District Not Recorded

Young C. Kim, President and project manager of co-defendant Hubtec International Corporation (“Hubtec”), was sentenced to two years of probation and ordered to pay a $200 special assessment fee based upon his participation in defrauding the U.S. Department of Transportation Federal Highway Administration (“FHWA”) and the Government of Guam Department of Public Works in connection with Hubtec’s contract to reconstruct and rehabilitate the Route 2 culverts and Cetti Bay slide repair in Agat and Umatac.  Funded in part under the American Recovery and Reinvestment Act (“ARRA”) of 2009, the contract required that all steel and iron that were to be permanently incorporated into the project be manufactured in the U.S. pursuant to the Buy America requirement unless FHWA granted a waiver.  Kim and Hubtec falsely represented that they used U.S.-made reinforcement steel bars for the project, when in fact, the defendants knew they incorporated Korean-made reinforcement steel bars which were not in compliance with applicable Buy America requirements. The Honorable Ramona V. Manglona, Designated Chief Judge, sentenced Kim in the U.S. District Court of Guam on June 27, 2013.

Kim pleaded guilty in October 29, 2012 to two counts of making false statements in connection with a highway project.  The FHWA has debarred Kim and Hubtec for its willful violation of the Buy America provisions for a period of three years which has the effect of excluding them from being a participant or principal in federally-funded programs and projects unless an agency grants an exception.  The sentencing for Hubtec is set for August 14, 2013 at 1:30 p.m.

The investigation was conducted by the Federal Bureau of Investigation (“FBI”) and the U.S. Department of Transportation, Office of Inspector General (“DOT-OIG”).  The case was handled by Assistant U.S. Attorney Marivic P. David.

Alicia A.G. Limtiaco, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, stated that “this prosecution reflects that strong commitment of the U.S. Attorney’s Office, FBI, and DOT-OIG to ensure that ARRA funds are used for their intended purpose.”

The Justice Department and Internal Revenue Service, Criminal Investigation (IRS-CI) announced that Alexei Iazlovsky of Potomac, Md., pleaded guilty today in the U.S. District Court for the Central District of California to filing a false tax return for tax year 2008.

According to court documents, Iazlovsky, a U.S. citizen, maintained an undeclared bank account held in the name of a foreign corporation at the Luxembourg branch of an Israeli bank. Iazlovsky owned a corporation that produced documentaries for Russian television stations. A tax return preparer suggested to Iazlovsky that he could reduce his taxes by keeping money out of the United States and diverting payments from his Russian clients to a foreign bank account held in the name of a foreign corporation.  Iazlovsky met with a banker from the Israeli bank at a New York hotel to open the Luxembourg account.   

According to court documents, Iazlovsky diverted a total of $2.6 million in untaxed payments from his Russian clients to his undeclared bank account in Luxembourg. From 2002 through 2009, Iazlovsky filed false individual and corporate tax returns that failed to report his authority over and ownership of the bank account in Luxembourg. He also omitted the income diverted to and generated by the undeclared account in Luxembourg. Iazlovsky has admitted that the tax loss is more than $400,000. 

Iazlovsky is the latest in a series of defendants charged in the U.S. District Court for the Central District of California with failing to report income from undeclared accounts held at Israeli banks.

“Individuals who evade their tax obligations cheat their country and their fellow citizens,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The Department of Justice is committed to using all of the many available tools to find and prosecute those who hide income and assets in offshore bank accounts, and to pursue the taxes and penalties that are due.” 

"Offshore tax evasion is a top priority for IRS-CI, and the facts in this case are clear.  Earned income was placed into foreign bank accounts for the purpose of committing offshore tax fraud," said Richard Weber, Chief, IRS-CI. "Through our efforts, we are gaining access to more and more information on institutions and individuals involved in offshore tax fraud, and you can expect us to use all of our enforcement tools to stop this abuse."

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

Iazlovsky has agreed to pay a civil penalty in the amount of 50 percent of the high balance of his undeclared account to resolve his civil liability with the IRS for failing to file FBARs. Iazlovsky faces a maximum prison term of three years and a maximum fine of $250,000.

Assistant Attorney General Keneally thanked special agents of IRS-CI, who investigated the case, and Tax Division Trial Attorneys Ellen M. Quattrucci and Christopher S. Strauss, who prosecuted the case, and Assistant U.S. Attorney Sandra R. Brown of the U.S. Attorney’s Office for the Central District of California, who assisted with the prosecution.

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

A Los Angeles-area doctor and a patient recruiter pleaded guilty today for their roles in a power wheelchair fraud scheme that defrauded Medicare of over $10.1 million.

The plea was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Joseph Fendrick, Special Agent in Charge of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse.

Dr. Emmanuel Ayodele, 65, of Los Angeles, and Alejandro Maciel, 43, of Huntington Park, Calif., pleaded guilty before U.S. District Judge George Wu in the Central District of California to one count of health care fraud and one count of conspiracy to commit health care fraud, respectively.

Ayodele admitted that he defrauded Medicare by participating in a power wheelchair fraud scheme with the operators of fraudulent durable medical equipment (DME) supply companies.  According to court documents, DME suppliers provided Ayodele with patients recruited by street-level patient recruiters or “marketers,” who illegally solicited people with Medicare benefits for power wheelchairs and other DME that the people did not need.  In court documents, Maciel admitted that he was one of these marketers.

Maciel admitted that he approached people at their homes, swap meets, grocery stores and other locations, and made various misrepresentations to the people about his true identity and Medicare.  Maciel admitted that these misrepresentations allowed him to gain the trust of Medicare beneficiaries and convince them to provide him with their Medicare billing and personal information, which Maciel, Ayodele, and their co-conspirators used to defraud Medicare.  Maciel also admitted that, through his misrepresentations, he convinced people to travel with him to fraudulent medical clinics and DME supply companies owned and operated by his co-conspirators.  Ayodele admitted that he owned one of these fraudulent medical clinics, Beth Medical Clinic, which he operated in Los Angeles.

Ayodele admitted that, at Beth Medical, he wrote medically-unnecessary prescriptions for power wheelchairs and DME.  Ayodele admitted he knew that the DME supply companies used the medically-unnecessary prescriptions and documents that he wrote to submit claims to Medicare for medically-unnecessary power wheelchairs and DME.  For example, Ayodele admitted that the operators of fraudulent DME supply company Bonfee Inc., who were indicted with Ayodele and Maciel on Medicare fraud charges, paid Ayodele to write a medically-unnecessary power wheelchair prescription for one of Bonfee’s customers, and then used that prescription to submit a false power wheelchair claim to Medicare that totaled over $6,000.

Maciel admitted that his profit from the scheme came in the form of illegal kickbacks paid to him for every person whose Medicare billing and personal information his co-conspirators successfully used to bill Medicare for power wheelchairs or other items of DME.  According to court documents, once his co-conspirators successfully billed Medicare, Maciel delivered the power wheelchairs and other DME to the people whom he recruited.  During these deliveries, Maciel observed that the people could walk, and that they did not have a legitimate need for the wheelchairs and other DME.

As a result of their conduct, Ayodele and Maciel admitted that they and the owners and operators of Bonfee, Lutemi Medical Supplies, and other fraudulent DME companies submitted and caused to be submitted over $10,132,178 in false and fraudulent claims to Medicare.  Ayodele and Maciel admitted that Medicare paid Bonfee and the other DME supply companies over $5,388,754 on these false and fraudulent claims.

Two of Ayodele and Maciel’s co-defendants, Charles Agbu, a former pastor who owned Bonfee, and Dr. Juan Van Putten, have pleaded guilty to Medicare fraud charges and are scheduled for sentencing on Aug. 15, 2013, and Sept. 26, 2013, respectively.  Ayodele and Maciel’s other co-defendants, Obiageli Agbu and Candalaria Estrada, are scheduled for trial on July 9, 2013.

The owner of Lutemi, Olufunke Fadojutimi, a registered nurse, was arrested on May 14, 2013, on Medicare fraud charges.  Fadojutimi is scheduled for trial on Oct. 22, 2013. Defendants are presumed innocent unless proven guilty in court.

At sentencing, scheduled for Sept. 30, 2013, Ayodele and Maciel each face a maximum penalty of 10 years in prison and a $250,000 fine. 

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

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

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

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

The owner and operator of a durable medical equipment (DME) supply company was sentenced today to serve five years in prison in connection with a health care fraud scheme involving Latay Medical Services, a DME company based in Gardena, Calif.

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

Bolademi Adetola, 47, of Harbor City, Calif., was sentenced today by U.S. District Judge George H. Wu in the Central District of California.   In addition to her prison term, Adetola was sentenced to serve three years of supervised release and ordered to pay $4,555,198 in restitution.

On March 1, 2013, Adetola was convicted by a jury in federal court in Los Angeles of one count of conspiracy to commit health care fraud and 12 counts of health care fraud.  During trial, the evidence showed that Adetola, as the former owner and operator of Latay, fraudulently billed millions of dollars to Medicare for DME that was either never provided to its Medicare beneficiaries or was not medically necessary. 
 
The trial evidence showed that between January 2005 and October 2009, Adetola paid cash kickbacks for fraudulent prescriptions for DME, such as power wheelchairs and hospital beds.  The evidence at trial showed that a co-conspirator physician wrote prescriptions for power wheelchairs and other DME that the Medicare beneficiaries did not need and ultimately never used.  The co-conspirator physician testified that Adetola paid him cash kickbacks for every fraudulent prescription that he wrote for the DME and that Adetola used his prescriptions to bill Medicare for the power wheelchairs and other DME.  Several Medicare beneficiaries testified that they were lured to medical clinics with the promise of a free recliner sofa, only to receive power wheelchairs that they did not need and did not want.  According to the testimony, the beneficiaries were unsuccessful in their attempts to reject delivery of the power wheelchairs from Adetola’s supply company.
 
In addition, the trial evidence showed that Adetola billed Medicare for DME supposedly provided and delivered to Medicare beneficiaries who were deceased at the time of service.  One particular claim submitted by Adetola to Medicare showed that the Medicare beneficiary’s death preceded the date the Medicare beneficiary supposedly signed for the service. 

As a result of this fraud scheme, Adetola submitted and caused the submission of over $8.4 million in false and fraudulent claims to Medicare, and received over $4.5 million on those claims.

The case is being prosecuted by Assistant Chief Benton Curtis and Trial Attorney Blanca Quintero of the Criminal Division’s Fraud Section.  The case is being investigated by the FBI and the Los Angeles Region of HHS-OIG. 
 
The case 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 Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

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

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

The Justice Department today filed a lawsuit against the owners and managers of rental homes in and near Kelso and Longview, Wash., for violating the Fair Housing Act by discriminating against persons with disabilities.

The lawsuit, filed in the U.S. District Court for the Western District of Washington, alleges that Linda Barber, Bert Barber and Lori Thompson engaged in a pattern or practice of violating the Fair Housing Act or denied rights protected by the Act.  Specifically, the lawsuit asserts that the defendants established and implemented a discriminatory policy that allowed waiver of the defendants’ mandatory $1,000 “pet deposit” for service animals with specialized training, but not for other assistance animals, including emotional support animals.  The suit also alleges that, by refusing a tenant’s requests for a reasonable accommodation to waive the $1,000 pet deposit for her assistance animal, the defendants violated the Fair Housing Act.

“The Fair Housing Act ensures that individuals with disabilities who live with and benefit from assistance animals have equal access to housing,” said Eric Halperin, Senior Counsel and Special Counsel for Fair Lending in the Civil Rights Division.  “The Justice Department will continue its vigorous enforcement of fair housing laws that protect the rights of persons with disabilities.”

“The rights of our disabled citizens need to be protected and landlords should not engage in conduct that makes their lives more difficult,” said U.S. Attorney Jenny A. Durkan for the Western District of Washington.  “A tenant should not have to repeatedly prove they need a service animal or other accommodation, and should not face retaliation when they make a complaint to those tasked with protecting their civil rights.” 

This lawsuit arose as a result of a complaint filed with the Department of Housing and Urban Development (HUD).  A low-income tenant with a mental disability repeatedly asked the defendants to waive the $1,000 pet deposit for her assistance animal and provided numerous notes from medical professionals to support her request.  As a result of the defendants’ policy and their failure to grant her request, she waited for over two and a half years to obtain an assistance animal and then began to pay the deposit in monthly installments at great financial hardship.  After filing her HUD complaint, she was subjected to retaliation and harassment by the defendants, and she eventually moved out of the defendants’ unit.  After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the Justice Department.

“Housing providers must grant reasonable accommodations needed by residents with disabilities,” said Bryan Greene, Acting Assistant Secretary for Fair Housing and Equal Opportunity.  “HUD and the Department of Justice are committed to ensuring that everyone has equal housing opportunities and is able to exercise their fair housing rights without fear of retaliation.”

The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions, and a civil penalty.  Any individuals who have information relevant to this case are to contact the Housing and Civil Enforcement Section of the Civil Rights Division at 1-800-896-7743, ext. 7.

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

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

On Thursday, June 27, 2013, Kalidhasdsan Magalingam and Kaali Chellathura were sentenced to  
51 months incarceration for their part in importing 961.3 grams net weight of methamphetamine hydrochloride of 98% purity — ice.  The penalty generally brings a mandatory 10 years of incarceration, but the defendants qualified for the “safety valve” because this was their first offense and they were merely couriers.  They are married, both citizens of Malaysia.  They traveled to Hong Kong, received the ice, which was hidden in special shoes and a bra, and attempted to carry it through the airport on September 13, 2012.  They were stopped and searched after presenting their passports.

The investigation was conducted by the Department of Homeland Security, Homeland Security  Investigations.  The case was prosecuted by Assistant U.S. Attorney Karon V. Johnson.

King Pharmaceuticals LLC (King) will pay $2.2 million and take measures to comply with the Clean Air Act to resolve alleged violations of the Clean Air Act (CAA) at its pharmaceutical manufacturing facility located in Bristol, Tenn., announced the Department of Justice, the U.S. Environmental Protection Agency (EPA), and the Tennessee Department of Environment and Conservation (TDEC).

 From the $2.2 million civil penalty, $1.1 million will be paid to the United States and $1.1 million will be paid to TDEC.  From TDEC’s $1.1 million penalty, $650,000 will be applied to a TDEC state project for homeowners.  The settlement also requires the facility to demonstrate compliance with CAA National Emission Standards for Pharmaceuticals Production (PharmaMACT regulations) and to apply for a Title V permit.  The PharmaMACT regulations impose “Maximum Achievable Control Technology” (MACT) standards, which are industry-specific measures that must be implemented to control hazardous air pollutants in order to prevent harm to human health or the environment.
The TDEC state project calls for implementation of a program dedicated to providing financial assistance to low-to-moderate income homeowners in making improvements to residential housing focused on weatherization, insulation and energy efficiency.  This project will focus on the reduction of energy usage and decreasing emissions associated with the generation of electricity or use of fossil fuels in home heating.  TDEC plans to use existing local programs in the Bristol area to identify and channel assistance to eligible homeowners.

“This settlement will protect public health and the environment by requiring additional hazardous air pollution controls at the pharmaceutical facility in Bristol,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “This significant civil penalty should send a strong signal to the pharmaceutical industry regarding our commitment to enforce PharmaMACT.”

“Upholding the public health benefits of the Clean Air Act is a critical responsibility of EPA,” said Beverly H. Banister, Acting Deputy Regional Administrator of EPA’s Southeastern office.  “This settlement will result in better management practices that will ultimately lead to greater protection of public health and the environment for the citizens of Bristol.”

“The Tennessee Department of Environment and Conservation is pleased the proposed settlement could be reached in this litigation to address air emissions and permitting requirements, and that the facility will move forward to meet those requirements,” said TDEC Commissioner Bob Martineau.  “Additionally, the state project included in the settlement will promote emission reductions by reducing the energy needs of low-income residents in the area.”

King began pharmaceutical manufacturing operations at the Bristol facility in 1993.  King was acquired by Pfizer Inc. in 2011, becoming a wholly owned subsidiary of Pfizer. On May 29, 2013, UPM Pharmaceuticals announced that it will acquire the Bristol facility.  The sale of the facility will not affect the injunctive relief required by the settlement.  The alleged violations were discovered during a May 2006 inspection and subsequent investigation by EPA and TDEC.  The United States and the state of Tennessee jointly brought the complaint.

 The Department of Justice filed the complaint and lodged the consent decree contemporaneously on behalf of EPA in the U.S. District Court for the Eastern District of Tennessee today.  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 a final judgment. It is available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html.

Attorney General Eric Holder today issued the following statement regarding the United States Office of Personnel Management (OPM) guidance to Federal agencies.  On June 26, 2013, the Supreme Court issued a landmark decision in United States v. Windsor, holding Section 3 of the Defense of Marriage Act, known as DOMA, unconstitutional.  As a result of this decision, the Federal government will now be able to extend benefits to Federal employees and annuitants who have legally married a spouse of the same sex. 

“Today’s announcement represents a historic step toward equality for all American families.  The Supreme Court ruled this week that Americans in same-sex marriages are entitled to equal protection and equal treatment under the law.  By extending health insurance and other important benefits to federal employees and their families, regardless of whether they are in same-sex or opposite-sex marriages, the Obama Administration is making real the promise of this important decision.

“These initial changes in federal benefits will make a meaningful, positive difference in the lives of many.  But this is only the beginning.  As the President directed, the Department of Justice will continue to coordinate with other federal agencies to implement this ruling as swiftly and smoothly as possible.  I look forward to sharing additional information as it becomes available.  We will never stop fighting to ensure equality, opportunity, and – above all – justice for everyone in this country.”

The chief executive officer of a Virginia-based security contracting firm was sentenced today to serve  four years in prison for serving as a figurehead owner of a front company created to obtain more than $31 million intended for disadvantaged small businesses through the Small Business Administration’s (SBA) Section 8(a) program, which allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.

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; National Aeronautics and Space Administration (NASA) Inspector General Paul K. Martin; SBA Inspector General Peggy E. Gustafson; Defense Criminal Investigative Service (DCIS) Special Agent in Charge of Mid-Atlantic Field Office Robert E. Craig; General Services Administration (GSA) Inspector General Brian D. Miller; and Department of Homeland Security (DHS) Deputy Inspector General Charles K. Edwards made the announcement after the sentencing today.
 
Dawn Hamilton, 48, of Brownsville, Md., was sentenced by U.S. District Judge T. S. Ellis III in the Eastern District of Virginia.  In addition to her prison term, Hamilton was sentenced to serve three years of supervised release and ordered to forfeit approximately $1,232,145 and pay an additional fine of $1 million.  On March 15, 2013, Hamilton pleaded guilty to major government fraud.

According to court documents, in approximately 2011, Keith Hedman, 53, of Arlington, Va., formed Company A, which was approved to participate in the 8(a) program based on the 8(a) eligibility of its listed president and CEO, an African-American female.  When the listed president and CEO left Company A in 2003, Hedman became its sole owner, and the company was no longer 8(a)-eligible.

In 2003, Hedman created Company B, another Arlington-based security contractor, to ensure that he could continue to gain access to 8(a) contracting preferences for which Company A was no longer qualified.  Prior to applying for Company B’s 8(a) status, Hedman selected Hamilton, a Company A employee at the time, to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage. In reality, the new company was managed by Hedman and Company A senior leadership, in violation of 8(a) rules and regulations. To deceive the SBA, the co-conspirators falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management.  Based on those misrepresentations, Company B obtained 8(a) status in 2004.

From 2004 through February 2012, Hedman – not Hamilton – impermissibly exercised ultimate decision-making authority and control over Company B by directing its finances and allocation of personnel and government contracting activities.  Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of Hamilton’s signatures on documents she had not drafted or seen.  Hamilton signed annual reviews and other documents submitted to the SBA that falsely claimed, among other things, that she controlled Company B.  Hedman also retained ultimate control over the shell business’s bank accounts throughout its existence.  In 2010, Hedman withdrew $1 million in cash from Company B’s accounts and gave the funds in cash to Hamilton and three other conspirators.  In 2011, Hedman approached Hamilton’s brother about starting another shell company to continue the scheme.  The trio submitted another fraudulent application to the SBA, but it was rejected. 

In total, the scheme netted government contracts valued at more than $153 million, from which Company B obtained more than $31 million in contract payments.  The various conspirators netted more than $6.1 million that they were not entitled to receive from those payments.  Seven other defendants have pleaded guilty in the scheme.

This case is being investigated by NASA Office of the Inspector General, the SBA-OIG, DCIS-OIG, GSA-OIG and DHS-OIG, with assistance from the Defense Contract Audit Agency. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section, are prosecuting the case on behalf of the United States.

The Justice Department and the Internal Revenue Service (IRS) announced today that Lawrence Garafola, a resident of Poway, Calif., pleaded guilty to tax evasion.      

  According to documents filed with the court, Garafola owned and operated A-1 Tree & Shrub Service (ATS), a landscaping business located in Freeport, N.Y.  Beginning in approximately 2004 and continuing through approximately 2008, Garafola failed to report to the IRS a substantial portion of income he obtained through payment for services rendered by ATS.  Instead of depositing checks to ATS into ATS’s business bank account, Garafola used a commercial check cashing service to cash checks and failed to report that income to his tax return preparer. 

Garafola admitted that for tax years 2007 and 2008, he failed to report approximately $1,843,847 of income, resulting in an additional tax due and owing to the government of approximately $516,277. 

Garafola faces a maximum sentence of five years in prison, three years of supervised release and a $250,000 fine.  He has agreed to pay restitution of $760,637 to the IRS.

The case was investigated by IRS-Criminal Investigation. Trial Attorneys Mark Kotila and Robert Kennedy of the Justice Department’s Tax Division are prosecuting this case.

The Justice Department Civil Rights Division and Los Angeles County today announced that they have reached  preliminary agreements to make broad changes to policing in the Antelope Valley and to the enforcement of the Housing Choice Voucher Program (commonly known as Section 8).  Together with statements of intent outlining these changes, the division today released a letter detailing its findings that Los Angeles County Sheriff’s Department’s (LASD) Lancaster and Palmdale stations, both of which are located in the Antelope Valley, engaged in a pattern or practice of stops, searches, and seizures and excessive force in violation of the Constitution and federal law.  In addition, the Justice Department found a pattern or practice of discrimination against African Americans in its enforcement of the Housing Choice Voucher Program in violation of the Fair Housing Act.  The investigation, launched on Aug. 19, 2011, was brought under to the Violent Crime Control and Law Enforcement Act of 1994, Title VI of the Civil Rights Act of 1964, and the federal Fair Housing Act. 

The findings announced today are based on a comprehensive investigation of LASD’s Antelope Valley stations.  This investigation included an in-depth review of documents and data provided by LASD and the Housing Authority of the County of Los Angeles (HACoLA), as well as extensive community engagement.  The division reviewed tens of thousands of pages of documents, including written policies and procedures, training materials, arrest reports and civilian complaints.  The division also conducted interviews of Antelope Valley deputies and unit commanders, local government officials and hundreds of community members.  The investigation also included statistical analyses of the Antelope Valley stations’ search and seizure data of pedestrian and vehicle contacts for the entire calendar year of 2011.  Sheriff Leroy Baca and HACoLA Executive Director Sean Rogan were cooperative throughout the investigation and immediately began working with the Justice Department to negotiate a remedy to the problems revealed by the investigation.  

The division’s investigation into the Antelope Valley stations findings include:

·          African Americans, and to a lesser extent Latinos, are more likely to be stopped and/or searched than whites, even when controlling for factors other than race, such as crime rates;

·          The widespread use of unlawful backseat detentions violating the Fourth Amendment and LASD policy; 

·          A pattern of unreasonable force, including a pattern of the use of force against handcuffed individuals; 

·          A pattern of intimidation and harassment of African-American housing choice voucher holders by LASD deputies, often in conjunction with HACoLA investigators. 

·          Inadequate implementation of accountability measures to intervene on unconstitutional conduct has allowed these problems to occur.

“We are encouraged by the response of Los Angeles County to our findings.  While our investigation showed significant problems in LASD’s Antelope Valley stations, we are confident that we will be able to reach an agreement that will provide meaningful and sustainable reform,” said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division.  “We look forward to continuing our positive partnership with the Los Angeles Sheriff’s Department and HACoLA and believe this work will help restore the community’s confidence in fair, equitable, and effective law enforcement.”

The proposed changes set out in the statement of intent include:

·          Revision of LASD’s policies, directives, training, and practices so that stops, searches, and seizures by Antelope Valley deputies are consistently conducted in accordance with the law.

·          A commitment to further strengthening and uniformly implementing protocols regarding HACoLA’s investigation of housing choice voucher holders’ compliance with program rules, including LASD deputy participation in those investigations.

·          Provision of training that will focus on how bias may occur in law enforcement activity, and on the effects of bias on subjects of law enforcement activity.  Training will also educate LASD and HACoLA personnel on federal and constitutional obligations, including the requirements of the Fair Housing Act.

·          Revision of LASD’s use of force policies, training curricula, and any relevant directives, bulletins, or defensive tactics manuals to provide clear guidance about the reasonable use of force.

·          Continued and increased positive community engagement by LASD in the Antelope Valley, including participating in local community meetings, making itself available for community feedback, developing the Community Advisory Committees (CAC), and working with the community on the development of diversion programs.   

In addition to its investigation of LASD, the Civil Rights Division conducted an investigation under the Fair Housing Act of the HACoLA, and the cities of Palmdale and Lancaster, to determine whether there has been a systematic effort by these entities to discriminate against African Americans.  As a result of the Department's findings, the Assistant Attorney General for Civil Rights has authorized the filing of a complaint in federal district court against the County of Los Angeles, HACoLA, LASD, and the Cities of Lancaster and Palmdale for alleged violations of federal law.  Through the ongoing negotiations, all of the parties seek to avoid contested litigation and resolve the matter in a comprehensive agreement to be entered as an order of the court.                                                                                                   

The findings letter will be available on the Civil Rights Division’s Web site at www.justice.gov/crt.   The division welcomes comments or concerns via email at community.antelope@usdoj.gov

Assistant Attorney General for the Tax Division Kathryn Keneally and U.S. Attorney Melinda Haag for the Northern District of California announced that Pius Kampfen of Mill Valley, Calif., pleaded guilty today to an information charging him with willful failure to file the required reports of foreign bank accounts (FBAR) for a Swiss bank account he controlled.

According to the plea agreement, Kampfen was employed as an international banker for approximately 40 years until he retired in 2001. He retired as senior vice president and the senior west coast representative San Francisco of Julius Baer Bank.  As an international banker, he advised Julius Baer clients interested in international diversification about the bank’s investment management services.

Beginning in 2000, Kampfen was the beneficial owner of a number of bank accounts in Switzerland held in the name Albia Investments.  Between 2000 and June 2012, he maintained accounts in the name of Albia at UBS AG, Pictet & Cie, ABN-AMRO, Bank Vontobel and Baumann & Cie. For the years 2007, 2008 and 2009, Kampfen failed to report any of the Albia accounts on his income tax returns or file FBARs for the accounts despite the fact that he knew he was required to do so.

As part of his plea agreement, Kampfen has agreed to pay an FBAR penalty of $1,465,393 before he is sentenced. 

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

Sentencing has been scheduled for Oct. 4, 2013. Kampfen faces a maximum penalty of five years in prison and a fine of up to $250,000.

The case was investigated by IRS – Criminal Investigation, and is being prosecuted by Trial Attorney Katherine Wong of the Justice Department’s Tax Division and Assistant U.S. Attorney Thomas Moore.

Scott N. Powers, the former CEO of Arizona-based mortgage loan originator American Mortgage Specialists Inc. (AMS), and  David McMaster, a former officer of AMS, were sentenced today to serve 96 and 188 months in prison, respectively, for their roles in a $28 million scheme to defraud North Dakota-based BNC National Bank (BNC). 

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Timothy Q. Purdon of the District of North Dakota; Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Steve A. Linick, Inspector General of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) made the announcement. 

Powers and McMaster were sentenced by U.S. District Judge Daniel L. Hovland in the District of North Dakota.  In addition to their prison terms, Powers and McMaster were each ordered to pay a money judgment to the government of approximately $28,564,470 and also to pay restitution to BNC bank in that same amount.

Powers and McMaster pleaded guilty on Oct. 19, 2012, to conspiracy to commit bank fraud and wire fraud affecting a financial institution. 

According to court documents, Powers and McMaster conspired from October 2007 to April 2010 to defraud BNC by making false representations regarding the financial and operational condition of AMS in order to obtain funding from BNC and personal benefits for themselves.  Using funds provided by BNC under a participation agreement, AMS made residential real estate mortgage loans to borrowers and then sold the loans to banks and other lenders.  As part of their fraud, Powers and McMaster caused AMS to inflate the dollar amount of the sales and to delay sending email notifications to BNC when specific loans were sold, and then used funds from newly sold loans to make payments on the earlier-sold loans.  Powers and McMaster also caused false financial information about AMS to be sent to BNC, overstating AMS’s cash-on-hand and disguising delinquent tax payments being made to the Internal Revenue Service as marketing and advertising expenses.  

BNC was a national bank with headquarters in Bismarck, N.D., and offices in several states, including Arizona.  The bank was a member of the Federal Home Loan Bank of Des Moines, one of 12 regional banks established by Congress to support mortgage lending.  BNC’s holding company received approximately $20 million in federal funds from TARP, and the holding company injected approximately $18 million of the TARP funds into BNC.

The fraud resulted in a loss of over $28 million to BNC.  As a result of the loss, BNC had to sell off some of its assets and the bank was unable to make its required dividend payments to TARP for nearly two years on approximately $17 million the bank had received from TARP.
 
Lauretta Horton, the former Director of Accounting for AMS, and David Kaufman, the external auditor for AMS, were previously sentenced for offenses related to the fraud.

The investigation was conducted by agents assigned to SIGTARP and FHFA-OIG.  The case is being prosecuted by Trial Attorney Robert A. Zink and Senior Litigation Counsel Jack B. Patrick of the Criminal Division’s Fraud Section and by Assistant U.S. Attorney Clare Hochhalter of the District of North Dakota, with the assistance of Trial Attorneys Ann Marie Blaylock and Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section.

This case 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. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed 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.

WASHINGTON – A federal jury today convicted four individuals for their participation in a Medicare fraud scheme involving nearly $70 million in fraudulent billings by Hollywood Pavilion (HP), a mental health care hospital.

Today’s verdict was announced by 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.

Karen Kallen-Zury, 59, of Lighthouse Point, Fla., and Daisy Miller, 44, of Hollywood, Fla., were each found guilty of one count of conspiracy to commit wire fraud and health care fraud, five substantive counts of wire fraud and two substantive counts of health care fraud.  Michele Petrie, 64, of Ft. Lauderdale, Fla., was found guilty of one count of conspiracy to commit wire fraud and health care fraud and three substantive counts of wire fraud.  Kallen-Zury, Miller, Petrie and a fourth defendant, Christian Coloma, 49, of Miami Beach, Fla., were also convicted of one count of conspiracy to pay bribes in connection with Medicare, with Kallen-Zury and Coloma also each being convicted on five substantive counts of paying bribes.

“The defendants convicted today participated in a massive scheme that attempted to defraud the United States of approximately $70 million by taking advantage of Medicare beneficiaries,” said Acting Assistant Attorney General Raman.  “By paying bribes to a network of patient recruiters and falsifying documents, the defendants created the illusion of providing intensive psychiatric care to qualifying patients, when in reality they provided no care of substance.  Today’s verdict illustrates the success of the inter-agency Medicare Fraud Strike Force, which is dedicated to stamping out Medicare fraud.”

The defendants were charged in an indictment returned on Oct. 2, 2012.  Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through HP, a state-licensed psychiatric hospital located in Hollywood that purportedly provided, among other things, inpatient psychiatric care and intensive outpatient psychiatric care.  The defendants paid illegal bribes and kickbacks to patient brokers in order to obtain Medicare beneficiaries as patients at HP who did not qualify for psychiatric treatment.  The defendants then submitted claims to Medicare for those patients who were procured through bribes and kickbacks. 

Karen Kallen-Zury, the CEO and registered agent of HP, attempted to conceal the payment of bribes and kickbacks by creating false documents to make it appear as if legitimate services were being rendered. 

Evidence at trial established that Miller, the clinical director of HP’s inpatient facility, and Petrie, the head of HP’s intensive outpatient program, facilitated the payment of bribes to patient recruiters and oversaw the fraudulent admissions and treatment of unqualified patients. 

Trial evidence also demonstrated that Coloma, the director of physical therapy for an entity associated with HP, facilitated the payment of bribes and kickbacks, and he supervised the creation of false documents to conceal the bribery scheme.

From at least 2003 through at least August 2012, HP billed Medicare nearly $70 million for services that were not properly rendered, for patients that did not qualify for the services being billed and for claims for patients who were procured through bribes and kickbacks. 

The criminal case is being prosecuted by Trial Attorneys Robert A. Zink, Andrew H. Warren and Anne McNamara of the Criminal Division’s Fraud Section.  The case was 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.

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.

U.S. District Court Judge Peter G. Sheridan entered a consent decree of permanent injunction against Med Prep Consulting Inc., a Tinton Falls, N.J., pharmacy licensed by the state of New Jersey, the Justice Department announced today.  The permanent injunction was also entered against Gerald R. Tighe, president and owner of Med Prep.   
 
Although operating as a state-licensed pharmacy, until it recently halted production, Med Prep manufactured numerous sterile drug products, including pain medications, anesthesia, operating room drugs and oncology and dialysis drugs and did not receive patient-specific prescriptions. As set forth in the complaint filed by the United States on June 24, the United States Food and Drug Administration (FDA) conducted an inspection of defendants’ facility from March 15, 2013 to April 3, 2013, and documented numerous deviations from current good manufacturing practice requirements for drugs. In addition, Med Prep did not have approved new drug applications or approved abbreviated new drug applications for any of the products it produced.   
 
According to the complaint, the FDA found that the company failed to create and follow appropriate procedures to prevent contamination of drugs which were purported to be sterile. As stated in the complaint, FDA found that the company failed to properly clean and maintain its equipment to ensure the safety and quality of the drugs it manufactured, and that the company failed to conduct adequate investigations of injectable drugs that failed to meet minimum quality specifications. FDA’s recent inspection of the company followed reports that the company had distributed, to a Connecticut hospital, intravenous drug products containing visible contaminants that were confirmed to be mold. Med Prep voluntarily recalled all products in the field and has halted production.   

Compliance with current good manufacturing practice requirements helps assure that drugs meet the safety requirements of the law and have the identity and strength and meet the quality and purity characteristics that they purport to or are represented to possess. FDA regulations, which establish minimum current good manufacturing practice requirements for drugs, require manufacturers to control all aspects of the processes and procedures by which drugs are manufactured in order to prevent the production of unsafe and ineffective products.    
 
“Under this resolution, Med Prep cannot manufacture or distribute drugs until it fully complies with the consumer protections set forth in the law,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Patients who take injectable drug products contaminated with mold are at risk of major illness or death. This settlement requires Med Prep to clean up its act before its products are allowed to return to market."

The consent decree entered by the district court resolves the complaint by requiring Med Prep to take a wide range of actions to correct its violations and ensure that they do not happen again.  The injunction establishes a series of steps which must occur before Med Prep can resume drug manufacturing operations, including the retention of an expert to inspect the company’s manufacturing facility, the development and implementation of a remediation plan, and an inspection by FDA to confirm that the company’s manufacturing processes are fully compliant with the law.

“MedPrep put patients at risk by producing contaminated drugs under unacceptable conditions,” said Melinda K. Plaisier, Acting Associate Commissioner for Regulatory Affairs for the FDA. “The Department of Justice and FDA will continue to work together to protect the health of Americans by taking aggressive enforcement actions to ensure the safety of drugs.”    

Acting Assistant Attorney General Delery thanked the FDA for referring this matter to the Department of Justice and the U.S. Attorney’s office in New Jersey for their contributions to the case.  Phil Toomajian, Trial Attorney of the Consumer Protection Branch of the Civil Division of the Justice Department and Scott Kaplan, Associate Chief Counsel of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services, brought this case on behalf of the United States.

The Department of Justice today announced Jamie Larson, 49, pleaded guilty in U.S. District Court in Seattle to a federal hate crime relating to a racially-motivated assault of a 50-year-old Sikh man who works as a taxi cab driver.

Jamie Larson pleaded guilty to one count of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act that was enacted in October 2009. The indictment alleges that on Oct. 17, 2012, Larson assaulted the victim, who is from India, based upon the victim’s actual and perceived race, color and national origin, which included Middle Eastern and Arab descent. The defendant was arrested at the scene of the attack after a witness called 911.

 According to the documents filed in court, the victim was called to drive Larson to an address in Federal Way, Wash.  When the taxi arrived at the destination, the driver got out of the taxi and Larson got out and attacked the driver, grabbing his beard, pulling him to the ground, punching and stomping on his head and body.  Larson uttered racial slurs and insults about the vicitm’s perceived ancestry during the attack. The victim suffered damage to his back, shoulder and kidney.  He was hospitalized for more than a week and has undergone lengthy physical therapy.

 “This case is a testament to the Justice Department’s dedication to vigorously investigate and prosecute all racially-motivated attacks,” said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division.  “It is unacceptable that violent acts of hate committed because of someone’s race and ethnicity continue to occur, and the department will continue to use every available tool to identify and prosecute hate crimes whenever and wherever they occur.”

 “Acts of hate, such as this one, hurt not only the victim, but tear at our social fabric.  They cannot be tolerated in our community,” said U.S. Attorney for the Western Distrcict of Washington Jenny A. Durkan.  “The Shepard-Byrd Act is an important tool for holding defendants accountable.”

 
The charge carries a statutory maximum of 10 years in prison.  Sentencing is scheduled in front of U.S. District Judge John C. Coughenour on Nov. 5, 2013.

 
The Shepard-Byrd law criminalizes acts of physical violence causing bodily injury motivated by any person’s actual or perceived race, color, national origin, religion, sexual orientation, gender, gender identity or disability.

 
The matter was investigated by the Seattle Division of the FBI.  The Federal Way Police Department provided significant support in this prosecution. The case is being prosecuted by Assistant U.S. Attorney Bruce F. Miyake of the U.S. Attorney’s Office for the Western District of Washington and Trial Attorney Nicholas Durham of the U.S. Department of Justice’s Civil Rights Division.

A manufacturer and exporter of wind turbines based in the People’s Republic of China, two employees of that manufacturer and a former employee of a subsidiary of AMSC, a United States-based company formerly known as American Superconductor Inc., were charged today with stealing trade secrets from AMSC causing an alleged loss of more than $800 million to the company, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the Western District of Wisconsin John W. Vaudreuil. 

A federal grand jury in the Western District of Wisconsin returned an indictment charging Sinovel Wind Group Co. Ltd., dba Sinovel Wind Group (USA) Co. Ltd.; Su Liying, 36, the deputy director of Sinovel’s Research and Development Department; Zhao Haichun, 33, a technology manager for Sinovel; and Dejan Karabasevic, 40, a former employee of AMSC Windtec GmbH, a wholly-owned subsidiary of AMSC, with one count each of conspiracy to commit trade secret theft, theft of trade secrets and wire fraud.

“Today, we announce charges against Sinovel and three individuals for stealing proprietary wind turbine technology from AMSC in order to produce their own turbines powered by stolen intellectual property,” said Acting Assistant Attorney General Raman.  “This charged IP theft caused significant harm to a domestic company that develops cutting edge technology and employs Americans throughout the country.  Stamping out intellectual property theft is a top priority for this administration, and we will continue to work with our IP Task Force partners to ensure that American ingenuity is protected.”

“The allegations in this indictment describe a well-planned attack on an American business by international defendants--nothing short of attempted corporate homicide," said U.S. Attorney Vaudreuil.  “The Department of Justice and this office are committed to protecting American commerce and aggressively prosecuting those who seek to steal and use our intellectual property.  I commend the efforts of the FBI and their Austrian counterparts in this long-term international investigation, and the assistance provided by the owners and operators of the Massachusetts turbines." 

"The Sinovel case is a classic example of the growing insider threat facing our nation's corporations and their intellectual property,” said FBI Executive Assistant Director Richard McFeely. “The FBI will not stand by and watch the hemorrhage of U.S. intellectual property to foreign countries who seek to gain an unfair advantage for their military and their industries. We are actively working with our private sector and government partners to disrupt and impact those who have made it their mission to steal U.S. military and corporate secrets. Since 2008, our economic espionage arrests have doubled; indictments have increased five-fold; and convictions have risen eight-fold.”

Karabasevic headed the automation engineering department at AMSC Windtec in Klagenfurt, Austria.  Su and Zhao are Chinese nationals living in China, and Karabasevic is a Serbian national who lived in Austria, but now lives in Serbia.

            According to the indictment, AMSC developed and sold software and equipment to regulate the flow of electricity from wind turbines to electrical grids, and it considered the software and equipment to be trade secrets and proprietary information.  The software that runs the PM3000, a part of AMSC’s wind turbine electrical control system, was developed in Wisconsin and was stored on a computer in AMSC’s office in Middleton, Wis.  The PM3000 worked with other products, including AMSC’s Low Voltage Ride Through (LVRT) software.  The LVRT system is designed to keep a wind turbine operational when there is a temporary sag or dip in flow of electricity in the electrical grid. 

            Sinovel purchased software and equipment from AMSC for the wind turbines that Sinovel manufactured, sold and serviced.  According to the indictment, in March 2011, Sinovel owed AMSC more than $100 million for products and services previously delivered and had entered into contracts to purchase more than $700 million in products and services from AMSC in the future. 
 
The indictment alleges that the four defendants conspired to obtain AMSC’s copyrighted information and trade secrets in order to produce wind turbines and to retrofit existing wind turbines with LVRT technology, without having to pay AMSC for previously-delivered products and services, thereby cheating AMSC out of more than $800 million. 

The indictment alleges that Sinovel, through Su and Zhao, recruited Karabasevic to leave AMSC Windtec and join Sinovel, and to secretly copy intellectual property from the AMSC computer system.  The four defendants are charged with stealing the PM3000 source code from AMSC on March 7, 2011, and transmitting it by downloading it from an AMSC computer in Wisconsin to a computer in Klagenfurt. 

            The indictment alleges that following the theft of AMSC’s intellectual property, Sinovel commissioned several wind turbines in Massachusetts and copied into the turbines software compiled from the software stolen from AMSC.  The U.S.-based builders and operators of these Massachusetts turbines have cooperated in this investigation.

            If convicted, Sinovel faces a maximum penalty on each count of five years of probation and a fine of twice the gross gain or loss, meaning Sinovel would face a fine for each count charged of up to twice the alleged loss of more than $800 million.

            If convicted, Su, Zhao and Karabasevic each face a maximum penalty of five years in prison on the conspiracy charge, 10 years in prison for theft of a trade secret and 20 years in prison for wire fraud.   

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

The case is being investigated by the Madison, Milwaukee and Boston offices of the FBI; the FBI Legal Attachés’ Offices in Vienna, Austria and Beijing; the FBI Criminal Investigative Division; the FBI Intellectual Property Rights Unit; the Bundeskriminalamt (Federal Criminal Intelligence Service) and the Bundesministerium Fuer Justiz (Federal Ministry of Justice) in Austria; the Landeskriminalamt - Klagenfurt and the Staatsanwaltschaft - Klagenfurt (Criminal Investigative Police and State Prosecutor's Office – Klagenfurt, Austria); and with the assistance of the Justice Department’s Office of International Affairs.  The case is being prosecuted by Assistant U.S. Attorneys Timothy M. O’Shea and Munish Sharda, and Trial Attorney Brian Levine of the Criminal Division’s Computer Crime and Intellectual Property Section.

This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force).  Attorney General Eric Holder created the IP Task Force, which is led by the Deputy Attorney General, to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. To learn more about the IP Task Force, go to: www.justice.gov/dag/iptaskforce.

U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky, and Assistant Attorney General Thomas E. Perez of the Civil Rights Division, announced today that Stephen Molen, a Sheriff’s Deputy with the Pulaski County Sheriff’s Office in Pulaski County, Ky., was indicted by a federal grand jury on two counts of violating the civil rights of victims by using excessive force in October 2009 and October 2011.

 
Count one of the indictment alleges that on Oct. 2, 2009, Molen assaulted a victim identified in the indictment as “D.W.,” resulting in bodily injury.  Count two of the indictment alleges that on Oct.7, 2011, Molen assaulted a victim identified in the indictment as “G.C.,” also resulting in bodily injury.

 
 If Molen is convicted of these charges, he will face a statutory maximum punishment of 10 years in prison for each count.

The investigation was conducted by the Louisville Division of the FBI.  The case will be prosecuted by Assistant U.S. Attorneys Pat Molloy and Ron Walker of the Eastern District of Kentucky and Civil Rights Division Trial Attorney Ali Ahmad.

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

Yesterday a federal grand jury in Portland, Ore., indicted George Allen Mason Jr., 23, and his wife, Saraya Sophia Lisa Gardner, 23, on charges related to the assault of a 26-year-old gay man who was walking his dog with his boyfriend on the streets of Hillsboro, Ore., which occurred because of animus against the victim’s sexual orientation.

 Mason is charged with violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act that was enacted in October 2009.  The indictment alleges that Mason struck the victim with a metal tool because of the victim’s actual or perceived sexual orientation, thereby causing bodily injury to the victim. 

 Gardner is charged with one count of obstruction of justice for knowingly and intentionally misleading Hillsboro Police Department (HPD) officers in statements she provided in connection with the investigation of Mason.  The indictment alleges that Gardner lied about Mason’s whereabouts at the time HPD officers were searching for him and that she further misled HPD officers when she repeatedly changed her story as to the weapon that Mason used to strike the victim.

 Mason faces a statutory maximum penalty of 10 years in prison.  Gardner faces a statutory maximum penalty of 20 years in prison.

 This case is being investigated by the Portland Division of the FBI in cooperation with HPD.  It is being prosecuted by Assistant U.S. Attorney Hannah Horsley of the District of Oregon and Trial Attorney Fara Gold of the Civil Rights Division of the Department of Justice.

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

The Justice Department announced today that Lawrence Properties Inc., Lawrence at Lakewood LLC, Michael Lawrence, and Williams Bounds have agreed to pay $35,000 to settle a lawsuit involving violations of the Fair Housing Act. The lawsuit alleged that the defendants denied housing to an African American woman and her family because of race. The lawsuit also alleged that the owner and the regional manager of Lawrence Properties communicated to employees a company policy of not renting to African Americans.

 
Under the consent order, which was approved today by the U.S. District Court for the Middle District of Alabama, the defendants will pay $25,000 to the family who was denied housing and $10,000 to the United States as a civil penalty. In addition, the order prohibits the defendants from discriminating in the future against prospective tenants based on race, mandates the implementation of a non-discriminatory rental policy, and requires the defendants and their employees to receive training on the Fair Housing Act.

 
“No family should be denied housing because of their race,” said Eric Halperin, Senior Counsel and Special Counsel for Fair Lending in the Civil Rights Division. “We are committed to enforcing the Fair Housing Act to ensure that everyone has the freedom to choose where they live.”

 
“Housing is a need that everyone shares,” stated George L. Beck Jr., U.S. Attorney for the Middle District of Alabama.  “To deny someone their choice of housing based on discrimination should not and will not be tolerated.”

 
The lawsuit, filed in September 2012, arose as a result of a complaint filed with the U.S. Department of Housing and Urban Development (HUD). After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the Justice Department. The lawsuit alleged that the defendants violated the Fair Housing Act by refusing to rent a lot at a mobile home park to the HUD complainant and her family due to a discriminatory policy against renting to African Americans. The suit also alleged that, as a result of the discriminatory policy, the defendants engaged in a pattern or practice of discrimination or denied rights protected by the Fair Housing Act to a group of persons.  

 
“No residential community can maintain an exclusion based on race,” said Bryan Greene, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Justice Department are committed to taking action anytime a family is subjected to unlawful discrimination.”

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

The Justice Department announced today that it has reached an agreement with Macy’s Retail Holdings and other Macy’s entities (Macy’s) resolving allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA).  Macy’s employs approximately 180,000 employees in the United States.

 
The investigation was initiated based on several calls to the Justice Department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) worker hotline regarding potential immigration-related unfair employment practices. Based on the investigation, the department determined that Macy’s engaged in unfair documentary practices against work-authorized immigrant employees during the employment eligibility reverification process and that some employees suffered economic harm through lost work or seniority as a result. The INA’s anti-discrimination provision prohibits employers from treating workers differently in the employment eligibility verification or reverification process by demanding more or different documents, or by limiting the worker’s choice of documents, based on an individual’s immigration status or national origin.

 
According to the settlement agreement, Macy’s agrees to revise its employment eligibility reverification policies and procedures and to provide training to its human resources personnel across the country on the INA’s anti-discrimination provision.  Macy’s also agrees to pay $175,000 in civil penalties to the United States, and to create a $100,000 back pay fund to compensate any individuals who suffered lost wages or loss of seniority as a result of its practices.  Under the agreement, Macy’s employment eligibility verification practices will be subject to monitoring by the department and reporting requirements for a period of two years.

  
“Employers must ensure that they follow correct procedures during the reverification of employment authorization of non-U.S. citizens,” said Gregory Friel, Deputy Assistant Attorney General for the Civil Rights Division. “Given the size of their workforce, national employers are particularly encouraged to evaluate their policies and practices and make use of the division’s no-cost technical assistance to ensure compliance with the INA’s anti-discrimination provision.”

 
OSC is responsible for enforcing the anti-discrimination provision of the INA.  The case was handled by Liza Zamd and Ronald Lee, OSC trial attorneys.   For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TTY for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TTY for hearing impaired), sign up for a 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 the filing of a lawsuit against the Reading Parking Authority in the city of Reading, Pa., alleging that the Reading Parking Authority discriminated against former employee Henry Perez, as well as other current and former employees, in violation of Title VII of the Civil Rights Act of 1964 by subjecting them to harassment based upon their national origin.  According to the complaint, after Perez complained about the harassment, he was subjected to retaliation, also in violation of Title VII.  Title VII is a federal statute that prohibits discrimination on the basis of race, color, national origin, sex and religion and prohibits retaliation against an employee who opposes an unlawful employment practice or because the employee has made a charge or participated in an investigation, proceeding or hearing under the Act.

 
The suit, filed in the U.S. District Court for the Eastern District of Pennsylvania, alleges that these employees were subjected to pervasive ethnic slurs, offensive comments and threats of physical harm by their co-workers and supervisors beginning as early as 2007 and continuing over a period of years.  The complaint further alleges that, despite timely complaints about the harassment by the workers to their supervisors, the Reading Parking Authority failed to take meaningful steps to stop the harassment, prevent further harassment or discipline the harassers but, instead, disciplined Perez because his complaints of discrimination were offensive to his co-workers.   Through this lawsuit, the United States seeks declarative and injunctive relief requiring the Reading Parking Authority to develop and implement policies that prevent its employees from being subjected to harassment based upon national origin and retaliation, as well as monetary damages for the victims of the employer’s discriminatory actions. 

 
“No one should have to endure unlawful harassment due to their national origin or retaliation for speaking out against such discrimination,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division. “Through our partnership with the EEOC, the Civil Rights Division continues to vigorously enforce the nation’s laws barring discrimination in employment and to work to realize the promise of equal employment opportunity.”  

 
Perez filed a charge of discrimination and retaliation with the Equal Employment Opportunity Commission (EEOC), whose Philadelphia District Office investigated the matter, determined there was reasonable cause to believe that discrimination and retaliation had occurred, and referred the matter to the Department of Justice.

 
“The EEOC is committed to ensuring that employees are not subjected to unlawful discrimination and harassment based on their national origin. Employers must stop cruel and humiliating victimization of vulnerable employees when it is brought to their attention, instead of taking adverse action against them," said EEOC District Director Spencer H. Lewis Jr., of the EEOC’s Philadelphia District Office.  “Our close collaboration with the Department of Justice is vital to ensuring that workplaces are free from bias.”

 
The continued enforcement of Title VII has been a priority of the Justice Department’s Civil Rights Division.  Additional information about the work of Civil Rights Division is available on its website at www.usdoj.gov/crt/emp/index.html

Four Northern California real estate investors have agreed to plead guilty for their role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Wesley Barta of Oakland, Irma Galvez of Pacheco, Calif., Stan Kahan of Berkeley, Calif., and Joseph Vesce of San Francisco.

To date, as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California, 35 individuals, including Barta, Galvez, Kahan and Vesce, have agreed to plead or have pleaded guilty.

“These conspirators manipulated and suppressed the competitive process through their fraudulent and collusive conduct to the detriment of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division will continue to pursue those responsible for these illegal activities.”

According to court documents, for various lengths of time between June 2008 and January 2011, Barta and Vesce conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County, Calif.  Barta and Vesce were also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Contra Costa County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.

The same charges were brought against Galvez and Kahan for their involvement in similar conduct in Alameda County, Calif., from November 2008 through May 2010.

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

“The continued success of our investigation into the bid rigging conspiracies at Northern California public foreclosure auctions is evident in today’s four guilty pleas,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The FBI will remain focused with the Antitrust Division in holding those accountable for such illegal acts.”

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

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

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

**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**

A former employee of the Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response (HHS-ASPR) was sentenced today to serve six months in prison for his role in a scheme to defraud the United States by submitting fraudulent employment offers in order to claim retention bonuses totaling $138,875, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division. 

 Michael A. Balady, 62, of Springfield, Va., was sentenced by U.S. District Judge Rudolph Contreras in the District of Columbia.  In addition to his prison term, Balady was sentenced to serve six months of home confinement and two years of supervised release, and he was ordered to pay a fine of $22,000. 

Balady worked in the HHS-ASPR initially as the director of acquisition management systems in ASPR’s Biological Advanced Research and Development Authority and later as the acting director of ASPR’s Office of Acquisitions, Management, Contracts and Grants.  As part of his plea agreement, Balady admitted that he conspired with an employee of a communications firm based in Alexandria, Va., to fabricate employment offers for a position with that firm in order to justify retention bonuses paid to him by HHS.  Retention bonuses are monetary incentives paid by HHS to employees deemed essential to its mission who would be likely to leave in the absence of such a bonus. 

From 2009 until 2012, Balady improperly received retention bonus payments totaling $94,940.  In June 2012, HHS approved another retention bonus in the amount of $38,875, but that bonus was never paid to Balady. 

 This case was investigated by the HHS Office of the Inspector General and was prosecuted by Trial Attorneys Richard B. Evans and Mark Angehr of the Criminal Division’s Public Integrity Section.

A federal grand jury returned a 30-count indictment against Dzhokhar A. Tsarnaev for his alleged role in using weapons of mass destruction at the Boston Marathon to kill three individuals and maim or seriously injure many others, as well as for using a firearm to intentionally kill Massachusetts Institute of Technology (MIT) Police Officer Sean Collier.

Tsarnaev, aka “Jahar Tsarni”, 19,  a U.S. citizen residing in Cambridge, Mass., was charged today by indictment with the use of a weapon of mass destruction resulting in death and conspiracy; bombing of a place of public use resulting in death and conspiracy; malicious destruction of property resulting in death and conspiracy; use of a firearm during and in relation to a crime of violence; use of a firearm during and in relation to a crime of violence causing death; carjacking resulting in serious bodily injury; interference with commerce by threats or violence; and aiding and abetting. 

“This indictment is the result of exemplary cooperation between federal prosecutors and a wide range of federal, state, and local law enforcement agencies to investigate the horrific attacks on the Boston Marathon two months ago,” said Attorney General Eric Holder.  “The Department is firmly committed to achieving justice on behalf of all who were affected by these senseless acts of violence.  And today’s action proves our unyielding resolve to hold accountable – to the fullest extent of the law – anyone who would threaten the American people or attempt to terrorize our great cities.  I would like to thank our law enforcement partners, the FBI, the Department's National Security Division, the U.S. Attorney’s Office for the District of Massachusetts and every investigator, agent, officer, attorney, analyst, and support staff member whose courage and commitment continues to make our communities and our nation safer.”

“Today’s indictment is the result of the dedicated and collective efforts of law enforcement and intelligence partners, working with a sense of urgency and purpose to find those responsible for these deadly attacks,” said FBI Director Robert S. Mueller. “These continuing efforts reflect the pursuit of justice for those who lost their lives, and for the scores of individuals who were injured.”

“Today’s charges reflect the serious and violent nature of the events that occurred on April 15th and the tragic series of events that followed,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts.  “The defendant’s alleged conduct forever changed lives.  The victims, their families and this community have shown extraordinary strength and resilience in the face of this senseless violence, and it is with the hundreds of injured, as well as Krystle, Lingzi, Martin and Sean in mind that we proceed to ensure that justice is served in this case.”

“Our hearts go out to the victims of these horrendous acts of violence, and our gratitude to the courageous law enforcement officers who have given so much to protect the people of Boston and the United States,” said John Carlin, Acting Assistant Attorney General of the Justice Department’s National Security Division.  “We remain committed to obtaining justice in this matter and will continue to work side by side with our partners throughout the law enforcement and intelligence communities to protect the American people from future harm.”

The indictment alleges that beginning no later than February 2013 and continuing until Tsarnaev was apprehended on April 19, 2013, Tsarnaev and his brother Tamerlan conspired to use improvised explosive devices (IEDs) against people, property and places of public use.  Specifically, the indictment alleges that on April 15, 2013, during the 117th running of the Boston Marathon, Tsarnaev and his brother placed IEDs  among the crowds of spectators who were cheering the runners on Boylston Street towards the marathon finish line.  After placing the IEDs among the crowd, the indictment alleges, Tsarnaev and his brother detonated the bombs seconds apart, killing three people, maiming and injuring many more, and forcing a premature end to the marathon.   The indictment alleges that the IEDs were constructed from pressure cookers, explosive powder, shrapnel, adhesives and other items, and were designed to shred skin, shatter bone and cause extreme pain and suffering, as well as death.

The indictment also alleges that on April 18, 2013, the FBI released photographs of Tsarnaev and his brother, identifying them as suspects in the marathon bombings.  These photographs were widely disseminated on television and elsewhere.  The indictment alleges that hours later on April 18, Tsarnaev and his brother, armed with five IEDs, a Ruger P95 semiautomatic handgun, ammunition, a machete and a hunting knife, drove in their Honda Civic to the MIT campus, where they shot MIT Police Officer Sean Collier and attempted to steal his service weapon. 

The indictment further alleges that shortly after Tsarnaev and his brother killed Officer Collier, they carjacked a Mercedes, kidnaped the driver, and forced him to drive to a gas station, robbing him of $800 along the way.  After the driver managed to escape, the brothers are alleged to have driven the carjacked vehicle to the vicinity of Laurel Street and Dexter Avenue in Watertown, Mass., where Watertown police officers located them and tried to apprehend them.  The indictment alleges that the brothers fired at the police officers and used four additional IEDs against them; then Tsarnaev reentered the carjacked vehicle, drove it directly at the officers, running over his brother as he managed to escape.  Tsarnaev is alleged to have hidden in a dry-docked boat in a Watertown backyard until his arrest the following night. 

Seventeen of the charges authorize a penalty of up to life in prison or the death penalty.  The remainder authorize a maximum penalty of life in prison or a fixed term of years.  Tsarnaev is scheduled to be arraigned on July 10, 2013.

U.S. Attorney Carmen M. Ortiz; Middlesex County, Mass., District Attorney Marian T. Ryan; Suffolk County, Mass., District Attorney Daniel F. Conley; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Division; Boston Police Commissioner Edward Davis; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; Kenneth J. Croke, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Boston Field Division; and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) in Boston, made the announcement today during a press conference. 

This investigation was conducted by the FBI’s Boston Division, the Boston Police Department, the Massachusetts State Police, and member agencies of the Boston Joint Terrorism Task Force, which is comprised of more than 30 federal, state and local law enforcement agencies, including the ATF, ICE-HSI, U.S. Marshals Service, U.S. Secret Service, the Massachusetts Bay Transit Authority and others.  In addition, the Watertown Police Department, the Cambridge Police Department, the MIT Police Department, the Boston Fire Department, the National Guard and police, fire and emergency responders from across Massachusetts and New England played critical roles in the investigation and response.

This case is being prosecuted by Assistant U.S. Attorneys William Weinreb and Aloke Chakravarty of the U.S. Attorney’s Office for the District of Massachusetts' Anti-Terrorism and National Security Unit, Nadine Pellegrini, Chief of its Major Crimes Unit, and Trial Attorneys of the U.S. Department of Justice's National Security Division's Counterterrorism Section and its Criminal Division.

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

Related Materials:

Indictment

A jury in El Paso, Texas, today convicted Keith Nicholas Aiken, 31, of making false statements to law enforcement while serving as a civilian military employee stationed in Afghanistan, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Western District of Texas Robert Pitman; Special Agent in Charge David Iacovetti of U.S. Secret Service Honolulu Field Office; and Resident Agent in Charge Ed Garcia of the U.S. Secret Service El Paso Resident Office

On Jan. 9, 2013, Aiken was charged in U.S. District Court in the Western District of Texas with two counts of making false statements to law enforcement. 

According to evidence presented at trial, on Jan. 13, 2011, Aiken reported to the Deputy Command Office for the 4-401st Army Field Support Brigade in Kandahar, Afghanistan, that a co-worker had threatened to shoot President Obama and threatened that a friend was prepared to blow up Air Force One.  Aiken repeated that statement to the U.S. Army Criminal Investigation Command (CID) and later to the U.S. Secret Service.  Evidence introduced at trial established that to investigate the threat, the Secret Service deployed agents to Afghanistan, diverting resources from a significant investigation.   The trial evidence further showed that approximately six weeks after reporting the alleged threat, Aiken confessed that he had fabricated the story because the co-worker was opinionated and had made statements that offended Aiken, and he was hoping that the investigation of the threat would lead to the co-worker’s transfer off the base.

At sentencing, scheduled for Sept. 13, 2013, Aiken faces a maximum penalty of five years in prison on each count.

The case was prosecuted by Senior Trial Attorney Teresa Wallbaum of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Daphne Newaz of the Western District of Texas (El Paso Division).  The case was investigated by the U.S. Secret Service’s Honolulu, Hawaii and El Paso, Texas offices.

A member of the Aryan Brotherhood of Texas (ABT) was sentenced today to serve 150 months in prison for his role in the ABT’s criminal enterprise, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

James Marshall Meldrum, aka “Dirty,” 40, of Dallas, was sentenced today by U.S. District Judge Sim Lake in the Southern District of Texas.  In addition to his prison term, Meldrum was sentenced to serve five years of supervised release.

On Jan. 31, 2013, Meldrum pleaded guilty to one count of conspiracy to commit racketeering offenses (RICO). 

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

Meldrum admitted to being an ABT gang member and to trafficking in methamphetamine, as well as to severely beating a subordinate gang member.

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

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

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

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

WASHINGTON–  El Departamento de Justicia anunció hoy que ha llegado a un acuerdo con Macy’s Retail Holdings y otras compañías de Macy (Macy’s) que resuelve los alegatos que la empresa violó la disposición contra la discriminación de la Ley de Inmigración y Nacionalidad (INA). Macy’s cuenta con aproximadamente 180.000 empleados en los Estados Unidos.

La investigación se inició sobre la base de varias llamadas a la línea directa del trabajador de la  Oficina del Consejero Especial Para Prácticas Injustas en el Empleo Relacionadas a  Inmigración (OSC) del Departamento de Justicia en lo que se refiere a las prácticas de empleo injustas relacionadas potencialmente con la inmigración. En base a esta investigación, el Departamento determinó que Macy’s está involucrado en prácticas documentales injustas contra empleados inmigrantes autorizados para trabajar durante el proceso de re-verificación de elegibilidad de empleo y que algunos empleados, en consecuencia, han sido afectados económicamente a través de la pérdida de su puesto de trabajo o de su antigüedad en el puesto. La disposición contra la discriminación de la INA prohíbe a los empleadores tratar a los trabajadores de manera diferente en el proceso de verificación o re-verificación de elegibilidad de empleo al exigir documentos adicionales o diferentes, o limitando la elección de documentos del trabajador, en base a un estado migratorio o a un origen nacional.

Según el acuerdo, Macy’s se compromete a revisar sus políticas y procedimientos de re-verificación de elegibilidad de empleo, y a capacitar a su personal de recursos humanos en todo el país en lo relativo a la disposición contra la discriminación de la INA. Macy’s también se compromete a pagar 175.000 dólares en multas civiles a los Estados Unidos, y a crear un fondo de devolución de 100.000 dólares para compensar a cualquier trabajador que haya perdido sus salarios o su antigüedad en el puesto como resultado de dichas prácticas. En virtud de este acuerdo, las prácticas de verificación de elegibilidad de empleo de Macy’s estarán sujetas a la supervisión del Departamento y deberán presentar sus informes correspondientes por un período de dos años.

 "Los empleadores deben asegurarse de que están siguiendo los procedimientos correctos durante la re-verificación de autorización de empleo de los no-ciudadanos americanos ", dijo Gregory Friel, Asistente del Representante del Procurador de la Nación en la División de Derechos Civiles. "Dado el tamaño de su fuerza de trabajo, los empleadores nacionales están particularmente obligados a evaluar sus políticas y prácticas y a hacer uso de la asistencia técnica gratuita de la División para asegurar el cumplimiento de la disposición contra la discriminación de la INA."

OSC es responsable de hacer cumplir la disposición contra la discriminación de la INA. El caso fue manejado por Liza Zamd y Ronald Lee, abogados litigantes de la OSC. Para obtener más información acerca de la protección contra la discriminación en el empleo bajo las leyes de inmigración, llame a la línea directa del trabajador OSC, 1-800-255-7688 (1-800-237-2525, TTY para personas con problemas de audición), llame a la línea directa del empleador de la OSC, 1-800 -255-8155 (1-800-362-2735, TTY para personas con problemas de audición), inscríbase en un seminario gratuito en www.justice.gov/about/osc/webinars.php, escriba a osccrt@usdoj.gov o visite la página web www.justice.gov/crt/about/osc.

A federal grand jury in Salt Lake City today returned an indictment charging Paul Ben Zaccardi, a resident of Sandy, Utah, with five counts of presenting false, fictitious and fraudulent claims to the United States, and three counts of passing fictitious obligations.

According to the indictment, on or about Aug. 20, 2008, Zaccardi submitted five false claims to the United States by filing income tax returns for the years 1996 through 2000, seeking refunds to which he was not entitled.  Altogether, Zaccardi sought refunds totaling $1,510,251.  The indictment further charges that Zaccardi submitted fictitious obligations to the United States that purported to pay his tax debts.  The first of these was submitted in July 2008 and claimed to be valued at $5,000,000; the second and third were submitted in November of 2009 and claimed to be valued at $300,000,000 each. 

An indictment is not a finding of guilt.  Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Zaccardi faces a maximum of 100 years in prison. 

The case is being investigated by IRS-Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Michael Romano and Stuart Wexler.  

Related Materials: 

United States v. Paul Ben Zaccardi
Indictment (PDF)

A federal grand jury in Salt Lake City today returned a superseding indictment charging Dick Reid Jenkins, a resident of Heber City, Utah, with 18 counts of presenting false, fictitious and fraudulent claims to the United States and one count of passing a fictitious obligation.

According to the superseding indictment, in September 2008, Jenkins filed a false 2007 income tax return for himself which claimed an income tax refund of $402,920. Then, in October 2008, Jenkins filed a false amended 2004 income tax return, which claimed an income tax refund of $434,261. Both false claims were based on the use of false Form 1099-OID, Original Issue Discount. In addition to his own false returns, from September 2008 through February 2009, Jenkins caused 16 other false federal income tax returns to be filed on behalf of other individuals. These other false tax returns also used false Forms 1099-OID and claimed federal income tax refunds totaling $8,407,623. The indictment further alleges that Jenkins was licensed by the state of Utah as a certified public accountant at all times relevant to these charges.

Additionally, according to the superseding indictment, on June 30, 2008, Jenkins passed and presented a false and fictitious financial instrument to the U.S. Department of the Treasury in the amount of $300,000,000.

An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty.  If convicted, Jenkins faces a statutory maximum penalty of 25 years in prison for each count of submitting fictitious obligations to the United States and five years in prison for each count of presenting false, fictitious, and fraudulent claims to the United States.

The case is being investigated by IRS-Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Stuart Wexler and Michael Romano.

SunCoke Energy Inc. and two of its subsidiaries have agreed to pay $1.995 million to resolve alleged Clean Air Act violations of emission limits at the Gateway Energy and Coke plant in Granite City, Illinois, and the Haverhill Coke plant in Franklin Furnace, Ohio, announced the Justice Department and the U.S. Environmental Protection Agency.  

The companies will also spend $255,000 on a lead abatement project in southern Illinois to reduce lead hazards in owner-occupied low income residences with priority given to families with young children or pregnant women.  The companies will pay a penalty of $1.27 million to the United States, $575,000 to the State of Illinois, and $150,000 to the State of Ohio.  Illinois and Ohio are co-plaintiffs in this case.
 
“This settlement is good news for communities in Illinois and Ohio, who will benefit from these substantial reductions in harmful air pollution and enjoy cleaner, healthier air to breathe for many years to come,” said Acting Assistant Attorney General Robert G. Dreher.  “It also reflects our continuing commitment to protecting the people and environment of the United States through the vigorous enforcement of the Clean Air Act.”

“The substantial upgrades required by today’s settlement will reduce air pollution that can harm public health and the environment,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance.  “EPA is committed to reducing toxic air pollution from sources that have an impact on the health of communities.”

“This settlement provides a long-term solution to protect air quality and control emissions,” said Ohio Attorney General Mike DeWine. “We will continue to work with other agencies to protect Ohio families from environmental harm.”

“The facility upgrades and stricter emission limits mandated in this settlement will dramatically reduce harmful pollution levels and improve overall air quality in the communities surrounding these facilities,” said Illinois Attorney General Lisa Madigan.

In addition, the companies will spend approximately $100 million at the two heat recovery coking facilities to install equipment known as heat recovery steam generators (HRSGs) to ensure that hot coking gases are routed to pollution control equipment and not vented directly into the atmosphere.  If future emissions exceed the requisite threshold at a third facility, in Middletown, Ohio, then SunCoke will have to install an additional HRSG at that facility to prevent uncontrolled venting of coking gases.  They will also spend an estimated $700,000 on equipment to continuously monitor sulfur dioxide (SO2) emissions at the Gateway and Haverhill facilities.
 
Further, the companies have agreed to accept more stringent emission limits than required in their current permits for SO2 and particulate matter and, in the case of the Gateway Facility, lead.  SO2 contributes to acid rain and exacerbates respiratory illness, particularly in children and the elderly.  Exposure to particulate pollution has been linked to health impacts that include decreased lung function, aggravated asthma and premature death in people with heart or lung disease.

 The primary violations alleged relate to excessive bypass venting of hot coking gases directly to the atmosphere, resulting in excess SO2 and particulate matter emissions from the facilities’ waste heat and main stacks, in violation of applicable permit limits.  Coke oven emissions are a known human carcinogen.  Chronic (long-term) exposure in humans can result in conjunctivitis, severe dermatitis and lesions of the respiratory system and digestive system.  The additional equipment installed at the facilities will result in estimated emissions reductions of over 1200 tons per year of SO2, over 130 tons per year of particulate matter, 252 tons per year of hydrochloric and sulfuric acid gases and over 1800 pounds per year of lead.

Both facilities are located in areas that do not meet federal health-based standards for soot.  The Illinois facility is located in an area that also does not meet the federal air pollution standard for lead.

Reducing illegal emissions of toxic air pollutants at facilities that have a significant impact on air quality and health in communities is one of EPA’s national enforcement priorities.  Excess emissions from chemical plants and other industries can result in releases of hazardous air pollutants, or air toxics that are known or suspected to cause cancer, birth defects, and seriously impact the environment.
The Consent Decree, lodged in the U.S. District Court for the Southern District of Illinois, is subject to a 30-day public comment period and approval by the federal court.  It is available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html

U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands, was invited by the National Organization of Sisters of Color Ending Sexual Assault (SCESA) to be a speaker at the first ever U.S. Territory Summit on Violence Against Women held on June 25, 2012, in Saipan, Northern Mariana Islands. The Conference was presented by the Criminal Justice Planning Agency and the Northern Marianas Coalition Against Domestic and Sexual Violence in partnership with the National Organization of Sisters of Color Ending Sexual Assault and the Office on Violence Against Women, United States Department of Justice. 

U.S. Attorney Limtiaco was a presenter with representatives from Guam about best practices in Guam addressing violence against women, including prevention, enforcement and treatment efforts at the federal and local levels.  She also discussed the efforts of and progress made by law enforcement, courts and victim advocates and coalitions in the NMI.

United States Attorney Limtiaco spoke about sharing the sense of urgency to speak out against the escalating violence against women in our island communities.  She also spoke about reaching out to victims and survivors of far too often lethal crimes, and to communicate that there is help and hope. 

U.S. Attorney Limtiaco also stated that domestic violence, dating violence, sexual assault and stalking, continue to be a significant public health crisis especially when statistics show that:

• one in four women will be physically or sexually assaulted by a spouse or partner at some point in her lifetime;
• last year, one in 10 teens reported being physically hurt on purpose by a boyfriend or girlfriend;
• last year, one in nine teen girls was forced to have sex;
• last year, one in five young women have been sexually assaulted while they were in college; and
• estimates show that more than 2 million adults and more than 25 million children are exposed to domestic violence every single year;

The Department of Justice is committed to the prevention of violence against women and ensuring the safety and protection of our victims and survivors.  U.S. Attorney Limtiaco shared that U.S. Attorney General Eric H. Holder, Jr. has held that the United States Attorney community plays a critical role in raising the awareness of and preventing domestic violence and sexual assault, and holding offenders accountable for these crimes.  The Department of Justice will continue to take every possible step to enforce laws protecting victims of violence and to provide resources to assist victim service providers.

Two individuals were arrested on a federal warrant alleging that they operated a series of fraudulent businesses targeting Spanish-speaking consumers, the Justice Department and the U.S. Postal Inspection Service announced today. The criminal complaint, charging Daniel Carrasco, 54, of Miramar, Fla., and Federico Martin Gioja, 45, also of Miramar, alleges that the pair incorporated, owned, and ran Florida companies that used a phone room in Argentina to extract money from consumers using lies and extortion.

In addition to the criminal complaint, the Justice Department filed a civil case against Carrasco, Gioja, Romina Tasso and their businesses, seeking an injunction to prevent further fraud and an asset freeze to prevent dissipation of funds obtained from consumers.

Carrasco and Gioja will make their first appearances in court today.

According to the civil complaint and the affidavit filed in support of the criminal complaint, the case was the result of a referral from Spanish-language television station, Univision. Companies belonging to Carrasco and Gioja are alleged to have falsely claimed an affiliation with Univision and purported to sell products such as vitamins, lotions, medical insurance, and English-language training products. However, according to the documents, the companies frequently did not deliver products ordered by consumers. The companies allegedly did not have many of the products they promised to send to consumers, and so consumers received other products instead.

According to the civil and criminal complaints, after consumers refused delivery of the companies’ shipments, employees of the Argentinian phone room used by Carrasco and Gioja called and falsely threatened the consumers with arrest, deportation, or fines on their gas and electric bills.

“This case demonstrates our commitment to use every tool at our disposal -- including asset freezes, injunctive relief, and criminal prosecution -- against companies that seek to lie, extort, threaten, and defraud Americans,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Protecting consumers from fraud continues to be a top priority for the Department of Justice.”

According to the criminal and civil complaints, Carrasco and Gioja routinely changed the names of the companies under which they did business to evade complaints, regulators, and law enforcement. The businesses allegedly were contacted by a variety of state agencies regarding their illicit practices. In emails cited in the affidavit in support of arrest, those working with Carrasco and Gioja referred to companies tainted by complaints as “burnt.” Rather than changing their practices, the defendants allegedly incorporated new companies and started the same illegal practices again.

U.S. Attorney Wifredo A. Ferrer stated, “These defendants specifically targeted Spanish-speaking victims, pretending to be affiliated with the Univision television network, to sell their products from their phone room in Argentina. In fact, however, the defendants had absolutely no connection to Univision, and their companies did not deliver the products ordered by consumers. As this case illustrates, the U.S. Attorney’s Office is committed to investigating and prosecuting fraudsters, both domestic and international, whose schemes defraud American consumers.”

“Postal Inspectors will continue to investigate cases involving fraud against consumers and will vigorously pursue those individuals who use the mail in furtherance of their criminal schemes,” said Ronald Verrochio, U.S. Postal Inspector in Charge in Miami.

Acting Assistant Attorney General Delery commended the investigative efforts of the Postal Inspection Service, and thanked the U.S. Attorney’s Office in the Southern District of Florida for their contributions to the case. The civil case is being handled by Trial Attorney Jessica Gunder of the U.S. Department of Justice’s Consumer Protection Branch. The criminal case is being prosecuted by Assistant Director Richard Goldberg with the Consumer Protection Branch.

A criminal complaint is only an accusation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. A civil complaint contains allegations only and the defendants will have the opportunity to challenge those allegations in court.

Michael Mancil Brown was indicted today by a federal grand jury in Nashville, Tenn., for allegedly engaging in an extortion and wire fraud scheme involving former Presidential candidate Mitt Romney’s tax returns, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Todd Hudson, Special Agent in Charge of the U.S. Secret Service, Nashville Field Office.

Brown, 34, of Franklin, Tenn., was charged in U.S. District Court in the Middle District of Tennessee with six counts of wire fraud and six counts of extortion.

The indictment alleges that Brown devised a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers LLP and others by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010.

According to the indictment, Brown allegedly caused a letter to be delivered in August 2012 to the offices of PricewaterhouseCoopers in Franklin.  The letter demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns.  The letter also invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account.

The indictment alleges that Brown delivered similar letters to the offices of the Democratic and Republican parties in Franklin and caused similar statements to be posted to Pastebin.com.

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

This case was investigated by the Nashville Field Office of the U.S. Secret Service with assistance from the Nashville Resident Agency of the FBI.  The case is being prosecuted Senior Counsel Anthony V. Teelucksingh of the Criminal Division's Computer Crime and Intellectual Property Section  and Assistant U.S. Attorney Byron Jones of the Middle District of Tennessee.

Attorney General Eric Holder today issued the following statement regarding the Supreme Court ruling on the Defense of Marriage Act.
 
“Today’s historic decision in the case of United States v. Windsor, declaring Section 3 of the Defense of Marriage Act unconstitutional, is an enormous triumph for equal protection under the law for all Americans.  The Court’s ruling gives real meaning to the Constitution’s promise of equal protection to all members of our society, regardless of sexual orientation.  This decision impacts a broad array of federal laws.  At the President’s direction, the Department of Justice will work expeditiously with other Executive Branch agencies to implement the Court’s decision.  Despite this momentous victory, our nation’s journey – towards equality, opportunity, and justice for everyone in this country – is far from over.  Important, life-changing work remains before us.  And, as we move forward in a manner consistent with the Court’s ruling, the Department of Justice is committed to continuing this work, and using every tool and legal authority available to us to combat discrimination and to safeguard the rights of all Americans.”

“The U.S. is disappointed and disagrees with the determination by Hong Kong authorities not to honor the U.S. request for the arrest of the fugitive, Edward J. Snowden.

“The request for the fugitive’s arrest for purposes of his extradition complied with all of the requirements of the US/Hong Kong Surrender Agreement.  At no point, in all of our discussions through Friday, did the authorities in Hong Kong raise any issues regarding the sufficiency of the U.S.'s provisional arrest request. In light of this, we find their decision to be particularly troubling.

“Throughout this event, U.S. Department of Justice authorities have been in continual contact with their Hong Kong counterparts starting on June 10, 2013 when we learned that Snowden was in Hong Kong.

“We have had repeated communications with our Hong Kong counterparts at senior levels.

“Attorney General Eric Holder placed a phone call on June 19th EDT, with his counterpart, Hong Kong Secretary for Justice Rimsky Yuen, stressing the importance of the matter and urging Hong Kong to honor our request for Snowden’s arrest.

“There have been repeated engagements by the U.S. Department of State and U.S. Consulate General in Hong Kong.

“There have been repeated engagements by the FBI with their law enforcement counterparts.

“And finally, there have been continual communications by the Criminal Division’s Office of International Affairs with counterparts at HKSAR’s Department of Justice, International Law Division and Mutual Legal Assistance Unit.”

BACKGROUND TIMELINE INFORMATION

• On June 14, 2013, the fugitive, Edward J. Snowden, was charged by complaint in the ED VA with violations of:

                o 18 U.S.C. § 793(d) (Unauthorized Disclosure of National Defense Information);                 o 18 U.S.C. § 798(a)(3) (Unauthorized Disclosure of Classified Communication
                   Intelligence); and                 o 18 U.S.C. § 641 (Theft of Government Property).

• On that same date, a warrant was issued for his arrest.

• On June 15, 2013, the United States requested pursuant to the US/HK Surrender Agreement that HKSAR authorities provisionally arrest the fugitive for purposes of extradition.

• The U.S. request complied with all aspects of the treaty in force between the United States and the HKSAR – containing all documents and information required for HKSAR to provisionally arrest Snowden.

• June 17, 2013, Hong Kong authorities acknowledged receipt of our request. Despite repeated inquiries, Hong Kong authorities did not respond with any requests for additional information or documents, stating only that the matter was “under review” and refusing to elaborate;

• On June 21, 2013, Hong Kong authorities requested additional information concerning the U.S. charges and evidence.  The U.S. had been in communication with the Hong Kong authorities about their inquiries.

• U.S. authorities were in the process of responding to the request when we learned that Hong Kong authorities had allowed the fugitive to leave Hong Kong.

• On June 23, 2013, Hong Kong authorities notified the U.S. that they had found our request insufficient and had allowed the fugitive to leave Hong Kong without acting on or request.

General Electric Aviation Systems (GEAS) has agreed to pay $6.58 million to settle allegations that it submitted false claims in connection with multiple Department of Defense contracts, the Justice Department announced today.  GEAS, headquartered in Ohio, manufactures and sells integrated systems and components for commercial, corporate, military and marine aircraft.

“This case demonstrates the Department of Justice’s commitment to ensure that our military receives quality products to perform the important mission of protecting and defending our country,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The department will aggressively pursue those who put that mission at risk.”

GEAS contracted to manufacture and deliver to the Navy external fuel tanks (EFTs) for use on the F/A-18 Hornet strike fighter jet.  GEAS manufactured the EFTs at its plant in Santa Ana, California.  In March 2008, a GEAS-manufactured EFT failed government testing, which led to a multi-year investigation by the local California offices of the Defense Contract Management Agency, the Defense Contract Audit Agency, the Defense Criminal Investigative Service and the Navy Criminal Investigative Service.  As a result of that investigation, the United States alleged that GEAS knowingly failed to comply with contract specifications and failed to undertake proper quality control procedures in connection with 641 EFTs it delivered to the Navy between June 2005 and February 2008.

In addition, the settlement resolves allegations that, between June 2010 and June 2011, GEAS knew that it falsely represented to another government contractor that GEAS had performed a complete inspection of 228 drag beams to be used on Army UH-60 Blackhawk helicopters, and that those 228 drag beams conformed to all contract specifications. 

  “Defense contractors agree to provide the government with a quality product, and in doing so, they promise to follow strict manufacturing and testing protocols to ensure that our military receives only the best equipment,” said André Birotte Jr., U.S. Attorney for the Central District of California.  “In this case, some of the hardware sold to the government did not meet quality-control standards, and that failure could have put our service members at risk.  This multimillion dollar settlement is designed to ensure that General Electric Aviation Systems does not engage in this type of misconduct in the future, and this case should serve as a warning to any government contractor who thinks it can cut corners.”

Carter Stewart, U.S. Attorney for the Southern District of Ohio, added, “We are determined to protect the integrity of the system that provides goods and services to the men and women who serve in the armed forces.  The False Claims Act is an effective and powerful tool to help us carry out our mission.”

Allegations about GEAS’s misconduct at the Santa Ana facility were included in a lawsuit filed by former GEAS Santa Ana employee Jeffrey Adler under the qui tam or whistleblower provisions of the False Claims Act, which permit private individuals called “relators” to bring lawsuits for false claims on behalf of the United States, and to receive a portion of the proceeds of any settlement or judgment.  Mr. Adler’s share of the settlement has not yet been determined.

This settlement was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Central District of California; the U.S. Attorney’s Office for the Southern District of Ohio; the Defense Contract Management Agency; the Defense Contract Audit Agency; the Defense Criminal Investigative Service; and the Navy Criminal Investigative Service in investigating and resolving the allegations.

The qui tam lawsuit, filed in the U.S. District Court for the Southern District of Ohio, is captioned United States ex rel. Adler v. General Electric Aviation Services (1-CV-00313).  The claims resolved by the settlement are allegations only and do not constitute a determination of liability.

Kenny McLaughlin, 35, a corrections officer at the Stone County Regional Correctional Facility in Stone County, Miss., was sentenced today to serve one year in federal prison and ordered to pay restitution of $6,000 for ordering the beating of an inmate at the detention facility in violation of federal civil rights laws.  

McLaughlin pleaded guilty on Mar. 29, 2013 to willfully violating the civil rights of persons in his custody. According to court documents filed in connection with his guilty plea, on May 12, 2008, McLaughlin, while working as a corrections officer, ordered an inmate to arrange an unwarranted assault on another inmate.  As a result of McLaughlin’s order, the victim was assaulted by two fellow inmates in a shower area. McLaughlin was aware of the assault as it happened but did not notify any other officer or medical personnel of the assault. The victim suffered cuts to his face, bruises to his chest and fractured ribs.

“This sentence demonstrates that assaults on inmates whether by corrections officers personally or orchestrated by corrections officers undermine the rule of law and will not be tolerated,” said Deputy Assistant Attorney General Roy L. Austin Jr. of the Department of Justice’s Civil Rights Division.  “The Justice Department is committed to prosecuting law enforcement officers who violate the constitutional rights of individuals in their custody.”

“Every citizen has the right to expect law enforcement officers to act legally and in accordance with the United States Constitution.  Former Corrections Officer McLaughlin’s actions were inexcusable and should serve as a reminder that no one is above the law,” said U. S. Attorney for the Southern District of Mississippi Gregory K. Davis.

This case was investigated by the Gulfport Resident Agency of the Jackson Division of the FBI and is being prosecuted by Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi and Trial Attorney Dana Mulhauser of the Civil Rights Division of the Department of Justice

The Justice Department announced that yesterday a federal jury convicted Michael Smith, 38, a former corrections officer of the Alabama Department of Corrections, of two civil rights violations and five obstruction of justice-related violations in connection with the beating death of former inmate Rocrast Mack. 

 
The incident occurred at Ventress Correctional Facility in Clayton, Ala., on Aug.4, 2010, and at the time of the incident, Smith was a lieutenant with supervisory authority over other officers on his shift.  The jury convicted Smith of assaulting Mack with a baton in an office in the prison and of assaulting Mack again several minutes later in the medical unit by repeatedly stomping on Mack’s head.  Mack died the following day in a Montgomery, Ala., hospital.    

 
Scottie Glenn, another former corrections officer at Ventress, pleaded guilty on Nov.18, 2011, in U.S. District Court for the Middle District of Alabama to one count of violating the civil rights of Mack for his role in the incident and to one count of conspiring with other corrections officers to cover up the beatings.  Matthew Davidson, another former corrections officer, pleaded guilty on Jan. 15, 2013, to two civil rights violations and one count of conspiring with other officers to cover up the beatings. 

 
Smith was remanded to the custody of the U.S. Marshals Service pending sentencing.  The sentencing hearing is yet to be scheduled.  Smith faces a maximum potential penalty of life in prison. 

 
"The jury found that defendant Smith, a high ranking official at Ventress Prison, violently caused the death of an inmate entrusted to his care,” said Deputy Assistant Attorney General for the Civil Rights Division Roy L. Austin Jr. “Through its verdict, the jury has vindicated the principle, enforced by the Department of Justice, that no person is above the law.  We hope that today’s verdict brings some measure of solace to the family of Rocrast Mack.”

 
This case was investigated by the Mobile, Ala., Division of the FBI, in partnership with the Alabama Bureau of Investigation, and was prosecuted by Trial Attorney Patricia Sumner of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Jerusha Adams of the U.S. Attorney’s Office for the Middle District of Alabama.

A former executive of Lender Processing Services Inc. (LPS) – a publicly traded company based in Jacksonville, Fla. – was sentenced today to serve five years in prison for her participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Middle District of Florida Robert E. O’Neill and Special Agent in Charge Michelle S. Klimtof the FBI Jacksonville Division.

 
Lorraine Brown, 56, of Alpharetta, Ga., was sentenced by Senior U.S. District Judge Henry Lee Adams Jr. in the Middle District of Florida. In addition to her prison term, Brown was sentenced to serve two years of supervised release and ordered to pay a fine of $15,000.On Nov. 20, 2012, Brown pleaded guilty to conspiracy to commit mail and wire fraud.

“Lorraine Brown will spend five years in prison for her central role in a scheme to fraudulently execute thousands of mortgage-related documents while our nation’s housing market was at its most vulnerable point in generations,” said Acting Assistant Attorney General Raman.  “The documents that were fraudulently produced under Brown’s direction were relied upon in court proceedings, including a significant number of foreclosure and bankruptcy matters. Today’s sentencing represents appropriate punishment for someone who sought to capitalize on the nation’s housing crisis.”

“Floridians were hard hit by the downturn in the real estate market,” said U.S. Attorney O’Neill.  “We will continue to pursue individuals like Brown who took advantage of consumers for personal gain and contributed to the financial crisis.  Prosecuting financial crimes remains a priority for our office.”

“The investigation of sophisticated mortgage and corporate fraud schemes continues to be a priority for the Federal Bureau of Investigation as such criminal activities have a significant economic impact on our community,” said Special Agent in Charge Klimt.

 
Brown was an executive at LPS and the chief executive of DocX LLC, which was a wholly-owned subsidiary of LPS, until it was closed down in early 2010. DocX’s main clients were residential mortgage servicers, which typically undertake certain actions for the owners of mortgage-backed promissory notes. Servicers hired DocX to, among other things, assist in creating and executing mortgage-related documents filed with recorders’ offices.

 
According to Brown’s plea agreement, employees of DocX, at the direction of Brown and others, began forging and falsifying signatures of authorized personnel on the mortgage-related documents that they had been hired to prepare and file with property recorders’ offices. Only specific personnel at DocX were authorized by clients to sign the documents, but the documents were fraudulently notarized as if actually executed by authorized DocX employees.

 
According to plea documents, Brown implemented these signing practices at DocX to enable DocX and Brown to generate greater profit. Specifically, DocX was able to create, execute and file larger volumes of documents using these signing and notarization practices. To further increase profits, DocX also hired temporary workers to act as authorized signers. These temporary employees worked for much lower costs and without the quality control represented by Brown to DocX’s clients. Some of these temporary workers were able to sign thousands of mortgage-related instruments a day. Between 2003 and 2009, DocX generated approximately $60 million in gross revenue.

After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country. Many of these documents were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions. Brown admitted she understood that property recorders, courts, title insurers and homeowners relied upon the documents as genuine.

This case is being prosecuted by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida. This case was investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.

This case 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. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed 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

A federal grand jury in Scranton, Penn., returned an indictment today charging Jessie Con-Ui, a federal inmate, with the murder of federal corrections officer Eric Williams, the Justice Department announced.

Con-Ui, 36, was charged in U.S. District Court for the Middle District of Pennsylvania with one count of first degree murder, one count of first degree murder of a U.S. corrections officer and one count of possessing contraband in prison.

The indictment alleges that Con-Ui killed Williams on Feb. 25, 2013, in a premeditated attack at the Canaan Federal Correction Complex in Waymart, Penn.  According to the indictment, Con-Ui stabbed Williams with a sharpened weapon and struck him repeatedly.

If convicted, Con-Ui faces a maximum penalty of death or life in prison.

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

The charges against Con-Ui resulted from an investigation by the FBI, with assistance from the Federal Bureau of Prisons.  The case is being prosecuted by the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Middle District of Pennsylvania.

The Department of Justice today restrained the 1909 Pablo Picasso painting “Compotier et tasse” – estimated to be worth $11.5 million – on behalf of the Italian government, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Preet Bharara of the Southern District of New York; and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.

The restraining order was obtained in response to an official request by the government of Italy, pursuant to the treaty between the United States of America and the Italian Republic on Mutual Legal Assistance in Criminal Matters for assistance in connection with its ongoing criminal investigation and prosecution of Gabriella Amati.  Amati and her late husband, Angelo Maj, were charged by the Italian Public Prosecutors’ Office in Milan with embezzlement and fraudulent bankruptcy offenses under Italian law, and Italian prosecutors have obtained a restraining order for the Picasso painting in connection with the criminal proceeding. 

According to documents filed in the Italian criminal proceeding, Amati and Maj, in collaboration with a public official of the city of Naples, Italy, employed various schemes to misappropriate tax receipts collected for Naples by companies the couple controlled.  In addition, the Italian prosecutors alleged that Amati and Maj orchestrated a number of schemes to embezzle Naples’ tax revenue, including the use of fraudulent service contracts, forged accounting records, inflated operational expenses and fraudulently claimed refunds to Naples taxpayers, all to justify transfers to the couple’s own bank accounts of the taxes that were collected for the city, resulting in a loss of approximately 33 million Euros ($44 million) to Naples. 

On May 21, 2013, ICE Homeland Security Investigations (HSI) special agents in New York located and recovered the painting, which was being offered for private sale in the amount of $11.5 million.

An application to enforce the Italian restraining order was filed on June 21, 2013, in the U.S. District Court for the Southern District of New York, seeking to restrain the Picasso painting belonging to Amati and Maj and located in New York City.  U.S. District Judge Victor Marrero granted the U.S. government’s application and issued a restraining order prohibiting the removal, sale or disposition of the Picasso painting from the court’s jurisdiction.  The United States is working in close cooperation with the Italian Public Prosecutors’ Office in Milan and the Justice Department’s Attaché in Rome to forfeit the painting in an effort to repatriate the Picasso to Italy.

“Restraining this Picasso painting is yet another example of the Justice Department’s close partnership with law enforcement around the world,” said Acting Assistant Attorney General Raman.  “Our asset forfeiture section is committed to finding and securing every last penny of criminal proceeds and putting those ill-gotten proceeds back in the hands of victims, regardless of where they reside.”“We are pleased to have played a role in securing this valuable work of art by the celebrated artist, Pablo Picasso, on behalf of the Italian government,” said U.S. Attorney Bharara.  “Our commitment to ‘taking the profit out of crime’ transcends national boundaries and is the operating principle of our asset forfeiture program.”

“Restraining this valuable artwork is an effort to help recover some of the estimated $44 million that this couple stole from the tax-paying citizens of Naples,” said Director Morton. “We are very pleased that our investigation has led to the recovery of this painting that is so significant to the Italian people. This is an example of the fine work of our HSI cultural repatriation special agents. We will continue our efforts to return stolen antiquities to their rightful owners.”

The U.S. enforcement of the Italian order is being handled by Assistant Deputy Chief Jack de Kluiver and Trial Attorney Jennifer Wallis of Criminal Division’s Asset Forfeiture and Money Laundering Section and Asset Forfeiture Unit Chief Sharon Cohen Levin and Assistant U.S.  Attorney Christine Magdo of the U.S. Attorney’s Office for the Southern District of New York, ICE HSI New York and Rome, and the Criminal Division’s Office of International Affairs.  In Italy, the case is being handled by the Italian Public Prosecutor’s Office in Milan, and investigated by the Guardia di Finanza police service.

Attorney General Eric Holder today issued the following statement regarding the Supreme Court’s decision in Fisher v. University of Texas.

 “I am pleased that the Supreme Court has followed longstanding precedent that recognizes the compelling governmental interest in ensuring diversity in higher education.  The educational benefits of diversity are critically important to the future of this nation.  As the Court has repeatedly recognized, diverse student enrollment promotes understanding, helps to break down racial stereotypes, enables students to better understand people of different races, and prepares all students to succeed in, and eventually lead, an increasingly diverse workforce and society.  Business leaders have long emphasized the importance of a qualified, diverse workforce to their success in a global economy.  And the federal government, in particular, has a vital interest in drawing its personnel, including its military leaders, from a well-qualified and diverse pool of university graduates of all backgrounds who have the perspective and understanding necessary to govern and defend this great country.

“The University of Texas’s implementation of its admissions program will now be reevaluated by the lower courts.  The Department is committed to working with colleges and universities around the country to find ways to promote educational diversity that are consistent with the law.”

The Justice Department announced today that it has reached an agreement with Hanover County, Va., that will allow for the county, a covered jurisdiction under the special provisions of the Voting Rights Act, to bail out from coverage under these provisions.   Bailout will exempt Hanover County, along with the town of Ashland, from the preclearance requirements of Section 5 of the Voting Rights Act.  The agreement is in the form of a consent decree filed today in the U.S. District Court for the District of Columbia and must be approved by the court.

Under Section 5 of the Voting Rights Act, certain covered jurisdictions, determined according to Section 4 of the Act, are required to seek preclearance for any changes in voting qualifications, standards, practices or procedures from the U.S. District Court for the District of Columbia or from the U.S. Attorney General, prior to their implementation.  Section 4 of the act provides that a covered jurisdiction may seek to “bail out,” or remove itself from such coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in the U.S. District Court for the District of Columbia.  A bailout judgment can be issued only if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions.  The act also provides that the Attorney General can consent to entry of a judgment of bailout only if, based upon investigation, the Attorney General is satisfied that the jurisdiction meets the eligibility requirements. 

            Hanover County filed its bailout action in the U.S. District Court for the District of Columbia on May 2, 2013.  Counsel for the county contacted the Attorney General prior to filing the action, indicating that the county was interested in seeking bailout.  The county provided the Justice Department with substantial information, and the department conducted an investigation to determine the county’s eligibility.  Based on that investigation, the department is satisfied that Hanover County meets the Voting Rights Act’s requirements for bailout.

“In the department’s view, the county has met the requirements necessary for bailout.  We reached this conclusion after thoroughly reviewing information provided by the county as well as information gathered during the Department’s independent investigation,” said Matthew Colangelo, Deputy Assistant Attorney General for the Civil Rights Division.  “We appreciate the county’s cooperation in the resolution of this matter.”

The consent decree details the legal and factual basis for a bailout determination and, if approved by the court, the county’s request will be granted.  The court will retain jurisdiction of the action for 10 years and can reopen the action upon the motion of the Attorney General or any aggrieved person alleging conduct by the county that would have originally precluded the county from bailing out if it had occurred during the 10-year period preceding entry of the consent decree.

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

As we stated yesterday, the United States had contacted authorities in Hong Kong to seek the extradition of Mr. Snowden, based on the criminal complaint filed in the Eastern District of Virginia, and in accordance with the US-Hong Kong Agreement for the Surrender of Fugitive Offenders. We have been informed by the Hong Kong authorities Mr. Snowden has departed Hong Kong for a third country. We will continue to discuss this matter with Hong Kong and pursue relevant law enforcement cooperation with other countries where Mr. Snowden may be attempting to travel.

U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands, was invited by the Guam Interfaith Committee to be the keynote speaker at the annual National Day of Prayer Luncheon held on May 16, 2012 at the Aurora Hotel. 

The Guam Interfaith Committee is composed of representatives of seven faith traditions currently present on Guam.  These faiths are:  Hindu, Judaism, Buddhism, Christianity, Muslim, Baha’i plus Chamorro Spiritual Tradition.  The members came together immediately after 9/11 to counter any hate acts by misguided individuals.  The Guam Interfaith Committee members work closely with one another to promote mutual understanding, respect, tolerance, and compassion between their faiths.  The Committee sponsors an annual Interfaith Thanksgiving Service which began since 9/11 with over 200 in attendance and has conducted the service every year since 9/11.  They also commenced the National Day of Prayer Luncheon six years ago which is now an annual event.

United States Attorney Limtiaco spoke about the Diverse Communities Outreach group she started in early March 2011.  This group consists of faith-based community leaders and consuls general.  The purpose of the meetings is to provide a forum to discuss crime prevention, civil rights and immigration issues, and to strengthen the relationship between law enforcement and our community.

U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands, announced that her office joined the thousands that flocked to the annual Relay for Life Event held at the George Washington Senior High School track to celebrate cancer Survivors, remember loved ones lost to cancer and to join with the many teams on Guam  that participate in the fight against cancer.

Team FEDS, “Friends Engaging in Dynamic Service,” is comprised of co-workers and friends from various federal law enforcement agencies.  Team FEDS joined the fight against cancer in 2003 by forming the team, when one of their co-workers was stricken by cancer.  The team strives to raise $10K every year through fundraisers such as their annual Chili Cook-off and other creative fundraisers.  Their biggest achievement was in 2008 when they raised $14K.   This year, Team FEDS, with only 17 online team members, four being Survivors, but with many supporters, raised $11,000.  Team FEDS Relay in support of cancer research and clinical studies -- they Relay because they are FED UP with CANCER!

Attached is a photo of the team taken the night of Relay.  Guam’s Relay for Life annual event is the largest American Cancer Society event on Guam.  There were 83 teams registered for this year’s Relay resulting in raising the amount of $475,577.00.

U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands, was invited to attend the Guam Federation of Asian and Pacific People of Guam luncheon on May 20, 2012, in celebration of Asian American Pacific Island Heritage Month.

According to their booklet, the Guam Federation of Asian and Pacific People of Guam was organized in 1993 with membership composing of the Filipino Community of Guam, Korean Association of Guam, Vietnamese Association of Guam, Indian Community of Guam, the Chinese-Vietnamese Friendship of Guam and the Chinese Community.  Since then, other associations have been added, namely, the Federation of Chinese Overseas, Palau Community of Guam, Asahi Club of Guam, Peleliu Club of Guam, The FSM Association of Guam, and the Chuukese Association of USA.  Their objective is to promote friendship and camaradie among themselves, with the people of Guam, and with the people of the neighboring island countries.

Attached is a photo that was taken of the membership at the lunch, most of them depicting their country’s traditional clothing.

Attorney General Eric Holder today issued the following statement regarding President Obama’s nomination of Jim Comey to be Director of the FBI:

“As an extraordinarily dedicated public servant, a talented national security and law enforcement executive, and a principled leader with extensive experience in government and the private sector, Jim Comey is uniquely qualified to serve as the next Director of the Federal Bureau of Investigation.

“I’ve known Jim for almost 20 years, and have always found him to be a person willing to try new methods and innovative tools – while adhering to our most treasured values – in keeping the American people safe.  He is a seasoned prosecutor – and former United States Attorney – whose impeccable judgment has set him apart from his peers.  He is a proven leader – and former Deputy Attorney General – whose formidable intellect, indisputable integrity, and unwavering dedication to the rule of law will undoubtedly serve him well as FBI Director.

"Above all, Jim is, and has always been, a faithful servant of the American people.  I am confident that he will be a superb FBI Director, providing the strong and steady leadership that the Bureau’s extraordinary men and women deserve.  I applaud the President’s decision to nominate Jim Comey and I look forward to working closely with him, upon his confirmation, to continue protecting the American people from financial fraud, violent crime and terrorism.”

The Justice Department today announced that a scientist and his wife, who both previously worked as contractors at the Los Alamos National Laboratory (LANL) in New Mexico, have pleaded guilty to charges under the Atomic Energy Act and other charges relating to their communication of classified nuclear weapons data to a person they believed to be a Venezuelan government official.

The guilty pleas, which were entered today by Pedro Leonardo Mascheroni, 77, a naturalized U.S. citizen from Argentina, and Marjorie Roxby Mascheroni, 70, a U.S. citizen, in the U.S. District Court for the District of New Mexico, were announced by John Carlin, Acting Assistant Attorney General for National Security; Kenneth J. Gonzales, U.S. Attorney for the District of New Mexico and Carol K.O. Lee, Special Agent in Charge of the FBI’s Albuquerque Division.

According to court filings, Mascheroni, a Ph.D. physicist, worked as a scientist at LANL from 1979 to 1988 and held a security clearance that allowed him access to certain classified information, including “Restricted Data.”  Roxby Mascheroni worked at LANL between 1981 and 2010, where her duties included technical writing and editing.  She also held a security clearance at LANL that allowed her access to certain classified information, including “Restricted Data.”  As defined under the Atomic Energy Act, “Restricted Data” is classified information concerning the design, manufacture or use of atomic weapons; the production of special nuclear material; or the use of special nuclear material in the production of energy.

Mascheroni and Roxby Mascheroni were indicted in Sept. 2010, and charged with conspiracy to communicate and communicating Restricted Data to an individual with the intent to secure to an advantage to a foreign nation.  The indictment also charged the couple with conspiracy to convey and conveying classified Restricted Data.  The indictment also charged Mascheroni with concealing and retaining U.S. records with the intent to convert them to his own use and gain, and both defendants with making false statements. 

Today, Mascheroni pleaded guilty to Counts 7 and 8 of the indictment, charging him with conversion of government property, and Counts 10 through 15, charging him with making false statements.  Mascheroni also pleaded guilty to an information charging him with two counts of communication of Restricted Data and one count of retention of national defense information.  Mascheroni admitted that in Nov. 2008 and July 2009, he unlawfully communicated Restricted Data to another individual with reason to believe that the data would be utilized to secure an advantage to Venezuela.  He also admitted unlawfully converting Department of Energy information to his own use and selling the information in Nov. 2008 and July 2009, and failing to deliver classified information relating to the United States’ national defense to appropriate authorities and instead unlawfully retaining the information in his home.  Finally, Mascheroni admitted making materially false statements to the FBI when he was interviewed in Oct. 2009. 

Roxby Mascheroni pleaded guilty to Count 6 of the indictment, charging her with conspiracy, and Counts 16 through 22, charging her with making false statements.  She also pleaded guilty to an information charging her with conspiracy to communicate Restricted Data.  In entering her guilty plea, Roxby Mascheroni admitted that between Oct. 2007 and Oct. 2009, she conspired with Mascheroni to convey Restricted Data belonging to the United States to another person with reason to believe that the information would be used to secure an advantage to Venezuela. She also admitted making materially false statements to the FBI when she was interviewed in Oct. 2009.
 
Under the terms of the plea agreements, which are subject to court approval, Mascheroni will be sentenced to a prison term within the range of 24 to 66 months followed by ten years of supervised release, and Roxby Mascheroni will be sentenced to a prison term of 12 to 24 months followed by nine years of supervised release.  The couple’s sentencing hearings have yet to be scheduled.

The indictment in this case did not allege that the government of Venezuela or anyone acting on its behalf sought or was passed any classified information, nor did it charge any Venezuelan government officials or anyone acting on their behalf with wrongdoing.  The indictment also did not allege any wrongdoing by other individuals working at LANL.

 This investigation was conducted by the FBI’s Albuquerque Division with assistance from the Department of Energy and LANL.  The prosecution is being handled by Assistant U.S. Attorneys Fred J. Federici, Dean Tuckman and Holland S. Kastrin of the U.S. Attorney’s Office for the District of New Mexico, and Trial Attorneys Kathleen Kedian and David Recker of the Counterespionage Section of the Justice Department’s National Security Division.