or twice the gross gain or gross loss as to certain of the offenses.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group.  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. 

The case was investigated by the FBI.  The SEC and the Justice Department’s Office of International Affairs were also involved.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Eugene Ingoglia and Matthew L. Schwartz are in charge of the prosecutions.

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

A Jamaican citizen charged in connection with the operation of a fraudulent lottery was arrested Tuesday in Orlando, Fla., following his indictment by a federal grand jury in Fort Lauderdale, Fla., on Aug. 9, 2012, the Justice Department, U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and U.S. Marshals Service announced today.  Oneike Mickhale Barnett was arrested based on charges that he and his co-conspirators ran a lottery scam in Jamaica that fraudulently induced elderly victims in the United States to send them thousands of dollars to cover fees for lottery winnings that victims had not in fact won.  The indictment unsealed with Barnett’s arrest forms part of the government’s crackdown on fraudulent lottery scams based in Jamaica.

Beginning in October 2008, Barnett and his co-conspirators are alleged to have contacted victims in the U.S., announced that the victims had won cash and prizes and persuaded the victims to send them thousands of dollars in fees to release the money.  The victims never received cash or prizes.  The defendant and his co-conspirators allegedly made calls from Jamaica using Voice Over Internet Protocol technology that allowed them to use a telephone number with a U.S. area code.  According to the indictment, Barnett convinced victims to send money to middlemen in South Florida, who forwarded the money to Jamaica.

“Lottery scams that target older Americans, such as the one alleged here, are the most pernicious kind of fraud – often swindling seniors out of their life savings,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “The Justice Department will continue to combat these schemes and bring those responsible to justice.”

 “The alleged lottery scheme in this case is most vile because it targeted the elderly, one of the most vulnerable members in our society,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida.  “While the scam was based in Jamaica, it targeted victims in the United States, including South Florida.  We will continue to pursue and prosecute those responsible for these illegal schemes in an effort to bring those responsible to justice and protect those in our society.” 

Barnett was charged with conspiracy and 37 counts of wire fraud, and with committing these offenses via telemarketing.  If convicted, he faces a statutory maximum sentence of 30 years per count, a possible fine and mandatory restitution.

“This arrest highlights the joint effort between U.S. and Jamaican law enforcement to prosecute those who prey on our nation’s senior citizens,” said U.S. Postal Inspector in Charge for the Miami Division Ronald Verrochio.  “The mission of the Postal Inspection Service is to protect consumers by ensuring the nation’s mail system is not used as a tool for fraud.” 

Special Agent in Charge for Homeland Security Investigations in Miami Alysa D. Erichs added, “These individuals are preying on some of the most vulnerable members in our communities.  We will continue to work with our partners in Jamaica and other law enforcement agencies to put these criminal enterprises out of business.”  

Acting U.S. Marshal Neil DeSousa said, “The U.S. Marshals Service in the Southern District of Florida, along with the Jamaica Foreign Field Office and the Organized Crime Drug Enforcement Task Force, remain committed to locating and apprehending criminals who defraud elderly Americans.  We will continue to work with the U.S. Postal Inspection Service and Department of Homeland Security on the JOLT task force in the ongoing effort to combat lottery fraud targeting some of our most vulnerable citizens.”

U.S. Attorney Ferrer and Assistant Attorney General Delery both commended the investigative efforts of the U.S. Postal Inspection Service, Homeland Security Investigations, the U.S. Marshals Service and Jamaica’s Major Organized Crime and Anti-Corruption Task Force.  The case is being prosecuted by Assistant U.S. Attorney Bertha Mitrani and Consumer Protection Branch, Civil Division attorneys Jeffrey Steger and Kathryn Drenning.

An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.

WASHINGTON—A Florida-based airline fuel supply service company and its former owner and operator were indicted yesterday on charges of participating in a scheme to defraud Illinois-based Ryan International Airlines, the Department of Justice announced.

A federal grand jury in the U.S. District Court for the Southern District of Florida in West Palm Beach, Fla., returned an indictment against Sean E. Wagner and his company Aviation Fuel International Inc. (AFI), an airline fuel supply company. The indictment alleges that Wagner and AFI participated in a conspiracy to defraud Ryan, a charter airline company based in Rockford, Ill., by making kickback payments to Wayne Kepple, a former vice president of ground operations for Ryan, in exchange for awarding business to AFI. Wagner was arrested on July 19, 2013, in Weston, Fla., on a one-count criminal complaint in connection with these charges.

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

The indictment alleges, among other things, that from at least as early as December 2005 through at least August 2009, Wagner, AFI and others made kickback payments totaling more than $200,000, in the form of checks, wire transfers, cash and gift cards, to Kepple while working at Ryan.

“The conspirators traded contracts for kickbacks and took affirmative steps to hide their illegal scheme, including wiring payments to personal bank accounts and making secret cash payments,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will continue to aggressively prosecute companies and individuals that seek to defraud the government and U.S. taxpayers by thwarting the competitive process.”

Wagner and AFI are charged with one count of conspiracy to commit wire fraud and honest services fraud, as well as two counts of wire fraud and two counts of mail fraud. Each count carries a maximum sentence of 20 years in prison and a $250,000 criminal fine for individuals and a $500,000 criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum fine.

As a result of this ongoing investigation, four individuals have pleaded guilty to date. Three of the individuals have been ordered to serve sentences ranging from 16 to 24 months in prison and to pay more than $220,000 in restitution. The fourth individual, Kepple, pleaded guilty and is currently awaiting sentencing.

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

Chequlia Motley of Montgomery, Ala., was sentenced yesterday to serve 36 months in prison for conspiracy and aggravated identity theft,  announced Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.  Motley pleaded guilty to those charges in May 2013.

According to Motley’s plea agreement, she was a former state employee who stole identities from state databases and sold them to co-conspirators.  As evidence presented at the sentencing hearing showed, Motley had previously worked for the Alabama State Employees’ Insurance Board and stole the personal information of over 100 state workers and their family members from the databases maintained by the board.  She provided this information to Veronica Temple, Yolanda Moses and Barbara Murry, who used the stolen identities to file false tax returns that fraudulently requested tax refunds from the IRS.  Temple, Moses and Murry were previously convicted and each sentenced in February to 57 months in prison.   

In addition to the prison sentence, Motley was ordered to pay $179,946 in restitution to the Internal Revenue Service (IRS).

The case was investigated by agents of the IRS - Criminal Investigation.  Trial Attorneys Michael Boteler and Jason Poole of the Justice Department’s Tax Division prosecuted the case, with the assistance of the U.S. Attorney’s Office for the Middle District of Alabama and, in particular, Assistant U.S. Attorney Todd Brown.

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

Michael Kerry Deevy, a Canadian citizen, was sentenced today in connection with a series of business opportunity fraud ventures based in Costa Rica, the Justice Department and the U.S. Postal Inspection Service announced.  Beginning in 2006, Deevy and his co-conspirators in Costa Rica are alleged to have fraudulently induced purchasers in the U.S. to buy business opportunities from companies known as Cards-R-Us Inc., Premier Cards Inc. and Nation West.  The business opportunities cost purchasers thousands of dollars each, with most paying at least $10,000.  Today’s sentencing forms part of the government’s continued nationwide crackdown on business opportunity fraud.

“Business opportunity fraud schemes such as this one can crush the dreams – and wipe out the savings – of Americans who simply want to operate their own small businesses,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “The Department of Justice will continue to prosecute those who engage in these schemes, whether they set up shop here or abroad.” 

“Business opportunity schemes target believers in a system that rewards those who are willing to sacrifice and work hard in the hope of getting ahead,” said U.S. Attorney for the Southern District of Florida Wifredo Ferrer.  “In this particular case, the business opportunity fraud ventures were based in Costa Rica and targeted purchasers in the United States, including South Florida.  Today’s sentence will hopefully send a message to those who are contemplating engaging in schemes such as this that, no matter where you are, we will pursue and prosecute you and bring you to justice for these illegal schemes.”

Deevy was sentenced by U.S. District Court Judge Patricia A. Seitz in Miami to 60 months in prison and 5 years’ supervised release.  Deevy also was ordered to pay $4,541,914 in restitution.  Prior to Deevy’s sentencing today, 11 other individuals were charged in connection with related business opportunity fraud ventures based in Costa Rica.  Deevy is the ninth of those individuals to be convicted and sentenced in the U.S.

On April 11, Deevy pleaded guilty to one count of conspiracy, three counts of mail fraud and nine counts of wire fraud in connection with the business opportunity scheme.  Deevy was arrested in Costa Rica in 2011 and extradited to the U.S. in 2012 following his indictment by a federal grand jury in Miami on Nov. 29, 2011.  The indictment alleged that Deevy and his co-conspirators purported to sell greeting card and vending machine business opportunities, including assistance in establishing, maintaining and operating these businesses.  Each company operated for several months, and after one company closed, another one opened. 

Co-conspirators at the companies made numerous false statements to potential purchasers of the business opportunities.  They indicated that purchasers likely would earn substantial profits; prior purchasers of the business opportunities were earning substantial profits; purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the companies worked with third party “locators” familiar with the potential purchasers’ areas who would secure, or had already secured, high-traffic locations for the prospective buyers’ merchandise display racks or machines. 

In addition to these “locators,” the companies also employed various other types of sales representatives, including fronters, references and closers.  Fronters spoke to prospective purchasers when they initially contacted the company in response to an advertisement.  References told potential buyers that they had purchased one of the business opportunities and were making a profit.  Closers subsequently spoke to potential purchasers to finalize deals.  In pleading guilty, Deevy admitted that he was a fronter and reference for Cards-R-Us Inc., Premier Cards Inc. and Nation West.

“This investigation shows the resolve of the U.S. Postal Inspection Service to protect the American public from predatory business opportunity frauds,” said Ronald Verrochio, U.S. Postal Inspector in Charge, Miami Division.  “We will continue to work with our law enforcement partners in the United States and overseas to root out these schemes.” 

Assistant Attorney General Delery commended the investigative efforts of the U.S. Postal Inspection Service.  The case was prosecuted by Assistant Director Jeffrey Steger and Trial Attorney Alan Phelps with the Consumer Protection Branch of the U.S. Department of Justice’s Civil Division. 

The Justice Department today announced a settlement of its lawsuit alleging that Highland Management Group Inc., Edina Park Apartments LLC, and Amy Koch violated the Fair Housing Act (FHA) by discriminating against Somali prospective renters at Edina Park Apartments in Edina, Minn. a suburb of Minneapolis.  After filing the complaint earlier today, the department submitted the settlement to U.S. District Court Judge Susan R. Nelson, in the form of a proposed consent decree.

The case originated based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as prospective renters to gather information about possible discriminatory practices.  The testing uncovered evidence that Amy Koch, who was the then property manager at Edina Park Apartments, showed white testers apartments when they walked in while she told Somali testers they had to make an appointment to see an apartment the next day.  She also failed to tell Somali testers about certain apartments becoming available that she mentioned to white testers.  Amy Koch was an employee of Highland Management Group, Inc.

“Treating people differently because of their race or national origin when they are looking for a place to live is a fundamental affront to American values,” said Acting Assistant Attorney General Jocelyn Samuels. “This settlement demonstrates that the Civil Rights Division Housing Testing Program is an important tool in combating discrimination.”

Under the settlement, Highland Management Group Inc. and Edina Park Apartments must pay $30,000 to the government as a civil penalty.  The settlement also requires Highland Management Group, Inc. and Edina Park Apartments to maintain a nondiscrimination policy, provide employees with training on the requirements of the Fair Housing Act and provide periodic reports to the government.

U.S. Attorney B. Todd Jones said, “Everyone has the right to expect equal treatment under the law when searching for housing. The U.S. Department of Justice and the U.S. Attorney’s Office will work tirelessly to ensure that all people are treated fairly when attempting to secure housing for themselves and their families. It is what the good citizens of Minnesota expect and deserve.”

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or email the Justice Department at fairhousing@usdoj.gov.  Such persons may also contact the U.S. Department of Housing and Urban Development at 1-800-669-9777. 

Fair housing enforcement is a priority of the Civil Rights Division.  More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt.

The Justice Department announced today that the Townhomes of Kings Lake HOA Inc. (HOA) and Vanguard Management Group Inc. have agreed to pay $150,000 to settle a lawsuit alleging violations of the Fair Housing Act (FHA).  The lawsuit alleged that the HOA adopted and both defendants enforced occupancy limits that discriminated against families with children at the Townhomes of Kings Lake, a 249-townhome community in Gibsonton, Fla.

Under the proposed consent decree, which must still be approved by the U.S. District Court for the Middle District of Florida, the defendants will pay $45,000 to the family that initiated the original complaint filed with the U.S. Department of Housing and Urban Development (HUD), $85,000 into a victim fund to compensate other aggrieved families, and $20,000 to the United States as a civil penalty.  In addition, the proposed consent decree prohibits the defendants from discriminating in the future against families with children and requires the defendants to receive training on the requirements of the FHA.  In January 2013, while the lawsuit was pending, the HOA modified its occupancy limits to permit four occupants in 2-bedroom townhomes, six occupants in 3-bedroom townhomes, and eight occupants in 4-bedroom townhomes.

“The Fair Housing Act ensures that families with children are not denied their housing rights based on discriminatory occupancy policies,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously enforce fair housing laws that protect the rights of families with children.”

The lawsuit, filed in October 2012, arose from a complaint filed with HUD by a family with six children that was living at the Townhomes of Kings Lake.  After the family moved into their 4-bedroom townhome, the defendants indicated there was a problem with the number of people living in the home and threatened to evict the family.  The family eventually moved out of the Kings Lake community.  After HUD investigated the complaint, it issued a charge of discrimination and referred the matter to the Justice Department.  The lawsuit alleged that the defendants violated the family’s rights, that the restrictive occupancy policies discriminated against other families with children, and that the defendants engaged in a pattern or practice of discrimination or denied rights protected by the FHA to a group of persons.

“Twenty-plus years of HUD guidance and cases have put housing providers on notice that occupancy standards which unfairly limit or exclude families with children violate the Fair Housing Act,” said Bryan Greene, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice are committed to making sure that all people have equal access to the housing for which they financially qualify.”

Individuals who believe they or other individuals they know were victims of housing discrimination as a result of the former occupancy policies at the Townhomes of Kings Lake should contact the Housing and Civil Enforcement Section of the Civil Rights Division at 1-800-896-7743, mailbox number 9994, or by sending an email to fairhousing@usdoj.gov .

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

The Department of Justice, six state attorneys general and the District of Columbia filed a civil antitrust lawsuit today challenging the proposed $11 billion merger between US Airways Group Inc. and American Airlines’ parent corporation, AMR Corp.  The department said that the merger, which would result in the creation of the world’s largest airline, would substantially lessen competition for commercial air travel in local markets throughout the United States and result in passengers paying higher airfares and receiving less service. 

The Department of Justice’s Antitrust Division, along with the attorneys general, filed a lawsuit in the U.S. District Court for the District of Columbia, which seeks to prevent the companies from merging and to preserve the existing head-to-head competition between the firms that the transaction would eliminate. The participating attorneys general are: Texas, where American Airlines is headquartered; Arizona, where US Airways is headquartered; Florida; the District of Columbia; Pennsylvania; Tennessee; and Virginia.

 
“Airline travel is vital to millions of American consumers who fly regularly for either business or pleasure,” said Attorney General Eric Holder. “By challenging this merger, the Department of Justice is saying that the American people deserve better. This transaction would result in consumers paying the price – in higher airfares, higher fees and fewer choices. Today’s action proves our determination to fight for the best interests of consumers by ensuring robust competition in the marketplace.”

 
Last year, business and leisure airline travelers spent more than $70 billion on airfare for travel throughout the United States. In recent years, major airlines have, in tandem, raised fares, imposed new and higher fees and reduced service, the department said.

“The department sued to block this merger because it would eliminate competition between US Airways and American and put consumers at risk of higher prices and reduced service,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “If this merger goes forward, even a small increase in the price of airline tickets, checked bags or flight change fees would result in hundreds of millions of dollars of harm to American consumers. Both airlines have stated they can succeed on a standalone basis and consumers deserve the benefit of that continuing competitive dynamic.”

 
American and US Airways compete directly on more than a thousand routes where one or both offer connecting service, representing tens of billions of dollars in annual revenues. They engage in head-to-head competition with nonstop service on routes worth about $2 billion in annual route-wide revenues. Eliminating this head-to-head competition would give the merged airline the incentive and ability to raise airfares, the department said in its complaint.

 
According to the department’s complaint, the vast majority of domestic airline routes are already highly concentrated.  The merger would create the largest airline in the world and result in four airlines controlling more than 80 percent of the United States commercial air travel market. 

 
The merger would also entrench the merged airline as the dominant carrier at Washington Reagan National Airport, with control of 69 percent of the take-off and landing slots. The merged airline would have a monopoly on 63 percent of the nonstop routes served out of Reagan National airport. As a result, Washington, D.C., area passengers would likely see higher prices and fewer choices if the merger is allowed, the department said in its complaint. Blocking the merger will preserve current competition and service, including flights that US Airways currently offers from Washington’s Reagan National Airport.

 
The complaint also describes how, in recent years, the major airlines have succeeded in raising prices, imposing new fees and reducing service.  The complaint quotes several public statements by senior US Airways executives directly attributing this trend to a reduction in the number of competitors in the U.S. market:

·          President Scott Kirby said, “Three successful fare increases – [we are] able to pass along to customers because of consolidation.”

·          At an industry conference in 2012, Kirby said, “Consolidation has also…allowed the industry to do things like ancillary revenues…. That is a structural permanent change to the industry and one that’s impossible to overstate the benefit from it.”

·          As US Airways CEO Parker stated in February 2013, combining US Airways and American would be “ the last major piece needed to fully rationalize the industry.” 

·          A US Airways document said that capacity reductions have “enabled” fare increases.

 
“The merger of these two important competitors will just make things worse –exacerbating current airline industry trends toward reduced service, increasing fares and increasing passenger fees,” added Baer.

 
As the complaint describes, absent the merger, US Airways and American will continue to provide important competitive constraints on each other and on other airlines. Today, US Airways competes vigorously for price-conscious travelers by offering discounts of up to 40 percent for connecting flights on other airlines’ nonstop routes under its Advantage Fares program. The other legacy airlines – American, Delta and United – routinely match the nonstop fares where they offer connecting service in order to avoid inciting costly fare wars. The Advantage Fares strategy has been successful for US Airways because its network is different from the networks of the larger carriers. If the proposed merger is completed, the combined airline’s network will look more like the existing American, Delta and United networks, and as a result, the Advantage Fares program will likely be eliminated, resulting in higher prices and less services for consumers. An internal analysis at American in October 2012, concluded, “The [Advantage Fares] program would have to be eliminated in a merger with American, as American’s large, nonstop markets would now be susceptible to reactionary pricing from Delta and United.” And, another American executive said that same month, “The industry will force alignment to a single approach–one that aligns with the large legacy carriers as it is revenue maximizing.” By ending the Advantage Fares program, the merger would eliminate lower fares for millions of consumers, the department said.

 
The complaint also alleges that the merger is likely to result in higher ancillary fees, such as fees charged for checked bags and flight changes. In recent years, the airlines have introduced fees for those services, which were previously included in the price of a ticket. These fees have become huge profit centers for the airlines. In 2012, domestic airlines generated more than $6 billion in fees from checked bags and flight changes alone. The legacy carriers often match each other when one introduces or increases a fee, and if others do not match the initiating carrier tends to withdraw the change. By reducing the number of airlines, the merger will likely make it easier for the remaining carriers to coordinate fee increases, resulting in higher fees for consumers.

 
The department also said that the merger will make coordination easier among the legacy carriers. Although low-cost carriers such as Southwest and JetBlue offer consumers many benefits, they fly to fewer locations and are unlikely to be able to constrain the coordinated behavior among those carriers.

 
American Airlines is currently operating in bankruptcy. Absent the merger, American is likely to exit bankruptcy as a vigorous competitor, with strong incentives to grow to better compete with Delta and United, the department said. American recently made the largest aircraft order in industry history, and its post-bankruptcy standalone plan called for increasing both the number of flights and the number of destinations served by those flights at each of its hubs.

 
The department’s complaint describes US Airways executives’ fear of American’s standalone growth plan as “industry destabilizing.” The complaint states that US Airways worries that American’s growth plan would cause “others” to react “with their own enhanced growth plans…,” and that the resulting effect would increase competitive pressures throughout the industry. The department said the merger will allow US Airways’ management to abandon these aggressive growth plans and continue the industry’s current trend toward higher prices and less service.

 
The department’s complaint states that executives of both airlines have repeatedly said that they do not need the merger to succeed. The complaint states that US Airways’ CEO observed in December 2011, that “A[merican] is not going away, they will be stronger post-bankruptcy because they will have less debt and reduced labor costs.” US Airways’ executive vice president wrote in July 2012, that, “There is NO question about AMR’s ability to survive on a standalone basis.” And, as recently as January 2013, American’s management presented plans that would increase the destinations it serves in the United States and the frequency of its flights, and would position American to compete independently as a profitable airline with aggressive plans for growth.

 
AMR is a Delaware corporation with its principal place of business in Fort Worth, Texas. AMR is the parent company of American Airlines. Last year American flew more than 80 million passengers to more than 250 destinations worldwide and took in more than $24 billion in revenue. In November 2011, American filed for bankruptcy reorganization.

 
US Airways is a Delaware corporation with its principal place of business in Tempe, Ariz. Last year US Airways flew more than 50 million passengers to more than 200 destinations worldwide and took in more than $13 billion in revenue.

Related Materials:

Remarks as Prepared for Delivery by Assistant Attorney General Bill Baer at the Conference Call Regarding the Justice Department?s Lawsuit Challenging Us Airways? Proposed Merger with American Airlines

Two health care clinic owners pleaded guilty today in connection with an $8 million health care fraud scheme involving the now-defunct home health care company Flores Home Health Care Inc.

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 Miami office of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations made the announcement.

Miguel Jimenez, 43, and Marina Sanchez Pajon, 29, of Miami, pleaded guilty before U.S. District Judge Ursula Ungaro in the Southern District of Florida, each to one count of conspiracy to commit health care fraud.  At sentencing, scheduled for Oct. 30, 2013, Jimenez and Pajon each face a maximum penalty of 10 years in prison.

Jimenez and Pajon, who are married, were owners and operators of Flores Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. 

According to court documents, Jimenez and Pajon operated Flores Home Health for the purpose of billing Medicare for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.  Jimenez’s primary role at Flores Home Health involved controlling the company and running and overseeing the schemes conducted through Flores Home Health.  Both Jimenez and Pajon 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. 

Jimenez, Pajon and their co-conspirators paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Flores Home Health for home health and therapy services that were medically unnecessary and/or not provided.  They 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.  Jimenez, Pajon, and their co-conspirators used the prescriptions, medical certifications, and other documentation to fraudulently bill Medicare for home health care services that Jimenez and Pajon knew were in violation of federal criminal laws. 

From approximately October 2009 through approximately June 2012, Flores Home Health was paid approximately $8 million by Medicare for fraudulent claims for home health services that were not medically necessary and/or not provided.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.   
  
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 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. 

Southfield, Mich., resident Bashar Saroki pleaded guilty to filing a false tax return and selling drug paraphernalia, the Justice Department and the Internal Revenue Service (IRS) announced today. 

­According to court documents, Saroki controlled and operated Golden Star Party Store, a liquor store that was located in Detroit.  From 2007 through 2011, Saroki sold more than $1 million worth of a variety of cutting agents to local narcotics dealers out of Golden Star Party Store and from his residence.  The cutting agents were substances used by narcotics dealers to dilute the potency and increase the quantity of the narcotics sold to customers.  Despite the significant proceeds from the sale of cutting agents, Saroki reported very little income on his false tax return for 2009.       

Saroki faces a maximum sentence of three years in prison, one year of supervised release and a $250,000 fine on each count.  U.S. District Judge Robert H. Cleland set sentencing for Dec. 17, 2013.

Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents of IRS-Criminal Investigation, who investigated this case, and Tax Division Trial Attorneys Kenneth C. Vert and Yael T. Epstein, who prosecuted the case.     

Washington– El Departamento de Justicia anunció hoy que Townhomes of Kings Lake HOA Inc. (Asociación de Propietarios de Vivienda) y Vanguard Management Group, Inc. han aceptado pagar 150,000 dólares en resolución de una demanda que alegando violaciones de la Ley de Vivienda Justa [Fair Housing Act (FHA)]. La demanda alegaba que la HOA adoptó y ambos demandados hicieron valer límites de ocupación que discriminaron contra familias con niños en Townhomes of Kings Lake, una comunidad de 248 viviendas en Gibsonton, Fla.

Bajo el decreto por consentimiento propuesto, el que aún debe ser aprobado por el Tribunal Federal de Distrito para el Distrito Medio de Florida, los demandados pagarán 45,000 dólares a la familia que inició la queja original entablada con el Departamento de Vivienda y Desarrollo Urbano de EE.UU. [U.S. Department of Housing and Urban Development (HUD)], 85,000 dólares a un fondo para víctimas para indemnizar a otras familias discriminadas, y 20,000 dólares a los Estados Unidos como multa civil. Además, el decreto por consentimiento propuesto prohíbe a los demandados discriminar en el futuro contra familias con niños y exige que los demandados reciban capacitación sobre los requisitos de la FHA. En enero de 2013, mientras la demanda se encontraba pendiente, la HOA modificó sus límites de ocupación de modo a permitir 4 ocupantes en las viviendas de 2 dormitorios, seis ocupantes en las viviendas de 3 dormitorios y ocho ocupantes en las viviendas de 4 dormitorios.

"La Ley de Vivienda Justa asegura que no se les niegue a familias con niños sus derechos de vivienda mediante políticas de ocupación discriminatorias", señaló Jocelyn Samuels, Secretaria de Justicia Auxiliar Interina de la División de Derechos Civiles. "El Departamento de Justicia seguirá haciendo valer enérgicamente las leyes de vivienda justa que protegen los derechos de familias con niños ".

La demanda, entablada en octubre del 2012, surgió de una queja presentada a HUD por una familia con seis niños que vivía en Townhomes of Kings Lake. Después de que la familia se mudó a su vivienda de 4 dormitorios, los demandados indicaron que había un problema con el número de personas que vivían en el hogar y amenazaron con desalojar a la familiar. Finalmente, la familia se mudó de la comunidad Kings Lake. Después de que HUD investigó la queja, la agencia emitió un cargo de discriminación y remitió la cuestión al Departamento de Justicia. La demanda alegó que los demandados violaron los derechos de la familia, y que las políticas de ocupación restrictivas discriminaron a otras familias con niños, y que los demandados exhibieron un patrón o práctica de discriminación o se les negaron derechos protegidos por la FHA a un grupo de personas.

"Más de veinte años de orientación de HUD y casos han servido de aviso a los proveedores de vivienda de que las normas de ocupación que limiten injustamente o excluyan a familias con niños violan la Ley de Vivienda Justa", señaló Bryan Greene, Secretario Auxiliar Interino de Vivienda Justa e Igualdad de Oportunidades de HUD. "HUD y el Departamento de Justicia se comprometen a asegurar que todas las personas tengan acceso igualitario a la vivienda para la que califiquen financieramente".

Las personas que crean que ellas mismas u otras personas que conocen fueron víctimas de discriminación en la vivienda como resultado de las antiguas políticas de ocupación de Townhomes of Kings Lake deben comunicarse con la Sección de Vivienda y Cumplimiento de Ley Civil de la División de Derechos Civiles al 1-800-896-7743, oprima el 2 para continuar en español y seleccione el buzón número 7, o enviar un mensaje de correo electrónico a fairhousing@usdoj.gov.

La Ley de Vivienda Justa federal prohíbe discriminación en vivienda por razón de raza, color, religión, sexo, estado familiar, origen nacional y discapacidad. El hacer valer las leyes de vivienda de justa es una prioridad de la División de Derechos Civiles. Para obtener más información sobre la División de Derechos Civiles y las leyes que hace valer, visite www.justice.gov/crt.

The United States has filed suit against PharMerica Corp. in the U.S. District Court for the Eastern District of Wisconsin, the Justice Department announced today. The lawsuit alleges that PharMerica violated the False Claims Act and the Controlled Substances Act by dispensing controlled drugs without valid prescriptions and causing claims for illegally dispensed drugs to be submitted to the Medicare program.

PharMerica is a long-term care pharmacy that dispenses drugs to residents of long-term care facilities, including nursing homes and skilled nursing facilities. PharMerica services approximately 300,000 residents of long-term care facilities and fills approximately 40 million prescriptions annually. Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act. Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.

“Pharmacies are prohibited by law from dispensing Schedule II narcotics, which have the highest potential for abuse of any prescription drug, without a valid prescription from a physician,” said Stuart Delery, Assistant Attorney General for the Civil Division of the Department of Justice. “As we have done today, the Department of Justice will take action to protect the integrity of Federal health care program funds and hold those who violate the law accountable.”

The government’s complaint alleges that PharMerica routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician. According to the complaint, PharMerica’s actions violated both the spirit and the letter of the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense narcotics, before confirming that a physician had made a medical judgment about whether these narcotics were necessary and should be used by the resident. The complaint alleges that PharMerica knowingly caused the submission of false claims to Medicare for these improperly dispensed Schedule II drugs, in violation of the False Claims Act.

The lawsuit was initiated by former PharMerica employee Jennifer Denk who filed a complaint against PharMerica in July 2009. The complaint was filed under the qui tam provisions of the False Claims Act, which permit parties, known as “relators,” to sue on behalf of the United States when they believe that defendants submitted false claims for government funds. Under the False Claims Act, the government may intervene in the suit and recover three times its damages plus civil penalties. Denk’s complaint was later consolidated with a subsequent complaint filed in May 2010 by Eric Beeders and Lesa Martino.

“ The complaint that we are filing today reflects the abiding commitment of the Justice Department to the qui tam process, encouraging people with information about alleged fraud and abuse to report it in a timely and effective manner,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin.  “The False Claims Act allegations in this case, which involve Medicare billings for the dispensing of Schedule II controlled substances absent valid prescriptions, are precisely the type of allegations that our office and the Civil Division examine carefully, investigate fully, and prosecute vigorously—to protect taxpayer monies and to promote the delivery of professional health care to all of our constituents.”

The investigation was conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Wisconsin, the Drug Enforcement Administration (DEA), and the Office of Inspector General of the Department of Health and Human Services.

 
"When the most restrictive class of pharmaceutical controlled substances are dispensed by a pharmacy it is crucial to patient safety, as well as mandatory by federal law, to ensure that the patient's physician prescribed and intended for the drug to be administered. As alleged in this complaint, PharMerica did not perform that standard of patient care by failing to obtain a valid prescription prior to dispensing and is now being held accountable," stated Jack Riley, Special Agent in Charge of the DEA’s Chicago Field Division.

The government’s involvement in this case is part of the United States’ emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in 2009. 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 lawsuit is captioned U.S. ex rel. Denk v. PharMerica Corporation, Case No. 09-cv-720. The claims asserted in the complaint against PharMerica are allegations only, and there has been no determination of liability.

The Justice Department and Internal Revenue Service (IRS) announced that Tomas Olazabal, of Fresh Meadows, N.Y., was arrested today following his indictment in the U.S. District Court for the Eastern District of New York on Aug. 8, 2013, on multiple tax crimes.

According to the indictment, Olazabal owned Tupac Construction Corp., a construction company in Fresh Meadows.  As alleged in the indictment, Olazabal used check cashing services to cash a substantial number of checks paid to his construction company for services between 2007 and 2008.  He concealed his check cashing activities from his tax return preparers.  Accordingly, the gross receipts represented by the checks negotiated at the check cashers were not included as gross receipts on the company’s tax returns. 

The indictment alleges that Olazabal filed false 2007 and 2008 corporate income tax returns for Tupac. Olazabal faces a potential maximum sentence of six years in prison and a potential fine of up to $500,000.

A trial date has not been scheduled.  An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

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

An Athol, Mass., man has been charged in a criminal information with engaging in a practice known as “swatting,” which involves making hoax emergency telephone calls in order to elicit an armed police response (from a SWAT team) for the purpose of harassing someone believed to be at a specific location. 

The announcement was made today 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.

Nathan Hanshaw, 22, of Athol, has agreed to plead guilty to the charges in the criminal information filed today in U.S. District Court in Massachusetts.  The three-count information charges Hanshaw with making interstate threats, threats to use explosives and threats to use a firearm.

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

The information charges that Hanshaw made swatting calls to police departments across the United States, including departments in Denver; Ventura, Calif.; and Waverly, N.Y.  In each case, armed police responses ensued.  In response to Hanshaw’s swatting call to Ventura, more than 40 local and federal officers arrived at the purported crime scene, a hotel was evacuated and nearby streets were closed for several hours. 

The counts of making interstate threats and making threats to use a firearm each carry a maximum penalty of five years in prison.  The count of making threats to use an explosive carries a maximum penalty of 10 years in prison.

The case was investigated by the FBI and is being prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder the District of Massachusetts’s Computer Crimes Unit.  The Massachusetts State Police and Ventura County Sheriff’s Department were among the law enforcement agencies that assisted in this investigation and prosecution.

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A former sergeant in the Portsmouth Sheriff’s Office (PSO) was indicted yesterday by a federal grand jury in the Eastern District of Virginia for accepting bribes in exchange for favors and referrals, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.

The indictment charges Melvin Hike, 65, of Portsmouth, Va., with one count each of conspiracy, federal programs bribery, attempted extortion under color of official right, and false statements.  He faces a maximum penalty of 20 years in prison for the attempted extortion, 10 years in prison for the federal programs bribery, and five years in prison each for the conspiracy and false statements.  Hike also faces a maximum fine of $250,000 for each count. The indictment was unsealed following Hike’s arrest this morning.

According to the indictment, from 2008 to 2012, Hike was a PSO sergeant assigned to the warrant squad or to provide security in the Portsmouth Circuit Court.  Person A was a bail bondsman based in Portsmouth whose income depended on the number of arrestee clients he served.  At various times between 2008 and 2012, Person A gave Hike cash payments, and in exchange Hike referred arrestees to Person A as prospective clients. 

The indictment also alleges that in or about June 2010, Hike, acting under color of official right as a PSO sergeant, obtained a gift card valued at $250 to which he was not entitled, in exchange for his assistance in getting an arrestee released on bond and assigned a bondsman.

On or about January 27, 2012, Hike allegedly made false statements to FBI agents investigating his conduct.  According to the indictment, Hike stated that he had never accepted money from any bondsman, that he had never referred any arrestees to a bondsman, and that he had never accepted anything of value from an arrestee, knowing that all three statements were false.

An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.
 
This case was investigated by the FBI.  Trial Attorneys Peter Mason and Monique Abrishami of the Public Integrity Section in the Justice Department’s Criminal Division and Special Assistant U.S. Attorney Amy E. Cross of the Eastern District of Virginia are prosecuting the case.

The Justice Department and the Internal Revenue Service (IRS) announced that former professional tax return preparers Greene Wylie Sheppard, Sabrina Johnson-Lavant and Chandra Henderson were sentenced this month to serve 56 months, 8 months, and 18 months in prison, respectively, for conspiring to defraud the United States by filing false tax returns in order to receive fraudulently-inflated refunds for their clients.  In addition to conspiracy, Sheppard was also sentenced for aggravated identity theft.  Sheppard was sentenced on July 11, 2013, and Johnson-Lavant and Henderson were sentenced yesterday.

According to court documents, Sheppard owned and operated Quick Tax, a tax preparation business in Cordele, Ga.  He conspired with his employees Johnson-Lavant and Henderson to obtain higher refunds on clients’ returns by falsely inflating clients’ wages in order to exploit certain tax credits.  The co-conspirators sold other people’s identifying information to their clients, and these other identities would then be claimed as dependents on their tax returns in order to manipulate the size of the refund.  The three return preparers acquired dozens of identities by purchasing them. They maintained notebooks that kept track of the identities and how much clients owed them for the false dependents.  Over the course of the conspiracy, which spanned four years, Quick Tax claimed over $400,000 in fraudulent refunds.

Assistant Attorney General Keneally commended the efforts of Special Agents of IRS - Criminal Investigation and Trial Attorneys Alexander Effendi and Charles Edgar Jr. of the Tax Division, who prosecuted the case.

Note: A prior version of this release incorrectly stated the prison sentences for Sabrina Johnson-Lavant and Chandra Henderson were 18 months and 8 months, respectively.  The release has been changed above to reflect the correct sentence of 8 months for Johnson-Lavant and 18 months for Henderson. 

The Justice Department will not pursue federal criminal civil rights or other federal criminal charges against the United States Border Patrol (USBP) agent involved in the shooting incident that resulted in the death of Ramses Barron-Torres, the department announced today.

  Officials from the Civil Rights Division of the Department of Justice, the U.S. Attorney’s Office for the District of Arizona, and the Department of Homeland Security (DHS) Office of the Inspector General (OIG) met today with representatives for Barron-Torres’ family to inform them of this determination.  The department’s decision is based on the facts developed during an independent and comprehensive investigation into this matter.

The department devoted significant time and resources to investigating the events surrounding Barron-Torres’ death on Jan. 5, 2011, at approximately 3:00 a.m., at the international boundary fence separating the United States from Mexico in Nogales, Ariz.  A team of experienced federal prosecutors reviewed hundreds of pages of evidence generated by DHS OIG investigators and the FBI.  They conducted a detailed and lengthy analysis of numerous materials including videotapes of the incident, physical evidence reports, official law enforcement use of force training materials, law enforcement accounts and civilian witness accounts. 

The evidence developed during the investigation indicated that USBP agents were responding to reports that individuals were moving apparent packages of narcotics across the U.S. – Mexico border.  When the agents arrived at the location, Barron-Torres, a 17-year-old Mexican national, and three other individuals were on the Mexico side of the border fence and started throwing rocks at the two USBP agents who were on the U.S. side of the fence.  A fifth individual, who was carrying a bundle of suspected narcotics, ran parallel to the fence on the U.S. side.  The agents were forced to take protective cover due to the rocks that were being thrown by Barron-Torres and his associates.  The agents issued commands, in Spanish, to stop throwing rocks.  However, Barron-Torres continued to throw rocks, and one of the agents fired a round at Barron-Torres from his service weapon, fatally striking him.  A videotape of the incident captured Barron-Torres making a throwing motion with his right arm, then falling to the ground. 

The Department of Justice lacks jurisdiction to prosecute the agent who fired at Barron-Torres under the federal criminal civil rights statute pertaining to use of force under color of law, because the statute requires that the victim be in the United States when he was injured.  Here, Barron-Torres was on the Mexico side of the border fence when he was shot.  While the federal homicide statutes address murder and manslaughter committed within the Special Maritime and Territorial Jurisdiction of the United States, federal courts have consistently held that self-defense and justification are both defenses to the federal homicide statutes.  Although the agent was within the Special Maritime and Territorial Jurisdiction when he fired upon Barron-Torres, there is insufficient evidence to disprove the agent’s claim that he shot Barron-Torres in self-defense; because Barron-Torres was throwing rocks over the border fence in the direction of the agents and ignored the agents’ commands to stop.  Rather, the videotape of the incident, another witness agent and a civilian witness on the Mexico side of the fence all corroborate the account of the agent who fired at Barron-Torres.

While the loss of life is regrettable, the facts of this matter do not support a federal prosecution. Accordingly, the investigation into this incident has been closed.

The Justice Department will not pursue federal criminal civil rights or other federal criminal charges against the United States Border Patrol (USBP) agent involved in the shooting incident that resulted in the death of Carlos LaMadrid, the Department announced today.

Officials from the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the District of Arizona, and the Department of Homeland Security (DHS) Office of the Inspector General (OIG) met today with LaMadrid’s family members and their representatives to inform them of this determination.  The department’s decision is based on the facts developed during an independent and comprehensive investigation into the matter.

The department devoted significant time and resources to investigating the events surrounding LaMadrid’s death on March 21, 2011, around noon, at the international boundary fence separating the United States from Mexico in Douglas, Ariz.  A team of experienced federal prosecutors reviewed thousands of pages of evidence generated by the DHS OIG investigators, the Customs and Border Protection Office of Professional Responsibility, and the Immigration and Customs Enforcement (ICE) Internal Affairs Unit.  They conducted a detailed and lengthy analysis of numerous materials including videotapes of the incident, the autopsy report, physical evidence reports, official law enforcement use of force training materials, law enforcement accounts and civilian witness accounts.  Federal prosecutors also interviewed several key witnesses and physically examined the scene of the shooting to gather additional information. 

The evidence developed during the investigation indicated that LaMadrid, a 19-year-old U.S. citizen, was observed by Douglas Police Department (DPD) officers loading suspected bundles of narcotics into a Chevrolet Avalanche.  DPD officers pursued the vehicle, but LaMadrid failed to yield and drove toward the international boundary fence.  The Avalanche ran into a USBP agent’s service vehicle near the fence.  LaMadrid exited the driver’s door, ran toward the fence, and climbed up a ladder that was resting against the fence.  On top of the fence, near LaMadrid, was another male throwing brick-sized rocks at the USBP agent.  At the time the shots were fired by the agent, LaMadrid was in the line of fire between the rock-throwing male and the agent.   LaMadrid was struck by four bullets, causing him to fall to the ground.  He was transported to a nearby hospital where he died in surgery several hours later. 

While a civilian witness who climbed up the ladder behind the victim stated that he did not see anyone throwing rocks at the time of the shooting, his account is contradicted by the physical, testimonial and video evidence.  A law enforcement officer who witnessed the shooting stated that he saw a man on top of the fence throw three rocks at the agent, forcing the shooting agent to duck down behind his vehicle for cover.  The videotapes of the incident, although poor in quality, show an individual on top of the border fence making an overhead throwing motion as the victim ascends the ladder.  Crime scene investigators recovered several brick-sized rocks at the scene, including one that shattered the windshield of the USBP agent’s service vehicle, which the agent was standing or stooping next to when he fired five shots. 

  Under the applicable federal criminal civil rights law, prosecutors must establish, beyond a reasonable doubt, that an official “willfully” deprived an individual of a constitutional right, meaning that the official acted with the deliberate and specific intent to do something the law forbids.  This is the highest standard of intent imposed by the law.  Neither accident, mistake, fear, negligence nor bad judgment is sufficient to establish a federal criminal civil rights violation.  After a careful and thorough review, a team of experienced federal prosecutors determined that the evidence was insufficient to pursue federal criminal civil rights charges. 

This matter is also not prosecutable under the federal homicide statutes, although it was committed within the Special Maritime and Territorial Jurisdiction of the United States, because there is insufficient evidence for the government to disprove that the agent was acting in self-defense when he fired at the rock thrower and mistakenly struck the victim, who was in his line of fire. 

While the loss of life is regrettable, the facts of this matter do not support a federal prosecution.  Accordingly, the investigation into this incident has been closed.