District Not Recorded

The former chief executive officer of a Virginia-based security contracting firm was sentenced in the Eastern District of Virginia to 72 months in prison for creating a front company to obtain more than $31 million intended for disadvantaged small businesses and for bribing the former regional director for the National Capital Region of the Federal Protective Service (FPS) as part of the scheme. The front company obtained the contracts 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 sentencing by United States District Judge Gerald Bruce Lee.

“Keith Hedman used his expertise gleaned from decades as a government contractor to cheat the system and steal tens of millions from minority-owned small business owners,” said Acting Assistant Attorney General Raman. “Today’s sentence shows that those who resort to deceit and bribery to secure federal contracts will be caught and held accountable.”

“Keith Hedman tried to game the system and take advantage of a government program designed to help minority-owned small businesses,” said U.S. Attorney Neil H. MacBride.  “He committed fraud, he undermined the trust of the U.S. government and this type of conduct will not be tolerated.  My office is committed to prosecuting those who cheat the government to the fullest extent of the law.”
 
 “I commend the outstanding efforts of our agents and the other law enforcement agencies involved in this case in protecting the integrity of the Federal Government’s procurement program and taxpayer dollars” said NASA Inspector General Paul K. Martin.

 Keith Hedman, 53, of Arlington, Va., was sentenced today after pleading guilty to major government fraud and conspiracy to commit bribery on March 13, 2013. Hedman was also ordered to forfeit approximately $6.1 million.

According to court documents, in or about 2011 Hedman 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 an employee, Dawn Hamilton, 48, of Brownsville, Md., 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, allocation of personnel, and government contracting activities.  Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of signatures of Hamilton to documents she had not seen or drafted. 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. 

Later in 2011, Hedman agreed to pay Derek Matthews, 47, of Harwood, Md., the former FPS Regional Director for the National Capital Region, $50,000 and a percentage of new business in exchange for Matthews helping Company B obtain contracts.  During the bribery scheme, Matthews served as FPS Deputy Assistant Director for Operations, a law enforcement position in which he had daily oversight of physical security programs and oversight of approximately 13,000 FPS officers at approximately 9,000 federal buildings.

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 (OIG), 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.

Former Enron Chief Executive Officer Jeffrey K. Skilling has been resentenced to 168 months in prison on conspiracy, securities fraud, and other charges related to the collapse of Enron Corporation. In addition to the prison sentence, Skilling, 59, was ordered to forfeit approximately $42 million to be applied toward restitution for the victims of the fraud at Enron.

Acting Assistant Attorney General Mythili Raman of the Criminal Division made the announcement after Skilling was resentenced before U.S. District Judge Sim Lake at the U.S. District Court in Houston. 

“The sentence handed down today ends years of litigation, imposes significant punishment upon the defendant and precludes him from ever challenging his conviction or sentence,” said Acting Assistant Attorney General Raman. “With today’s court action, victims of Skilling’s crimes will finally receive more than $40 million that he owes them.  We appreciate the hard work and dedication of all the prosecutors and agents who have handled this important case from the initial investigation to today’s successful conclusion.”

A federal jury found Skilling guilty in Houston on May 25, 2006, of one count of conspiracy, 12 counts of securities fraud, one count of insider trading, and five counts of making false statements to auditors.  Judge Lake initially sentenced Skilling to serve 292 months of imprisonment on Oct. 23, 2006.  On Jan. 6, 2009, the United States Court of Appeals for the Fifth Circuit affirmed Skilling’s convictions but vacated his sentence and remanded for a new sentencing hearing.  The court of appeals concluded that the district court erred by increasing Skilling’s sentence for having substantially jeopardized the safety and soundness of a financial institution – that is, Enron’s pension plan.  As a result, the court of appeals effectively reduced Skilling’s guidelines range of imprisonment by approximately nine years. 

In May 2013, the government and Skilling entered into an agreement to recommend jointly to the district court a sentence between 168 months and 210 months of imprisonment, a limited reduction in Skilling’s guidelines range of imprisonment in exchange for Skilling agreeing, among other things, not to contest the original forfeiture and restitution order and to waive all appeals and other litigation.  As court documents make clear, the government entered into this agreement, in part, to bring finality to Skilling’s convictions and thereby allow the government to promptly seek the distribution of approximately $42 million to victims of Skilling’s crimes. 

Skilling’s convictions stemmed from a scheme to deceive the investing public, the U.S. Securities and Exchange Commission, and others about the true performance of Enron’s businesses. The scheme was designed to make it appear that Enron was growing at a healthy and predictable rate, consistent with analysts’ published expectations, that Enron did not have significant write-offs or debt and was worthy of an investment-grade credit rating, that Enron was comprised of a number of successful business units, and that the company had an appropriate cash flow. This scheme had the effect of artificially inflating Enron’s stock price, which increased from approximately $30 per share in early 1998 to over $80 per share in January 2001, and artificially stemming the decline of the stock during the first three quarters of 2001.

The fraud scheme eventually unraveled and Enron filed for bankruptcy in December 2001, making its stock virtually worthless.

The investigation into Enron’s collapse was conducted by the Enron Task Force, a team of federal prosecutors supervised by the Justice Department’s Criminal Division, and Special Agents from the FBI and IRS Criminal Investigation. The Task Force received considerable assistance from the Securities and Exchange Commission. The resentencing hearing was handled by Patrick Stokes, Albert Stieglitz and Robert Heberle of the Criminal Division’s Fraud Section. 
 

Scottie Alice Johnson of Montgomery County, Ala., pleaded guilty to one count of conspiracy to defraud the United States for her role in a Stolen Identity Refund Fraud (SIRF) scheme, the Justice Department and the Internal Revenue Service (IRS) announced today. 

According to court documents, Johnson conspired with Barbara Murry, Veronica Temple and Yolanda Moses to receive fraudulently obtained tax refunds.  Yolanda Moses created a tax-preparation business called B & B Tax Service, which was located in the same building as co-defendant Barbara Murry’s hair weaving shop, called B & B Weaving. The conspirators obtained stolen identities from multiple sources and recruited individuals, including Scottie Alice Johnson, to deposit fraudulently obtained tax refunds into their respective bank accounts. Yolanda Moses and Veronica Temple filed false tax returns using the stolen identities and directed the refunds into bank accounts they or their co-conspirators controlled.  Between January 2006 and April 2012, Barbara Murry, Veronica Temple and Yolanda Moses filed over 900 false tax returns with the IRS and fraudulently claimed in excess of $1.7 million.  Scottie Alice Johnson’s bank account received $140,505.22 in refunds proceeds.  Johnson also used her son’s bank account in the scheme to receive $22,650 in tax refunds.   
 
Sentencing has not yet been scheduled.  Johnson faces a maximum sentence of five years in prison, three years of supervised release, restitution, and a maximum fine of $250,000, or twice the loss caused by the offense. Barbara Murry, Veronica Temple and Yolanda Moses earlier pleaded guilty to various charges and each was sentenced to 57 months in prison.

Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, Tax Division Trial Attorneys Jason H. Poole and Michael Boteler and Assistant United States Attorney Todd Brown, who prosecuted the case. 

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

The U.S. District Court for the Southern District of Ohio found United Technologies Corporation liable for over $473 million in damages and penalties arising out of a contract to provide the Air Force with fighter aircraft engines for F-15 and F-16 aircraft between 1985 and 1990, the Justice Department announced today.  United Technologies, which is based in Connecticut, provides a broad range of high-technology products and services to the global aerospace and building systems industries.

“The department will relentlessly pursue justice against those who knowingly submit false claims to the government and abuse the public contracting process,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division.  “It is vital that companies who do business with the government provide full and accurate information, and if they do not, they will pay the consequences.”   

The government alleged that UTC’s proposed prices for the engine contract misrepresented how UTC calculated those prices, resulting in the government paying hundreds of millions more than it otherwise would have paid for the engines.  Specifically, the government alleged that UTC failed to include in its price proposal historical discounts that it received from suppliers, and instead knowingly used outdated information that excluded such discounts. 

The government filed suit against UTC in 1999 under the False Claims Act and the common law, and those claims were tried, without a jury, in 2004.  An initial decision by the district court in 2008 found UTC liable under the False Claims Act, but did not award any damages.  The district court also dismissed the government’s common law claims.  That decision was appealed by both the government and UTC.  In 2010, the Court of Appeals for the Sixth Circuit affirmed the district court’s finding that UTC was liable under the False Claims Act, but reversed and remanded the case to the district court to recalculate the government’s damages and to reconsider the government’s common law claims.  

In yesterday’s ruling, the district court awarded the government False Claims Act damages and penalties of $364 million, which is the highest recovery obtained by the government in a case tried under the Act.  The court also awarded an additional $109 million in damages on the government’s common law claims.  With the addition of prejudgment interest on the latter claims, which the court has yet to calculate, the government anticipates that the total judgment against United Technologies could be well in excess of half a billion dollars.   
This case is being handled by the Civil Division of the Department of Justice.  The lawsuit is captioned United States of America v. United Technologies Corp., No. 3:99-cv-093 (S.D. Ohio). 

Acting Assistant Attorney General Stuart F. Delery announced today that the Department of Justice, on behalf of the Food and Drug Administration (FDA), has filed suit in the U.S. District Court for the Western District of Louisiana against Sage Pharmaceuticals, Inc. (Sage), its president Dr. Jivn-Ren Chen, and its Director of Corporate Quality, Charles L. Thomas, all of Shreveport, Louisiana.  According to the Complaint, the defendants violated the Federal Food, Drug, and Cosmetic Act (FDCA) by manufacturing and distributing unapproved and misbranded drug products.  Under the FDCA, before a company can sell a new drug product to consumers, it must submit and receive approval of a new drug application from the FDA.  The purpose of this approval process is to ensure that drugs manufactured and distributed to consumers are safe and effective for their intended uses.  Furthermore, the FDA requires all drug labeling to have adequate directions for use. 

“Today’s action furthers the FDA’s mission of ensuring that all drugs sold to the public are safe and effective, and those companies that undermine this mission will be held accountable,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division.

U.S. Attorney for the Western District of Louisiana Stephanie A. Finley said, “This lawsuit demonstrates that this office will make every effort to protect public health by filing enforcement actions against companies that are identified as violating federal law.” 

This is the second injunctive case that the government has brought against Sage alleging the distribution of unapproved new drugs.  In 2000, the government obtained an injunction against the company banning the manufacture and distribution of two unapproved new drugs.  Since that time, FDA inspections revealed that defendants continue to manufacture and distribute other drug products—including prescription pain relievers, over-the-counter (OTC) cough and cold remedies, and OTC wound cleansers—without first obtaining the requisite FDA approvals.  As a result, the defendants’ products are unapproved new drugs and misbranded drugs under the FDCA, and potentially unsafe and ineffective. 

Despite numerous warnings from FDA, the defendants have failed to bring their operations into compliance with the law. The Justice Department will seek a permanent injunction requiring the defendants to cease all receiving, processing, manufacturing, preparing, packaging, labeling, holding, and distributing activities until they comply with applicable FDA regulations.  

 The FDA referred this matter to the Department of Justice.  The Consumer Protection Branch of the Justice Department’s Civil Division together with the U.S. Attorney’s Office for the Western District of Louisiana brought this case on behalf of the United States. 

The Department of Justice’s Antitrust Division issued the following statement today after announcing the closing of its investigation into Delta Air Lines’ proposed equity investment in Virgin Atlantic Airways Ltd. and their related trans-Atlantic joint venture:

“After a thorough investigation of the competitive effects of the proposed equity investment and joint venture, the Antitrust Division concluded that the facts and circumstances did not warrant further investigation or action. 

“In December 2012, Delta Air Lines and Virgin Atlantic reached an agreement to establish a joint venture on flights between North America and the United Kingdom.  At the same time, Delta entered an agreement to acquire the 49 percent stake in Virgin Atlantic currently held by Singapore Airlines for $360 million.  Virgin Group will retain the majority 51 percent stake.

“The proposed equity investment and joint venture also were subject to review by the European Commission.  The division and the European Commission cooperated closely throughout the course of their respective investigations, with frequent contact between the agencies.  This cooperation, facilitated by the parties, made for a more efficient review process.

“Delta and Virgin Atlantic also have filed an application with the U.S. Department of Transportation seeking antitrust immunity for their joint venture.  The division will continue to consult, as appropriate, with the Department of Transportation as it reviews the request for immunity.”

MacAndrews & Forbes Holdings Inc. will pay a $720,000 civil penalty to settle charges that the company violated premerger reporting and waiting requirements when it acquired voting securities of Scientific Games Corporation, the Department of Justice announced today.

The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against MacAndrews & Forbes for violating the notification requirements of the Hart-Scott-Rodino (HSR) Act of 1976.  At the same time, the department filed a proposed settlement that, if approved by the court, will settle the charges.

MacAndrews & Forbes is a holding company based in New York and is wholly-owned by Ronald O. Perelman.  Scientific Games is a New York-based provider of lottery and gaming services. 

According to the complaint, MacAndrews & Forbes failed to comply with the antitrust premerger notification requirements of the HSR Act before acquiring voting securities of Scientific Games in June 2012.  As a result of these acquisitions, MacAndrews & Forbes held Scientific Games voting securities in excess of $68.2 million, the HSR reporting threshold then in effect.  Although certain stock acquisitions relating to a previous HSR Act notification are exempt from additional notice and waiting requirements, MacAndrews & Forbes’ June 2012 acquisitions of Scientific Games voting securities fell outside of the five-year time period for that exemption. 

The Hart-Scott-Rodino Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements on individuals and companies over a certain size before they consummate acquisitions resulting in holding stock or assets above a certain value, which was $68.2 million in 2012 and is currently $70.9 million.

Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice.  For a party in violation of the HSR Act the maximum civil penalty is $16,000 a day. 

The United States has filed suit in the U.S. District Court for Vermont against Lawson Farm, Robert Lawson, George R. Lawson, and Lonnie A. Griffin to block them from violating the Food, Drug and Cosmetic Act (FDCA) in connection with their alleged unlawful use of new animal drugs in cows slaughtered for food.  The Justice Department filed the suit on behalf of the Food and Drug Administration (FDA).

Defendants Lawson Farm, Robert Lawson, and George R. Lawson have agreed to settle the litigation and be bound by a Consent Decree of Permanent Injunction that enjoins them from committing violations of the FDCA.  The proposed consent decree has been filed with the court and is awaiting judicial approval.  The lawsuit continues against defendant Lonnie Griffin.

“When farms fail to maintain appropriate controls concerning the medication of food-producing animals, they jeopardize the public health,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division.   “We are committed to making sure food producers have put in place the procedures and documentation necessary to help ensure that consumers receive safe foods for their family table.”

The government’s action results from a series of inspections of the Irasburg, Vermont farm, which revealed, according to the FDA, that the defendants failed to maintain complete treatment records for their animals and that they sold animals for slaughter containing excessive and illegal drug residues in its edible tissues.   The complaint also alleges that the defendants have dispensed prescription new animal drugs on more than one occasion without a lawful order from a veterinarian.

The complaint states that excess drug residues in animal tissues can harm consumers by causing allergic reactions and by contributing to the spread of antibiotic-resistant bacteria.   Both FDA and the U.S. Department of Agriculture (USDA) have warned the defendants that their conduct violates the FDCA.   Nonetheless, according to the complaint, the most recent FDA inspection, concluded in August 2012, documented the continuing nature of the defendants’ violations, and established their responsibility for illegal drug residues found in edible tissues sampled by USDA.

The government’s complaint asserts that the defendants have introduced adulterated food into interstate commerce, caused new animal drugs to become misbranded and adulterated while held for sale after shipment in interstate commerce, and failed to comply with statutory and regulatory requirements concerning the extra-label use of new animal drugs.

The FDA referred the case to the Department of Justice.  The matter was filed by the Department of Justice’s Consumer Protection Branch, the U.S. Attorney’s Office for the District of Vermont, and FDA’s Office of the General Counsel.

A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that JAMES D. ACFALLE, age 39, was sentenced today, in the District Court of Guam by Chief Judge Frances Tydingco-Gatewood, to 100 months (8 years and four months) imprisonment with credit for time served and five years supervised release upon his release from prison, for the offense of Conspiracy to Distribute Methamphetamine (Ice).

ACFALLE along with defendant Roland Nauta were charged with conspiracy to distribute methamphetamine. The ice was sent through the U.S. Postal Service.  Dogs from Guam Customs and Quarantine alerted on a package sent to Nauta through the U.S. Postal Service.  Roland Nauta, age 39, was sentenced on June 7, 2012 to 157 months (13  years and one month) imprisonment with credit for time served and five years supervised release, for the offenses of Conspiracy to Distribute Methamphetamine and Using, Carrying or Possessing a Firearm During and In Relation to a Drug Trafficking Crime.

Assistant United States Attorney Clyde Lemons prosecuted the case. The investigation was conducted by Guam Customs and Quarantine, U.S. Postal Service Inspectors, DEA, Superior Court of Guam Probation Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Department of Homeland Security, Homeland Security Investigations.

Saipan, MP – United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that on June 12, 2013, following a successful appeal by the United States, Timothy P. Villagomez, former Lieutenant Governor of the Commonwealth of the Northern Mariana Islands, was re-sentenced to a term of imprisonment of 108 months on corruption charges.  Mr. Villagomez had initially been sentenced to 87 months in prison.

The bribery and fraud charges related to the purchase by the Commonwealth Utilities Corporation of  a chemical -- at a 400% mark-up -- from companies owned by Mr. Villagomez’s sister and brother-in- law, co-defendants James and Joaquina Santos. The scheme resulted in a loss of $346,125 and extended over ten years, beginning when Mr. Villagomez was executive director of the utility, and lasting through
2007, when he was Lieutenant Governor of the CNMI, exercising de facto control over the utility. The sentence is the result of a guilty verdict returned on April 24, 2009, after a 19-day jury trial. Mr. Villagomez received an original sentence of 87 months. He unsuccessfully appealed his conviction. The United States cross-appealed, arguing that his sentencing range should be enhanced because the offense involved corruption by an elected public official or other public official in a high-level decision-making position. The Court of Appeals agreed and remanded the case to the district court for re- sentencing.  On remand the district court applied the enhancement and increased Mr. Villagomez’s sentence to 108 months.  Upon completion of his term of imprisonment, the defendant will be subject to a three-year term of supervised release.

Mr. Villagomez, along with his co-defendants, is jointly and severally liable for restitution in the amount of $346,125, which is to be paid to the Commonwealth Utilities Corporation. The case was prosecuted by Assistant U.S. Attorney Eric O’Malley and First Assistant U.S. Attorney Jeff Strand and investigated by the Federal Bureau of Investigation. The CNMI Office of the Public Auditor assisted in the investigation. Assistant U.S. Attorney Ross Naughton handled the re-sentencing.

WASHINGTON – The United States sued a Southlake, Texas woman last night, seeking to bar her from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit was filed against Karena Mondrianh in U.S. District Court for the Northern District of Texas.

The government complaint alleges that Mondrianh prepares fraudulent tax returns that understate customers' taxable income by inventing – sometimes without the customer's knowledge – false business expenses and by falsely claiming that a customer's income is exempt from tax. The suit alleges that most of Mondrianh's customers work overseas for defense contractors.

The complaint further alleges that Mondrianh has provided false information to the Internal Revenue Service (IRS) in improper attempts to delay IRS audits of customers. She allegedly urged one customer to lie to an IRS agent in order to prevent an IRS audit.

Return preparer fraud is one of the IRS's Dirty Dozen Tax Scams for 2013. In the past decade, the Justice Department's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax.

Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader

The United States sued a Southlake, Texas woman last night, seeking to bar her from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit was filed against Karena Mondrianh in U.S. District Court for the Northern District of Texas.

The government complaint alleges that Mondrianh prepares fraudulent tax returns that understate customers’ taxable income by inventing – sometimes without the customer’s knowledge – false business expenses and by falsely claiming that a customer’s income is exempt from tax. The suit alleges that most of Mondrianh’s customers work overseas for defense contractors. 

The complaint further alleges that Mondrianh has provided false information to the Internal Revenue Service (IRS) in improper attempts to delay IRS audits of customers. She allegedly urged one customer to lie to an IRS agent in order to prevent an IRS audit.

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

Ash Grove Cement Company has agreed to pay a $2.5 million penalty and invest approximately $30 million in pollution control technology at its nine Portland cement manufacturing plants to resolve alleged violations of the Clean Air Act, announced the Department of Justice and the U.S. Environmental Protection Agency (EPA).

Today’s agreement will reduce more than 17,000 tons of harmful nitrogen oxides (NOx) and sulfur dioxide (SO2) pollution each year across plants located in Foreman, Ark.; Inkom, Idaho; Chanute, Kan.; Clancy, Mont.; Louisville, Neb.; Durkee, Ore.; Leamington, Utah; Seattle, Wash.; and Midlothian, Texas.

“This significant settlement will achieve substantial reductions in air pollution from Ash Grove’s Portland cement manufacturing facilities and benefit the health of communities across the nation,” said Acting Assistant Attorney General Robert G. Dreher.  “The agreement reflects the Justice Department’s ongoing commitment to protecting public health and the environment through enforcement of the nation’s Clean Air Act.”

 “Today’s settlement will reduce air pollution that can harm human health and contribute to acid rain, haze, and smog,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “The new stringent limits on emissions will lead to less pollution and better air quality for communities across the country.”

In addition, Ash Grove has agreed to spend $750,000 to mitigate the effects of past excess emissions from several of its facilities. 

The settlement requires Ash Grove to meet stringent emission limits and install and continuously operate modern technology to reduce NOx, SO2, and particulate matter (PM). Ash Grove is required to reduce NOx emissions at nine kilns, some of which will have the lowest emission limits of any retrofit control system in the country.  In addition, modern pollution controls must be installed on every kiln to reduce PM emissions, and on several kilns to reduce SO2 emissions.

In addition, at its Texas facility, Ash Grove will shut down two older, inefficient kilns, while a third will be replaced with a cleaner, newly reconstructed kiln. 

Ash Grove will also spend $750,000 on a project to replace old diesel truck engines at its facilities in Kansas, Arkansas, and Texas, which are estimated to reduce smog-forming nitrogen oxides by approximately 27 tons per year. 

The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including portland cement manufacturing facilities. This is also the first settlement with a cement manufacturer that requires injunctive relief and emission limits for PM. SO2 and NOx, two key pollutants emitted from cement plants, can harm human health and are significant contributors to acid rain, smog, and haze. These pollutants are converted in the air into fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. 

Eight states and one local agency have joined the United States in the settlement, including: Arkansas, Idaho, Kansas, Montana, Nebraska, Oregon, Utah, Washington, and the Puget Sound Clean Air Agency.

The settlement was lodged today in the U.S. District Court for the District of Kansas and is subject to a 30-day public comment period and final court approval. It will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html.

More information about this settlement: www.epa.gov/enforcement/air/cases/ashgrove.html

More about EPA’s National Enforcement Initiatives: http://www.epa.gov/compliance/data/planning/initiatives/index.html

Cross Nicastro, Dominick Mazza, and his company, Mazza & Sons Inc., were sentenced today and yesterday in federal court in Utica, N.Y., for conspiring to violate the Clean Water Act, Superfund statute, and to defraud the United States by illegally dumping thousands of tons of asbestos-contaminated construction debris on a 28-acre piece of property on the Mohawk River in upstate New York.  In addition, the Mazza defendants were also sentenced on charges of obstructing justice and making false statements to law enforcement.

U.S. District Judge David N. Hurd sentenced Dominick Mazza to 51 months in prison to be followed by three years of supervised release, to pay a $75,000 criminal fine and $492,000 in restitution.  In addition, Judge Hurd sentenced Mazza & Sons Inc., to pay a $100,000 criminal fine and $494,000 in restitution and cleanup costs, and imposed five years corporate probation. The court also ordered that Mazza & Sons’ recycling facility fund and implement an environmental compliance plan to prevent future environmental violations at their Tinton Falls, N.J., operation.  The compliance plan is to be administered by a third party auditor.  On Tuesday, Cross Nicastro was sentenced to 33 months in prison and three years of supervised release and to pay $492,494 in restitution and a $25,000 criminal fine. 

The defendants were convicted in October 2012 after a three week trial in Utica. According to the trial evidence, the defendants conspired to fill in the entire property over the course of five years with pulverized construction and demolition debris that was processed at New Jersey solid waste management facilities (to include Mazza & Sons Inc.) and then transported to Cross Nicastro’s property in Frankfort, N.Y.  The plot was uncovered by law enforcement just months after the defendants began the operation, having already dumped at least 400 truckloads of debris at the site. Much of the material that was dumped was placed in and around waters of the United States and some of the material was found to be contaminated with asbestos.  The conspirators then concealed the illegal dumping by fabricating a New York State Department of Environmental Conservation (DEC) permit and forged the name of a DEC official on the fraudulent permit.

“Mazza and his co-conspirators are being held justly accountable for egregious environmental crimes, for putting the public’s health at risk, and for lying to federal investigators,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Had law enforcement not stopped their scheme, these conspirators could have dumped thousands of tractor trailer loads of debris in an area that contained wetlands.  These laws are intended to protect the environment and the public’s health from exposure to toxic materials, and as this case clearly demonstrates, we will vigorously prosecute those who violate them.”

“The closure of this case demonstrates that illegal dumping and fraud are serious offenses that will not be tolerated in New York State,” said New York State Department of Environmental Conservation Commissioner Joe Martens.  “DEC is proud of the collaborative work of our investigators to halt these illegal practices and bring the perpetrators to justice, and will continue to enforce state and federal laws that protect our environment and the health of New Yorkers.”

“The defendants illegally dumped thousands of tons of asbestos-contaminated construction debris in and around waterways in upstate New York,” said Cynthia Giles, Assistant Administrator of EPA’s Office of Enforcement and Compliance Assurance. “This case should serve as notice that EPA and its partner agencies will prosecute people who 'cut corners' by avoiding the costs of handling or disposing of asbestos properly.”

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

Four Harlan County, Ky., relatives were sentenced today by U.S. District Judge Gregory Van Tatenhove for their roles in kidnapping and assaulting Kevin Pennington, a gay man.  David Jason Jenkins, known as Jason, 39, received 30 years in prison, Anthony Ray Jenkins, 22, 17 years in prison, Mable Ashley Jenkins, known as Ashley, 20, 100 months in prison and Alexis LeeAnn Jenkins, 20, 8 years in prison. 
 
In October 2012, a federal jury in London, Ky., convicted Jason Jenkins and Anthony Jenkins of kidnapping and conspiracy charges related to the April 4, 2011 assault of Pennington.  The jury acquitted the men of violating the sexual orientation provision of the Matthew Shepard James Byrd Jr. Hate Crimes Prevention Act.  Testimony at trial established that the two men, who are cousins, carried out the crime with help from their relatives - Ashley Jenkins and Alexis Jenkins, who both pleaded guilty prior to trial to aiding and abetting kidnapping and aiding and abetting the hate crime assault against Pennington.  Both women testified against the defendants.  The women’s guilty pleas to federal hate crime charges constituted the first federal convictions in the nation under the sexual orientation provision of the Matthew Shepard James Byrd Jr. Hate Crimes Prevention Act.
 
The evidence at trial established that the four relatives planned in advance of the assault to kidnap Pennington, take him to a remote location and beat him to death.  After luring Pennington by false pretenses into a truck driven by Anthony Jenkins, the group drove Pennington up a deserted mountain road into Kingdom Come State Park, where they dragged Pennington into the road and beat him.  
 
The evidence also established that Pennington escaped while the two men were searching in the back of the truck for a tire iron to use to kill Pennington.  Pennington ran off the road and threw himself over a ledge, where he hid behind a rock until the group finally gave up searching for him and drove away.  Pennington staggered part-way down the mountain, where he found a ranger shack, broke a window and called 911.  
 
Ashley and Alexis Jenkins both testified that they and the men had agreed in advance to lure Pennington into the truck, drive him to a deserted area and beat him because of his sexual orientation.   The women also testified that during the beating, they all used anti-gay slurs and that the group intended to kill Pennington.

 “As the court’s sentence shows, this was a vicious criminal act.  The Department of Justice will continue to use every tool in our arsenal to vindicate the rights of victims of violent crimes,” said Roy L. Austin Jr., Deputy Assistant Attorney General, Civil Rights Division.  “The Department will also continue to use the Shepard Byrd Act to vigorously investigate hate crimes allegations and work with our state and local law enforcement partners in their efforts to identify these crimes.”

“Justice imposes a heavy price on those who engage in the sort of gratuitous violence that led to this prosecution,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky.  “The defendants’ crimes were brutal and cruel.  They fully deserve the sentences delivered by the Court. The message is clear-our society will not tolerate such horrific conduct. The team of dedicated professionals who investigated and successfully prosecuted this case are to be congratulated for their fine work. We also thank our state and local partners who played an important role in achieving a just result in this matter.”

“We are pleased that this matter has been successfully resolved and that justice has been done,” said Perrye K. Turner, Special Agent in Charge of the FBI in Kentucky.  “We feel the length of the sentences sufficiently reflects the seriousness of these violent acts”

This case was investigated by Special Agents Anthony Sankey and Mike Brown with the FBI and was prosecuted by Assistant U.S. Attorney Hydee Hawkins from the U.S. Attorney’s Office for the Eastern District of Kentucky and Trial Attorney Angie Cha from the Civil Rights Division.

A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Felony charges were filed today in the U.S. District Court for the Northern District of California in San Francisco against Robert Williams of Atherton, Calif. Williams is the 31st individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

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

The department said Williams conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in San Mateo County beginning as early as October 2009 and continuing until about December 2010.

“Collusion at these foreclosure auctions enabled the conspirators to present the illusion of competition, when they were actually thwarting the competitive process and profiting at the expense of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division remains committed to holding accountable those who illegally subvert competition at real estate foreclosure auctions across the country.”

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 San Mateo 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.

“The legitimacy of an open, public real estate foreclosure auction is compromised when an individual or group conspires to commit criminal activity which impacts genuine intentions of good citizens,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “We are steadfast in our continued partnership with the Antitrust Division in bringing those criminally responsible to justice.”

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

The charges today are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, 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 Field 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.**

WASHINGTON - A Serbian man wanted for being the alleged getaway driver in a murder and attempted murder investigation was deported from the United States Monday. He was escorted to Belgrade, Serbia, after leaving Washington Dulles Airport, by officers with U.S. Immigration and Customs Enforcement's (ICE) Enforcement and Removal Operations (ERO), Washington Field Office.

Milos Mihajlovic, 29, a native of Serbia, entered the United States in May 2008, as a nonimmigrant visitor. On June 20, 2011, INTERPOL issued a red notice for Mihajlovic for attempted aggravated murder and unlawful possession of arms and explosives due to his involvement in an April 2008 shooting which left one person dead and two others injured in Nis, Serbia. Four days later, following an encounter in northern Virginia with a Fairfax Police Department officer, he was turned over to ICE's Homeland Security Investigations (HSI) Washington.

Mihajlovic was ordered removed by an immigration judge in November 2011. He appealed the decision to the Board of Immigration Appeals, who remanded the case back to the judge for additional evidence and testimony. The judge again ordered him removed March 4.

“Individuals like Mihajlovic, who come to the United States to find safe haven from crimes they committed in their native country, are not welcome here and will be removed,” said M. Yvonne Evans, field office director for ERO Washington.

This investigation and removal was coordinated with HSI Attaché Vienna, HSI Attaché Paris, the Regional Security Office Belgrade, INTERPOL Washington and INTERPOL Belgrade.

Since Oct. 1, 2009, ERO has removed more than 646 foreign fugitives from the United States who were being sought in their native countries for serious crimes, including kidnapping, rape and murder. ERO works with HSI's Office of International Affairs, foreign consular offices in the United States, and INTERPOL to identify foreign fugitives illegally present in the country.

A federal court in Orlando, Fla., permanently barred Carlos A. Cabrera from preparing federal tax returns for others, the Justice Department announced today. The permanent injunction order was signed by Judge Charlene E. Honeywell of the U.S. District Court for the Middle District of Florida. Cabrera, whose business was in Kissimmee, Fla., consented to the permanent injunction order without admitting the allegations against him.
           
The government complaint in the civil injunction action alleged that Cabrera and his business—Cabrera Financial Group—prepared federal income tax returns for customers that claimed improper losses for non-existent businesses and fabricated education credits in order to unlawfully understate customers’ tax liabilities. According to the complaint, Cabrera prepared over 17,000 tax returns for 2009 and 2010, with an average tax understatement of $4,222 per return for returns the Internal Revenue Service examined. The government suit alleged that the total losses to the Treasury Department from Cabrera’s misconduct could be tens of millions of dollars for those two years alone.

This lawsuit is part of the Justice Department’s nationwide crackdown on tax scams, including the preparation of fraudulent federal tax returns. Over the last decade, the department has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns.  More information about these cases and the Tax Division can be found on the department’s web site www.justice.gov/tax.

Related Materials:

United States v. Carlos A. Cabrera
Consent Final Judgment of Permanent Injunction (PDF)

The owner and operator of a Louisiana-based durable medical equipment (DME) company was sentenced today to serve 97 months in prison for his role in a $6.7 million Medicare fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; and Special Agent in Charge Mike Fields of the Dallas Regional Office of the U.S. Department of Health and Human Service’s Office of the Inspector General (HHS-OIG).

Kenny Msiakii, 45, of Houston, was sentenced by U.S. District Judge Nancy Atlas in the Southern District of Texas.  In addition to his prison term, Msiakii was sentenced to serve three years of supervised release and ordered to pay $2.5 million in restitution.  On Dec. 13, 2012, a federal jury found Msiakii guilty of eight counts of health care fraud.

According to court documents, Msiakii was the owner and operator of Joy Supply and General Services, a company based in Shreveport, La., that purported to provide orthotics and other DME, including power wheelchairs, to Medicare beneficiaries. 

Msiakii used Joy Supply’s Medicare provider number to submit claims to Medicare for DME, including orthotic devices, that were medically unnecessary and, in some cases, never provided.  Many of the orthotic devices were components of “arthritis kits” and purported to be for the treatment of arthritis-related conditions; however, the devices were neither medically necessary nor appropriate for such conditions.  The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads.

According to court documents, from November 2007 through September 2009, Msiakii submitted claims of approximately $6.7 million to Medicare and was paid approximately $3.6 million for devices that were not medically necessary and, in some cases, never provided.

This case is being prosecuted by Assistant Chief Laura M.K. Cordova of the Criminal Division’s Fraud Section.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.

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

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

NEW YORK -- Immigration Judge Joanna M. Bukszpan from the Executive Office for Immigration Review, New York Immigration Court, delivered the keynote speech and administered the oath of allegiance to approximately 150 candidates during a naturalization ceremony at 26 Federal Plaza in New York on July 12, 2013. The New York District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.

Biographical Information

Attorney General Janet Reno appointed Judge Bukszpan in September 1995. Judge Bukszpan received a bachelor of arts degree in 1963 from the City University of New York and a juris doctorate in 1976 from Brooklyn Law School. From 1978 to 1995, she was in private practice in New York. From 1976 to 1978, she worked as a trial attorney/general attorney (nationality) for the former Immigration and Naturalization Service in New York. Judge Bukszpan is a member of the District of Columbia and New York State Bars.

- EOIR -

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

The Justice Department announced today that it will monitor the municipal election on June 18, 2013, in the city of Evergreen, Ala., to ensure compliance with the Voting Rights Act of 1965.  The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
 
Under the Voting Rights Act, the department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the Attorney General or by a federal court order.  Federal observers will be assigned to monitor polling place activities in Evergreen based on the Attorney General’s certification.  The observers will watch and record activities during voting hours at polling locations, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
 
Each year, the department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country.  To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Civil Rights Division at 1-800-253-3931.
 
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.

Walter Lee Williams, a former university professor, has been indicted for allegedly engaging in sexual conduct with minors and producing child pornography, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Assistant Director Ronald T. Hosko of the FBI Criminal Investigative Division announced today.

Today, the FBI added Williams to its “Ten Most Wanted Fugitives” list, making him the 500th addition to the list.

Williams was charged in an indictment unsealed on Friday, June 14, 2013, in U.S. District Court in the Central District of California.  The indictment, which was filed on April 30, 2013, charges Williams with one count of producing child pornography, one count of traveling for the purpose of engaging in illicit sexual conduct with a minor and two counts of engaging in illicit sexual conduct in foreign places.
           
The indictment alleges Williams traveled from Los Angeles to the Philippines in January 2011 to engage in sex acts with two 14-year-old boys he met online in 2010.  Prior to his travel, Williams allegedly engaged in sexual activity via Internet webcam sessions with these boys and expressed a desire to visit them in the Philippines to have sex.  While in the Philippines, he allegedly engaged in sex acts with both boys and produced sexually explicit photos of one of the boys.  Williams fled the Los Angeles area approximately one week after returning from the Philippines.     

Williams is a 64-year-old White male.  He is 5’9”, weighs approximately 180 pounds and has grayish-brown hair and brown eyes.  Williams has previously resided in Palm Springs, Calif., and he was affiliated with a religious organization known as the Buddhist Universal Association in Los Angeles.  Williams has an extensive history of travel throughout the Southeast Asia region, specifically the Philippines.  He has reportedly resided in Indonesia, Polynesia and Thailand.  Williams is also alleged to have owned property in Thailand.  He may also travel to Mexico and Peru.

The FBI is offering a reward of up to $100,000 for information leading directly to the arrest of this subject, the newest addition to the “Ten Most Wanted Fugitives” list.  This is an ongoing investigation. 

Trial Attorneys Michael Grant and Herbrina Sanders from the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) are prosecuting this case.  The FBI Los Angeles field office is investigating the case.

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

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, was a speaker at the 27th Annual San Diego International Conference on Child and Family Maltreatment, held on January 28-31, 2013. Over 1600 participants were at the Conference from nearly 35 countries.

U.S. Attorney Limtiaco was joined by Suzanna Tiapula from the National District Attorney’s Association and their workshop was entitled, “Strategies for Justice: A Pacific Regional Response to Combat Human Trafficking” and introduced a regional model to combat human trafficking and child exploitation. The workshop included a discussion of collaborative efforts and coalition building among federal and local government agencies and non-governmental organizations, and the need for a multi-disciplinary approach to address the needs of victims and families.

The Response calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities. The response provides fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics, to law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders, in our Pacific region island communities, is critical to effective prevention and enforcement efforts in the region.

The 27th Annual San Diego International Conference on Child and Family Maltreatment was presented by the Chadwick Center for Children and Families at Rady Children’s Hospital-San Diego. U.S. Attorney Limtiaco’s track was one of many which included, Medicine, Investigations, Law, Mental Health, Forensic Interviewing, Child Welfare and Research, Military Families, Child Torture, Human Trafficking, Child Protection in Indian Country, Infant and Early Childhood Mental Health, Global Perspectives and Law and Ethics courses. The goal was to provide opportunities to learn from all the participants and to rekindle the passion to help create a world where children and families are healthy and free from abuse and neglect.

HAGATNA, GU -- United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), WAS THE KEYNOTE SPEAKER AT THE University of Guam’s (UOG) “It’s Happening: Human Trafficking Forum with a Special Emphasis on Sex Trafficking on Guam and Micronesia,” held on May 10, 2013, at the UOG Class Lecture Hall. The Forum was organized by UOG’s School of Business & Public Administration Government Public Information Spring ’13 class. U.S. Attorney Limtiaco’s presentation included information about the Pacific Regional Response to Combat Human Trafficking initiative.

The U.S. Attorney’s Office (“USAO”) for the Districts of Guam and the Northern Mariana Islands (“NMI”) continues to work collaboratively with the National District Attorney’s Association; U.S. Department of Interior, Office of Insular Affairs, Federal Ombudsman Office; and U.S. Department of State, Monitoring of Trafficking in Persons Office, on a Pacific Regional Response to Combat Human Trafficking.

The Pacific Regional Response to Combat Human Trafficking initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders. The response calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities. The response provides training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics. The critical training is provided to various groups in our Pacific region island communities, to law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders.

The objective of the Forum was to promote awareness to the sensitive issue of Human Trafficking with a focus on Sex Trafficking with Micronesia. Key leaders were invited to convey their current and future actions in regards to Human Trafficking. The Form was in correlation and support of Law Week 2013 and the 150th anniversary of the Emancipation Proclamation.

The Human Trafficking Forum included presentations from other community leaders in law enforcement, the Judiciary and non-governmental organizations and support groups. Attached are photos taken at the event.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, was the keynote speaker at the Soroptimist International of Guam’s 35th Anniversary and the Soroptimist International of the Marianas’ 27th Anniversary Charter Night celebration held on March 8, 2013, at the Sheraton Laguna Guam Resort

Last year, U.S. Attorney Limtiaco was honored by both Soroptimist organizations as the Soroptimist Founder Region Ruby Award Recipient. The Soroptimist Ruby Award is an Award “For Women Helping Women” which acknowledges women who are working to improve the lives of women and girls through their personal or professional activities. Their efforts help to promote the issues that are important to the Soroptimist organization. She received this award for her efforts focusing on creating awareness that human trafficking and sexual slavery are a critical global problem.

U.S. Attorney Limtiaco has also a been guest speaker at the Soroptimist International of the Marianas’ (SIM) program meetings to talk to members about new laws surrounding domestic violence, sexual assault and human trafficking, encouraging members from organizations like SIM to find some way to be involved.

Guam has two sister Soroptimist organizations: The Soroptimist International of Guam (SIG) and The Soroptimist International of the Marianas (SIM). SIG and SIM are both volunteer service organizations for business and professional women and men. Soroptimists are professional and business executives of all ages, cultures and ethnic groups. Members represent a wide array of professions, including physicians, attorneys, teachers, artists, chief executive officers of companies, business owners and government officials. A Soroptimist is a leader in the community, engaging in awareness, advocacy, and action in the service of the community and society, making the world a better place of humankind. The name, Soroptimist, means “best for women,” and that’s what the organization strives to achieve. Soroptimists are women and men at their best, working to help women in the community to be their best. The heart of Soroptimist’s mission is to “make a difference for women” through volunteer service to the community. Projects are carefully chosen to address challenges unique to today’s women.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited by the Honorable Ramona V. Manglona, Chief Judge of the District Court of the Northern Mariana Islands, to be the keynote speaker at the Naturalization Ceremony held on April 22, 2013, in the District Court of the Northern Mariana Islands, in Saipan. Fifteen (15) individuals from several countries, including the Philippines and Thailand, were newly sworn as United States citizens. The Naturalization Ceremony was held as part of the events to commemorate Law Week 2013.

U.S. Attorney Limtiaco, in her address and congratulatory remarks to the newly sworn United States citizens, stated, "... the year 2013 signifies the 150th anniversary of the Emancipation Proclamation. Dr. Martin Luther King, Jr. called upon our country to live up to our promise of equality for all. The United States Department of Justice, Civil Rights Division, works to uphold and protect the civil rights and constitutional rights of all Americans, particularly of the most vulnerable members of our society. It enforces federal statutes prohibiting discrimination on the basis of national origin, race, color, sex, disability, religion, and familial status."

"Justice is only served when it is practiced fairly and evenhandedly. Citizens need to know that they will be afforded justice without distinction as to national original, race, color creed, gender or status; and that the same rules apply for every citizen no matter of stature or influence in the community. We must continue to draw strength from our diversity as a nation, including those of different races, ethnicities, cultures and religions, as it is our diversity as a people and the strength that we gain from it that contributes to our resiliency as a nation during our most challenging times," said U.S. Attorney Limtiaco.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), at the invitation of Joey P. San Nicolas, Attorney General of the NMI, was a judge at the 29th Annual Attorney General’s Cup Speech Competition held on May 3, 2013, in the Supreme Court Courtroom in Saipan, NMI.

The Attorney General’s Cup offers CNMI high school students the opportunity to research a current issue affecting the CNMI and advocate for their position in front of a panel of judges and the community.

This topic for this year was, “Should the Commonwealth Government enact legislation that encourages economic development in the Northern Mariana Island?” U.S. Attorney Limtiaco was one of ten judges from both Guam and Saipan. Eight student finalists all from different high schools gave their speeches as they battled to receive the CNMI Attorney General’s Cup.

“The U.S. Attorney’s Office commends and congratulates the participating students of Kagman High School, Marianas High School, Mount Carmel School, Tinian Junior/Senior High School, Saipan Southern High School, Dr. Rita H. Inos Junior/Senior High School, Grace Christian Academy and Marianas Baptist Academy, for their outstanding efforts and advocacy at the 29th Annual Attorney General’s Cup Speech Competition. The students demonstrated their impressive critical thinking, research, debate and public speaking skills as they presented on this year’s speech competition issue, and are deserving of special recognition and acknowledgement for their commitment, hard work and diligent efforts,” stated U.S. Attorney Limtiaco.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was the guest speaker at the University of Guam’s (UOG) TRIO Programs Student Support Services (SSS) for their Spring 2013 Retention Activity held on Friday, May 10, 2013, at the UOG Multi-Purpose Lecture Hall. The Student Support Services Workshop was entitled, “Researching Potential Employers and Networking for Your Future.” U.S. Attorney Limtiaco’s presentation included information about the U.S. Attorney’s Office, its caseload, and the priorities and initiatives of the Department of Justice.

The mission of the TRIO Program is to "Instill, serve, and inspire students with a positive force towards achieving their higher education." U.S. Attorney Limtiaco was invited because of her unique experience and perspective which could help the TRIO SSS participants, especially those who desire a career in criminal justice. She was invited “to provide the UOG students with guidance and insight which will help them with their educational and career goals, while balancing the other important components of their lives such as family, work, spirituality, community service, and recreation.”

The SSS program provides support services to low-income students, first generation college students, and disabled students enrolled in post-secondary education programs. Eligible students may receive (among other services) personal and academic career counseling, career guidance, instruction, mentoring, and tutoring. The goal of SSS program is to increase the college retention and graduation rates of its participants and help students make the transition from one level of higher education to the next.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that after a year of planning, the State and Local Anti-Terrorism Training (SLATT) Program was very well-received in the Marianas. The program was presented by the the U.S. Department of Justice’s Bureau of Justice Assistance (BJA) ProgramU.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands, the Guam Homeland Security/Office of Civil Defense, the Commonwealth of the Northern Mariana Islands Office of Homeland Security and Emergency Management, the Joint Task Force-Homeland Defense. Two instructors, Richard Marquise and William Dyson from the Institute for Intergovernmental Research (IIR) provided the SLATT workshops to various law enforcement, hotel and private security, military anti-terrorism personnel and other community leaders. Topics discussed dealt with International Terrorism, Domestic Terrorism, Suspicious Activity Reporting and other national and regional security concerns.

The SLATT Program was conducted on Guam (April 23-24, 2013) and on Saipan (April 25-26, 2013). The specialized workshop on April 23, 2013, was comprised of 162 Guam participants from various law enforcement, hotel and private security, military anti-terrorism personnel and other community leaders. The SLATT Train-the-Trainer workshop held on day two, was comprised of 76 law enforcement homeland security personnel.

On Saipan, the specialized workshop on April 25, 2013, was comprised of 147 participants from different state and federal agencies in the CNMI. An additional workshop was held on April 26, 2013, where 32 individuals from various law enforcement agencies were invited back to participate in SLATT Train-the-Trainer course. This was the first time the SLATT Program was held in the Commonwealth of the Northern Mariana Islands.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands sponsored the training entitled, Foundational Skills for Child and Adolescent Interviews Training, which was held in Guam on April 18, 2013, with participants from the NMI via video teleconferencing. The main speaker for the training was Karen R. Blackwell, MSW, LCSW, Child/Adolescent Forensic Interviewer, from the Federal Bureau of Investigation, Denver Division. Ms. Blackwell is a licensed clinical social worker and has conducted in excess of 2500 forensic interviews with children, adolescents and persons with developmental disabilities. Ms. Blackwell teaches and trains both locally, nationally and internationally and is the recipient of the prestigious “2002 Excellence in Practice Award” presented by the Colorado Department of Human Services, Division of Child Welfare. Ms. Blackwell covered the topics, Understanding Child Interviewing Memory and Suggestibility; Adolesent Victims and Interview Guidelines. U.S. Attorney Limtiaco and Arlene T. Gadia, Social Services Supervisor from the DPHSS Child Protective Services spoke on Child Abuse Mandatory Reporting Requirements.

Participants at the training in Guam were from the Attorney General’s Office, Bureau of Alcohol, Tobacco and Firearms, the Guam Police Department, the Department of Public Health and Social Services-Child Protection Services, FBI, Healing Hearts Crisis Center, and the U.S. Attorney’s Office. Participants from the NMI were from the Department of Public Safety, Attorney General’s Office, and the U.S. Attorney’s Office

Two executives at a Virginia-based security contracting firm were sentenced in the Eastern District of Virginia for their roles in using a front company to obtain more than $31 million intended for disadvantaged small businesses as part of the Small Business Administration’s (SBA) Section 8(a) program. This program 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 sentencing by United States District Judge Leonie M. Brinkema.

 Joseph Richards, 52, of Arlington, Va., and David Lux, 66, of Springfield, Va., were sentenced today to 27 and 15 months in prison, respectively, after pleading guilty in March 2013 to conspiracy to commit major government fraud. Both men were ordered to complete community service as part of their supervised release following their prison terms. Richards was ordered to pay $120,378 in restitution, and Lux was ordered to forfeit $115,556.

According to court documents, Richards and Lux were executives at an Arlington-based security contracting firm referred to as Company A in court records. In approximately 2001, Keith Hedman, 53, of Arlington, 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 an employee, Dawn Hamilton, 48, of Brownsville, Md., 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, allocation of personnel, and government contracting activities.

Richards and Lux joined the scheme in 2005 and 2008, respectively. Hedman offered Richards and Lux ownership stakes in Company B in exchange for their assistance in misleading the SBA and other U.S. government agencies, and both men accepted. Once they joined the conspiracy, Richards and Lux took a variety of actions to further the fraud against the United States. In 2008, for example, both Richards and Lux helped Company B overcome a protest by another company that accused Company A and Company B of improperly obtaining a $48 million Coast Guard contract.

From 2008 to 2010, Richards moved to Company B’s payroll to help Hedman illegally operate Company B. In 2010, Lux helped Hedman withdraw more than $1 million in cash from Company B’s accounts, which Hedman then disbursed to various conspirators, including $100,000 in cash to both Richards and Lux. Richards and Lux also assisted Hedman, Hamilton, and other co-conspirators prepare false documents, including annual reviews, to submit to SBA and other government agencies.

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.

Six other defendants have pleaded guilty in the scheme:

• Hedman is scheduled to be sentenced by U.S. District Judge Gerald Bruce Lee on June 21, 2013.
• Hamilton is scheduled to be sentenced by U.S. District Judge T. S. Ellis, III on June 28, 2013.
• David Sanborn, 60, of Lexington, S.C., Company A’s former president, is scheduled to be sentenced by U.S District Judge Claude M. Hilton on July 19, 2013.
• John Hertogs, 42, of Winter Springs, Fl., Company B’s former director of operations, is scheduled to be sentenced by Judge Hilton on July 12, 2013, for submitting a fraudulent 8(a) application for a follow-on company that Hedman and Hamilton intended to use once Company B graduated from the 8(a) program.
• Derek Matthews, 47, of Harwood, Md., former Regional Director for the National Capital Region of the Federal Protective Service, is scheduled to be sentenced by Judge Brinkema on July 19, 2013, for a related bribery scheme in which Hedman agreed to pay Matthews $50,000 and a percentage of new business in exchange for Matthews helping Company B obtain contracts.
• Michael Dunkel, 59, of Merritt Island, Fl., is scheduled to be sentenced by Judge Lee on Oct. 4, 2013, for obtaining more than $4.4 million in payments by using Company B as a pass-through company on NASA contracts.

This case is being investigated by NASA Office of the Inspector General (OIG), 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.

Roland Kaufmann, CEO of Axius Inc., was sentenced today to serve 16 months in prison for his role in a conspiracy to bribe purported stock brokers and manipulate the stock of a company he controlled, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the Eastern District of New York Loretta Lynch.

Kaufmann, 60, a Swiss citizen, was sentenced today by U.S. District Judge John Gleeson in the Eastern District of New York.  In addition to his prison term, Kaufmann was sentenced to serve three years of supervised release and ordered to pay a fine of $450,000. 

Kaufmann pleaded guilty in January 2013 to one count of conspiracy to violate the Travel Act in connection with a scheme to bribe stock brokers to purchase the common stock of a company he controlled and to manipulate its stock price.  As part of his plea agreement, Kaufmann forfeited $298,740 gained through this crime.

According to court documents, Kaufmann controlled Axius, Inc., a purported holding company and business incubator located in Dubai.  As part of the scheme, the defendant and his co-conspirator, Jean Pierre Neuhaus, enlisted the assistance of an individual who they believed had access to a group of corrupt stock brokers, but who was, in fact, an undercover law enforcement agent.  Court documents reveal that they instructed the undercover agent to direct brokers to purchase Axius shares in return for a secret kickback of approximately 26 to 28 percent of the share price.  Kaufman and Neuhaus also instructed the undercover agent as to the price the brokers should pay for the stock and that the brokers were to refrain from selling the Axius shares they purchased on behalf of their clients for a one-year period.  By preventing sales of Axius stock, Kaufmann and Neuhaus intended to maintain the fraudulently inflated share price for Axius stock.

Jean Pierre Neuhaus has pleaded guilty and been sentenced for his role in the scheme.

The case is being prosecuted by Trial Attorney Justin Goodyear of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ilene Jaroslaw, with assistance from Fraud Section Trial Attorney Nathan Dimock.  The case was investigated by the FBI New York Field Office and the Internal Revenue Service New York Field Office.  The Department also recognizes the substantial assistance of the U.S. Securities and Exchange Commission. 

This prosecution was the result of efforts 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 2,700 mortgage fraud defendants. For more information on the task force, visit www.StopFraud.gov.

In an indictment unsealed on June 12, 2013, Robert and Judy Sathre, of Sheridan, Wyo. were charged by a federal grand jury in Cheyenne, Wyo., for conspiring to defraud the IRS and tax evasion relating to taxes owed by Robert Sathre for tax years 1995 and 1996. Judy Sathre was also charged with filing a false tax return for tax year 2007.

According to the indictment, Robert Sathre sold a Minnesota business and received installment payments in 1995 and 1996 for more than three million dollars. Robert Sathre concealed his income by filing a 1995 tax return in which he reported only $64,928 in total income. Robert Sathre then purchased land and set up another business, a gas station/convenience store in Sheridan, Wyo. known as the Rock Stop.
 
According to the indictment, the Sathres concealed assets by opening a foreign bank account in the Caribbean island of Nevis and by using purported trusts. In a ten-month period spanning 2005-2006, Mr. Sathre sent over $500,000 to the account in Nevis to keep the funds out of reach from the IRS. When Robert Sathre sold the Rock Stop in 2007, he had over $1,250,000 from the sale proceeds wired to the trust account of a Wyoming law firm. Later the Sathres directed the law firm to wire $900,000 from the trust account to their account at the Bank of Nevis. They also provided a false declaration and false promissory note to the Bank of Nevis to conceal the source of this transfer. Robert Sathre obtained a debit card linked to the foreign account to access funds locally. He also provided the Bank of Sheridan with an IRS form on which he falsely claimed that he was neither a citizen nor a resident of the United States.

The indictment also alleges that the Sathres tried to conceal their ownership of real estate. They used a purported trust to encumber their residence at Troon Place in Sheridan and to conceal their ownership of property in Hennepin County in Minnesota. To conceal ownership of the Rock Stop, they similarly used a second purported trust, at one point resigning as trustees and appointing their teenage daughter as the trustee.

The indictment also charges Judy Sathre with one count of filing a false tax return for 2007. The indictment alleges that the return was false both for reporting only $42 in interest income and for failing to disclose that she had a financial interest and signatory authority over the bank account at the Bank of Nevis.

A trial date has not been scheduled. An indictment is merely an accusation, and every defendant is presumed innocent unless and until proven guilty.
The conspiracy and tax evasion charges each carry a maximum potential penalty of five years in prison and a fine of $250,000. The false return charge carries a maximum potential penalty of three years in prison and a $250,000 fine.

This case is being prosecuted by Trial Attorneys Ellen Quattrucci and Ignacio Perez de la Cruz of the Justice Department’s Tax Division and was investigated by IRS – Criminal Investigation.

A federal grand jury in Salt Lake City yesterday returned an indictment charging Dick Reid Jenkins, a resident of Heber City, Utah with eighteen counts of presenting false claims to the United States.

 According to the indictment, in September 2008, Dick 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 sixteen other false federal income tax returns to be filed on behalf of other individuals.  These other false tax returns also used false Form 1099-OID and claimed federal income tax refunds totaling $8,407,623.  The indictment further alleges that Dick Jenkins was licensed by the state of Utah as a Certified Public Accountant at all times relevant to these charges.

 An indictment is not a finding of guilt.  Individuals charged in indictments are presumed innocent until proven guilty.  If convicted, Jenkins faces a maximum of 90 years in prison. 

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

Today the United States and the state of Arkansas filed a joint enforcement action against ExxonMobil Pipeline Company and Mobil Pipe Line Company (ExxonMobil) in federal district court in Little Rock, Ark.  The complaint addresses ExxonMobil’s unlawful discharge of heavy crude oil from a 20-inch-diameter interstate pipeline – the Pegasus Pipeline – that ruptured in Mayflower, Ark., on March 29, 2013. 
 
As alleged in the complaint, a segment of the Pegasus Pipeline ruptured in a residential neighborhood in the town of Mayflower.  The pipe was buried approximately two feet below the ground at that location.  The oil spilled directly into the neighborhood and then into nearby waterways, including a creek, wetlands, and Lake Conway.  Residents were forced to evacuate their homes due to the hazardous conditions in the neighborhood resulting from the spill.  The oil has contaminated land and waterways and impacted human health and welfare, wildlife, and habitat.  Cleanup efforts are still ongoing, and many residents still have not been able to return home.

The Pegasus Pipeline runs approximately 850 miles from Patoka, Ill., to Nederland, Texas.  The pipeline is used to transport Canadian heavy crude oil. The pipeline originally was constructed in the 1940s.

The complaint alleges six causes of action against the defendants.  The United States, on behalf of the U.S. Environmental Protection Agency (EPA), seeks civil penalties and injunctive relief under the federal Clean Water Act for the oil spill.  The state of Arkansas, on behalf of the Arkansas Department of Environmental Quality (ADEQ) by the authority of the Arkansas Attorney General, seeks civil penalties for violations of the Arkansas Hazardous Waste Management Act and the Arkansas Water and Air Pollution Control Act.  The state also seeks a declaratory judgment on ExxonMobil’s liability for payment of removal costs and damages related to the spill pursuant to the federal Oil Pollution Act. 

Related Materials:

Exxon Complaint

The Justice Department and U.S. Attorney Kenneth J. Gonzales of the District of New Mexico announced today that Science Applications International Corporation (SAIC) has paid $11.75 million to settle allegations filed in the U.S. District Court for the District of New Mexico that it violated the False Claims Act by charging inflated prices under grants to train first responder personnel to prevent and respond to terrorism attacks.  SAIC provides scientific, engineering, and technical services to commercial and government customers and is headquartered in Northern Virginia.

Between 2002 and 2012, the New Mexico Institute of Mining and Technology (New Mexico Tech) received six federal grants from the Department of Justice, the Department of Homeland Security, and the Federal Emergency Management Agency to train first responder personnel to prevent and respond to terrorism events involving explosive devices.  New Mexico Tech awarded subgrants to SAIC to provide course management, development, and instruction.  The United States alleged that SAIC’s cost proposals falsely represented that SAIC would use far more expensive personnel to carry out its efforts than it intended to use and actually did use, resulting in inflated charges to the United States.

“To ensure that federal tax dollars are properly spent, federal grant recipients and contractors must provide cost proposals and estimates that reflect their honest judgment about project costs,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice.  “We will continue to ensure that funds designated for vital programs such as this one are properly used for their intended purpose.”

The False Claims Act is sometimes referred to as “Lincoln’s Law” because it was enacted at the urging of President Lincoln to combat widespread fraud which was being perpetrated on the Union Army by Civil War defense contractors.  While originally enacted to combat defense contractor fraud, the False Claims Act has long been successfully employed to combat false claims against the United States in many other contexts, including healthcare fraud.  The Act prohibits the submission of false claims for government money or property and allows the United States to recover up to three times the actual damages and penalties for a violation. 

The lawsuit against SAIC was originally filed under the whistleblower provisions of the False Claims Act by Richard Priem, SAIC’s former project manager for the first responder training program.  Under the Act’s whistleblower provisions, a private party may file suit on behalf of the United States and share in any recovery, and the United States may elect to intervene and take over the case, as it did here.  Mr. Priem’s share has not yet been determined.

“The False Claims Act is a critical tool for weeding out fraud and protecting taxpayers,” said U.S. Attorney Kenneth J. Gonzales of the District of New Mexico.  “The Act provides an incentive for individuals with knowledge of fraud against the government to disclose that information.  When whistleblowers bring fraud allegations to the government’s attention and assist us in this public-private partnership to fight fraud, the public benefits and potential fraudsters are deterred.”

The case was jointly handled by Trial Attorneys Don Williamson and Daniel Hugo Fruchter of the Commercial Litigation Branch of the Justice Department’s Civil Division and Assistant U.S. Attorney Howard R. Thomas and Auditor Julie A. Ford of the U.S. Attorney’s Office for the District of New Mexico.  The claims resolved by this settlement are allegations only and there has been no determination of liability.  The case is United States ex rel. Priem v. SAIC, No-12-cv-148 (D.N.M.).

Robert Ranieri, 37, of Glendora, N.J., pleaded guilty today to committing loan sharking activities on behalf of the Philadelphia La Cosa Nostra (LCN) Family.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division, made the announcement after the plea was accepted by U.S. District Judge Eduardo C. Robreno in the Eastern District of Pennsylvania.

Through court documents and statements made in court, Ranieri admitted that he conspired with Philadelphia LCN Family capo Anthony Staino and others to make a usurious loan to an undercover FBI agent and used threats of violence to collect payments on the loan. 

At sentencing, scheduled for Sept. 25, 2013, Ranieri faces a maximum penalty of 40 years in prison.

The case was investigated by the FBI, the Internal Revenue Service-Criminal Investigation, the Pennsylvania State Police, the New Jersey State Police, the Philadelphia Police Department, the U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor’s Employee Benefits Security Administration.  Additional assistance was provided by the New Jersey Department of Corrections.

The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole of the Eastern District of Pennsylvania.  Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.

A federal jury in the Eastern District of Pennsylvania that voted in favor of death for a North Philadelphia drug kingpin, Kaboni Savage, today voted in favor of life for a co-defendant, Steven Northington. Savage was sentenced to death last week by U.S. District Court Judge R. Barclay Surrick.

Acting Assistant Attorney General Mythili Raman for the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania, and Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Division made the announcement after the jury’s decisions.

On May 31, 2013, a jury voted in favor of death for Savage, 38, who is the first defendant in the Eastern District of Pennsylvania to receive the death penalty in federal court. Savage was convicted on May 13, 2013, of 12 counts of murder in aid of racketeering, one count of retaliating against a witness by murder, conspiracy to commit murder in aid of racketeering, and one count of conspiracy to participate in a racketeering enterprise.  Savage ordered the Oct. 9, 2004, firebombing of the home of Eugene Coleman’s family.  Coleman was a federal witness at the time.  Six people were killed in the arson murder, including four children. Savage was sentenced to death on June 3, 2013.

Today, the same jury voted in favor of life for Northington, 41, who was convicted of the murders of Barry Parker in 2003 and of Tybius Flowers in 2004 in addition to racketeering (RICO) conspiracy. Northington will be formally sentenced by U.S. District Judge Surrick on June 19, 2013.

“For more than a decade, Kaboni Savage and members of his organization used murder and violence to intimidate and retaliate against anyone who threatened their drug trade, and along the way mercilessly killed a cooperating witness’s family members, including innocent children,” said Acting Assistant Attorney General Raman. “We are hopeful that the jury’s verdict brings some measure of justice to the victims of Savage’s heinous crimes.”

“Achieving justice sometimes requires us to ask the citizens on a jury to make the most difficult sentencing decision imaginable,” said U.S. Attorney Memeger. “In this case, after convicting the defendants of crimes involving murder, the jurors chose death for Kaboni Savage and life for Stephen Northington.  The defendants’ horrific conduct struck at the very heart of our criminal justice system, which depends on witnesses testifying without fearing for their lives or the lives of their family members.  We appreciate the time and effort that the jury committed to reaching a fair verdict as to each defendant.  While the verdicts cannot restore the loss of life taken by members of the Kaboni Savage drug organization, we hope that the jury verdicts bring some sense of closure to the victims’ families and friends.  I want to thank the phenomenal investigative and trial team that worked so hard over many years to bring the defendants to justice for their despicable crimes.”

“Kaboni Savage and his crew murdered men, women, and children – for money, power, and, ultimately, just for revenge,” said FBI Special Agent in Charge Hanko. “They thought no more of taking lives than of taking a phone call. After more than a decade of brutality, Northington’s life sentence and Savage’s death sentences are justly deserved.”

Savage’s sister and co-defendant, Kidada Savage, was also found guilty of the RICO conspiracy and the Coleman family murders.  Co-defendant Robert Merritt was found guilty of the RICO conspiracy. They each face a mandatory life sentence at sentencing.
 
 Savage’s drug enterprise operated primarily in the North Philadelphia area from at least late 1997 to 2010.  After Savage was indicted on drug charges in 2004, he ordered the murders of the family of government witness Eugene Coleman.  Lamont Lewis, who has pleaded guilty, firebombed the Coleman family home on Savage’s orders which Kidada Savage relayed to Lewis.

 In addition to the six people inside the Coleman home, Savage was convicted of the following murders:

• Kenneth Lassiter, 44, of Lansdale, Pa., on March 19, 1998, near the corner of 8th and Butler Streets in Philadelphia;

• Mansur “Shafiq” Abdullah, 22, of 11th Street, Philadelphia, on Sept. 6, 2000.  Abdullah was shot and his burned body was later recovered in the 4200 block of North Park Avenue in Philadelphia;   

• Carlton “Mohammed” Brown, 27, of  Darien Street, Philadelphia, on Sept. 13, 2001;

• Barry Parker, 32, of Susquehanna Avenue, Philadelphia, on February 26, 2003, in the 3900 block of North Franklin Street in Philadelphia;

• Tyrone Toliver, 26, of Cherry Hill, N.J., on March 14, 2003, in the 3500 block of North Palmetto Street in Philadelphia; and

• Tybius Flowers, 32, of K Street, Philadelphia, on March 1, 2004, in the 3700 block of N. 8th Street in Philadelphia.

 The case was investigated by the FBI, the Internal Revenue Service – Criminal Investigation, the Philadelphia Police Department, the Philadelphia District Attorney’s Office, and the Maple Shade, New Jersey Police Department.  The United States Bureau of Prisons, the United States Marshals Service, and the Philadelphia/Camden High Intensity Drug Trafficking Area Task Force also assisted in the investigation. The case was prosecuted by Trial Attorney Steven Mellin of the Criminal Division’s Capital Case Unit at the U.S. Department of Justice and Assistant United States Attorneys David E. Troyer and John M. Gallagher.

The Justice Department announced today that it has entered into an interim settlement agreement with the State of Rhode Island and the City of Providence that will resolve violations of the Americans with Disabilities Act (ADA) for approximately 200 Rhode Islanders with intellectual and developmental disabilities (I/DD).

This first-of-its-kind agreement addresses the rights of people with disabilities to receive state- and city-funded employment and daytime services in the broader community, rather than in segregated sheltered workshops and facility-based day programs exclusively with other people with disabilities.  The department launched an ADA investigation in January 2013 into Rhode Island’s day activity service system for people with I/DD. The department’s initial investigation found that the majority of people receiving state- and city-funded employment and daytime services through segregated programs can and want to work and receive services in more integrated community settings.  Under the ADA people with disabilities have the right to receive services in the most integrated settings appropriate for them. 

This matter was initially brought to light by an investigation by the U.S. Department of Labor’s Wage & Hour Division, regarding improper subminimum wages being paid to people with disabilities working at TTP.  This week, the Department of Labor revoked TTP’s certificate under the Fair Labor Standards Act Section 14(c).

The Department of Justice’s investigation has initially focused on a private provider, Training Thru Placement (TTP), as one of the largest facility-based employment service providers in the state’s system. The investigation also revealed that the school-based sheltered workshop at the Harold A. Birch Vocational Program at Mount Pleasant High School (Birch), was the point of origin for many people entering TTP.  Since the department began its investigation earlier this year, the state and the city have worked cooperatively with the department to reach an agreement to resolve the violations. 

The department found that the approximately 90 workers with disabilities at TTP were not in the most integrated setting appropriate for them and that the students in the sheltered workshop at Birch were at serious risk of unnecessary placement at TTP following their exit from school.  TTP is located in a residential neighborhood, without easy access to stores, offices or public spaces. People with I/DD typically remain at TTP all day, packaging and labeling medical supplies, wrapping television remote controls in plastic or hand-sorting jewelry.  The typical tenure at TTP is 15 to 30 years.  TTP workers have little or no contact with persons without disabilities. According to TTP’s reports, TTP workers with disabilities make an average hourly wage of $1.57 per hour, with one individual making as little as 14¢ per hour.  

The department found that people with disabilities at TTP are capable of working in real jobs with supports, and participating in activities in the community, such as volunteering, exercising, taking classes, going to museums, plays and sporting events.  Many TTP clients had specifically and repeatedly asked for help to find and be supported in real jobs in the community.  However, the state and city did not respond to their requests and did not make integrated employment services and community-based daytime activities available.  For example, one person with I/DD, who has worked at TTP for approximately 30 years, said that he asked nearly every year to work in a hardware store, yet he was never assessed or received services or supports necessary for him to do so. When asked how he would feel about working in integrated employment, he said, “I’d feel I accomplished something . . . something to be happy about.” 

The sheltered workshop at Birch was also found to discriminate against its approximately 85 students with I/DD because it cultivated, trained and prepared students to work at TTP as adults.  The work that Birch’s students performed in the school’s sheltered workshop was similar to tasks performed by TTP’s service recipients. Students ages 14 to 21 with I/DD would participate in the Birch sheltered workshop for one or two 55-minute periods per day, sometimes to do work for TTP.  At times when the Birch sheltered workshop faced deadlines, some students were removed from their regular classes and spent large portions of their school days in the workshop.  Students were generally denied diplomas and received only “certificates of attendance.”  Students at the Birch sheltered workshop were paid between 50¢ and $2 per hour, or were not paid at all, no matter what job function they performed or how productive they were.   

The school provided virtually no opportunities for students to experience or prepare for real jobs and made direct referrals to adult sheltered workshops as the students neared the end of school.  Because of the lack of integrated opportunities and direct referrals,  invariably, the  students would move on to an adult sheltered workshop,  TTP, after they left school instead of to integrated work places. 

 “The Supreme Court made clear over a decade ago that unnecessary segregation of people with disabilities is discriminatory.  Such segregation is impermissible in any state or local government program, whether it be residential services, employment services, or other programs,” said Eve Hill, Senior Counselor to the Assistant Attorney General for Civil Rights. “Unfortunately, the type of segregation and exploitation we found at TTP and Birch is all too common when states allow low expectations to shape their disability programs.  The reforms the state and city will undertake under this interim agreement will support people with disabilities to participate in their communities.  Thanks to the vision and leadership of the State and the City, both the individuals and their communities will benefit.” 
 
The state has now stopped providing services or funding for new participants at TTP’s sheltered workshop and facility-based day program, and the city has stopped providing services or funding to Birch’s in-school sheltered workshop.  Over the next year, the state and city will provide supported employment services and placements to all adults at TTP and youth in transition from Birch to help them find, get, keep and succeed in real jobs. The services will be designed to help people access jobs in typical work settings where they can interact with non-disabled coworkers and customers, and enjoy the same employment benefits as non-disabled peers.  When individuals are not working, they will have access to integrated day services. 

Under the agreement, individuals will receive supported employment and integrated day services sufficient to support a normative 40 hour work week, with the expectation that individuals will work, on average, in a supported employment job at competitive wages for at least 20 hours per week.
 
 For students leaving Birch, the agreement requires a robust career development and transition planning process to ensure that youth can successfully move into community-based jobs, rather than to segregated settings like TTP.  The department’s statewide investigation of the state’s day activity service system for people with I/DD will continue. The interim agreement is due to the efforts of the following Civil Rights Division staff:  Regina Kline, Sheila Foran,  Justin Park, Lance Simon and Chloe Holzman.

Please visit www.ada.gov/olmstead  to learn more about the Division’s ADA Olmstead enforcement efforts and www.justice.gov/crt to learn more about the laws enforced by the Justice Department’s Civil Rights Division.

Related Materials:

Agreement
Complaint

Lanisha D. Applewhite of Richmond, Calif., was indicted by a federal grand jury in San Francisco, for aiding and assisting the preparation and presentation of false and fraudulent federal income tax returns as well as identity fraud, the Justice Department and Internal Revenue Service (IRS) announced today.

According to the indictment, from 2008 through 2011, Applewhite, a return preparer, aided and assisted in the preparation and presentation of false and fraudulent federal income tax returns containing claims for deductions and credits to which her clients were not entitled.  In addition, six counts allege that Applewhite used individuals’ Social Security numbers without lawful authority in preparing false federal income tax returns.

The maximum penalty for aiding and assisting the preparation of false claims is three years in prison and a fine of $250,000 for each count of conviction.  The maximum penalty for each count of identity fraud is 15 years in prison and a fine of $250,000.

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

This case is being investigated by special agents of IRS - Criminal Investigation.  Trial Attorneys Charles O’Reilly, Erin Mellen and Sonia Owens of the Justice Department’s Tax Division are prosecuting the case.

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

A managing partner of a U.S. broker-dealer was arrested today on felony charges arising from a conspiracy to pay bribes to a senior official in Venezuela’s state economic development bank, Banco de Desarrollo Económico y Social de Venezuela (BANDES). 

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

Ernesto Lujan, 50, among others, allegedly arranged the bribe payments to Maria De Los Angeles Gonzalez De Hernandez at BANDES in exchange for her directing BANDES’s financial trading business to the Broker-Dealer. Lujan was arrested this morning in Wellington, Fla., where he resides, and was presented in federal court in West Palm Beach, Fla. 

“The huge bribes Mr. Lujan and others allegedly paid funneled millions to his firm and into his own pockets,” said Acting Assistant Attorney General Raman. “Bribery corrupts markets, and this arrest – just the latest in the Department’s recent series of anti-corruption charges in various districts – is yet another demonstration that, at the end of the day, the real dividends bribe payers reap are criminal charges.”
 
“From his perch as managing partner Ernesto Lujan allegedly engaged in a bribery scheme designed to drum up foreign trading business for his firm,” said U.S. Attorney Bharara. “Along with his alleged cohorts, three of whom were arrested last month, he pocketed millions from the alleged scheme which was executed through kickbacks to a Venezuelan government official and through money laundering.”

  “As alleged, Lujan led a conspiracy to bribe a foreign government bank official to steer business to his firm,” said FBI Assistant Director-in-Charge Venizelos. “As previously alleged, much of this trading activity was conducted solely to generate fees for the firm. Lujan personally reaped millions in profits, and used Swiss bank accounts to conceal both the bribes and his own proceeds of the scheme.”

On May 3, 2013, Gonzalez, along with two employees of the Broker-Dealer, Tomas Alberto Clarke Bethancourt and Jose Alejandro Hurtado, were arrested on separate charges relating to this bribery scheme.  On May 6, 2013, the government filed a civil forfeiture action in Manhattan federal court seeking the forfeiture of assets held in a number of bank accounts associated with the scheme, including several bank accounts located in Switzerland, and the forfeiture of several properties in the Miami area related to Hurtado that were purchased with his proceeds from the scheme.  That same day, the court also issued seizure warrants for multiple bank accounts and a restraining order relating to those Miami properties.

In a separate action, the U.S. Securities and Exchange Commission (SEC) announced civil charges against Lujan.

According to the allegations in the criminal complaint unsealed today, and other documents filed in Manhattan federal court, Lujan, a managing partner of the Broker-Dealer, which was headquartered in New York City, was the branch manager of its Miami offices.  In 2008, the Broker-Dealer established a group called the Global Markets Group, which included Lujan, Clarke and Hurtado, and which offered fixed income trading services to institutional clients.  One of the Broker-Dealer’s clients was BANDES, which operated under the direction of the Venezuelan Ministry of Finance.  The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding.  Gonzalez, a BANDES official, oversaw the development bank’s overseas trading activity.  At her direction, BANDES conducted substantial trading through the Broker-Dealer.  Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales. 

From December 2008 through October 2010, Lujan, along with Clarke, Hurtado and Gonzalez, allegedly participated in a bribery scheme in which Gonzalez directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer, including Lujan, split the revenue the Broker-Dealer generated from this trading business with Gonzalez.  During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES.  Agents and employees of the Broker-Dealer, including Lujan, Clarke and Hurtado, allegedly devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer.

Court records allege that to further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that she held in Switzerland, among other places.  For example, at least $9.5 million was transferred from the Broker-Dealer to a Swiss bank account controlled by Clarke, who in turn transferred at least $6.5 million to a Swiss bank account controlled by Lujan.  Lujan then allegedly transferred at least $1.5 million of these proceeds to a Swiss bank account controlled by Gonzalez.

Lujan was charged with one count each of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), violation of the FCPA, conspiracy to violate the Travel Act and violation of the Travel Act, which each carry a maximum penalty of five years in prison. He is also charged with conspiracy to commit money laundering and money laundering, which each carry a maximum penalty of 20 years in prison.

This ongoing investigation is being conducted by the FBI, with assistance from the SEC and the Justice Department’s Office of International Affairs. Assistant Chief James Koukios and Trial Attorneys Maria Gonzalez Calvet and Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution. 
 
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

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

The Justice Department announced today that it has reached a settlement with DeCamp Bus Lines Inc., a New Jersey transportation company, to ensure that bus transportation is provided on equal terms to people with disabilities. 

The Civil Rights Division of the U.S. Department of Justice and the U.S. Attorney’s Office for the District of New Jersey determined that DeCamp Bus Lines violated the Americans with Disabilities Act (ADA) by requiring that passengers with disabilities provide 48 hours of advance notice to secure a wheelchair-accessible bus, even though passengers without disabilities did not have to provide any advance notice.  The settlement agreement requires DeCamp to comply with all ADA requirements for accessible service, and not exclude persons with disabilities from its transportation services.

As part of compliance with the ADA, DeCamp will stop requiring that passengers with disabilities provide advance notice to secure an accessible bus and to ensure that no passenger with a disability is denied an accessible bus when the passenger does not provide advance notice. DeCamp will also no longer post, distribute or publish any written material that states that a passenger with a disability is required to provide advance notice to secure accessible transportation and train all employees and contractors on the requirements of the ADA.

“Individuals who use wheelchairs should be able to expect the same level of bus service from large operators that is provided to others,” said Eve L. Hill, Senior Counselor to the Assistant Attorney General of the Civil Rights Division.  “The department is committed to ensuring that bus companies are complying with this requirement.”

“People with disabilities should not be forced to take needless action simply to use a bus service designed for everyone,” said U.S. Attorney for the District of New Jersey Paul J. Fishman. “With this settlement, the Justice Department ensures individuals riding DeCamp will receive correct information about their access to transportation, and that access will not be denied.”

Title III of the ADA prohibits discrimination against people with disabilities by public accommodations, including motorcoach companies.  Since Oct. 29, 2012, the Department of Transportation’s regulations implementing the ADA require that all large, fixed-route motorcoach bus fleets be 100 percent accessible to individuals with disabilities, including individuals who use wheelchairs.  Once a fleet is 100 percent accessible, the motorcoach bus company may no longer require advance notice to provide accessible service.  The Department of Transportation’s regulations also require that such companies perform regular maintenance checks to ensure that wheelchair lifts work, train their employees on accessibility requirements and file annual accessibility reports with the Federal Motor Carrier Safety Administration of the U.S. Department of Transportation.

The United States was represented by Trial Attorneys David W. Knight and Michael Riess of Civil Rights Division, and Assistant U.S. Attorney Michael Campion of the U.S. Attorney’s Office for the District of New Jersey.

To find out more about the ADA, this settlement, or the obligations of public accommodations, call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov.  ADA complaints may be filed by email to ada.complaint@usdoj.gov.

The former president and chief executive officer of U.S. Mortgage, a loan servicing company in Nevada, pleaded guilty today for his role in a scheme to defraud Wells Fargo Bank out of more than $8 million. 

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada made the announcement after the plea was accepted by U.S. District Judge Andrew P. Gordon. 

Earl Gross, 75, of Las Vegas, pleaded guilty to one count of bank fraud.  Gross faces a maximum penalty of 30 years in prison when he is sentenced on Sept. 19, 2013. Gross has agreed to forfeit $8,440,439 pursuant to his plea agreement.

According to plea documents, Wells Fargo Bank contracted with U.S. Mortgage to service pools of residential mortgage loans held by investors in mortgage-backed securities.  Under the agreement, Gross and U.S. Mortgage were obligated to collect from the borrowers the monthly payments that the borrowers made toward their mortgage obligations and forward these proceeds to Wells Fargo Bank.  In the event that a borrower paid off the loan – usually by selling the mortgaged property – U.S. Mortgage was obligated to remit to Wells Fargo Bank the full payoff amount.  U.S. Mortgage agreed to provide Wells Fargo Bank with monthly reports, which described the status of the loans, such as the balance, principal and interest, and payment status and received servicing fees for each loan it serviced. 

According to the indictment, from 2004 to 2009, Gross and U.S. Mortgage withheld more than $8 million in loan payoffs that were due Wells Fargo Bank by submitting to the bank reports stating that numerous borrowers were continuing to make monthly payments when in fact they had paid off the loans in full.  Rather than remit to Wells Fargo Bank the full payoff amount, Mr. Gross and U.S. Mortgage forwarded only what the borrowers’ monthly payment would have been and retained the difference in U.S. Mortgage’s bank account.  To deceive Wells Fargo Bank about the status of paid off loans, Mr. Gross and U.S. Mortgage created fake amortization schedules indicating that borrowers who had sold and paid off homes were continuing to make monthly payments.  In addition to withholding loan payoff amounts to which he was not entitled, Mr. Gross charged Wells Fargo Bank fees to service mortgage loans that had been paid off.    

The case was investigated by the FBI. This case is being prosecuted by Brian R. Young and Charles La Bella of the Criminal Division’s Fraud Section, with assistance from Roberto Iraola of the Office of International Affairs and the United States Attorney’s Office for the District of Nevada.  

Today’s guilty plea was a result of efforts 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 2,700 mortgage fraud defendants. For more information on the task force, visit www.StopFraud.gov.

The Department of Justice, the Department of Education and the Department of Health and Human Services sent a joint letter today to the nation’s medical schools, dental schools, nursing schools and other health-related schools regarding hepatitis B discrimination. 

In the letter, the departments express concern that some health-related schools may be making enrollment decisions based on an incorrect understanding of the hepatitis B virus, resulting in discrimination. 

The letter updates schools on the latest recommendations from the Centers for Disease Control and Prevention (CDC) regarding the participation of students with hepatitis B in health-related schools.  The letter also emphasizes the importance of CDC’s recommendations, especially as they relate to the schools’ obligation to comply with federal laws prohibiting discrimination on the basis of disability, race, color and national origin.

Approximately 800,000 to 1.4 million people in the United States have hepatitis B.  Asians, Native Hawaiians and Pacific Islanders make up roughly 4.5 percent of the U.S. population, but represent 50 percent of the persons with hepatitis B in the United States. 

The letter cites a March 2013 settlement agreement that the Justice Department reached with a medical school and a school of osteopathic medicine resolving allegations that the schools violated the Americans with Disabilities Act by excluding previously-accepted applicants with hepatitis B from their programs.

The updated CDC recommendations, based on the most current scientific information, dispel many myths associated with hepatitis B and provide guidance to health-related schools on managing students with the virus.  The CDC also notes that since the last update of the recommendations in 1991, there have been no reports of hepatitis B transmission in the United States or other developed countries from medical or dental students to patients.  Among other recommendations, the CDC recommends that chronic hepatitis B virus infection, in itself, should not preclude the study or practice of medicine, surgery, dentistry or allied health professions.

 “The Justice Department strongly urges health-related schools to review the CDC’s recommendations and to ensure that their policies and practices comply with federal nondiscrimination laws,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division of the Justice Department.  “Applicants and students with hepatitis B should not have to face exclusion on the basis of unfounded fears and stereotypes, and the Justice Department will not tolerate it.”

“Both public health and civil rights will be promoted when medical schools rely on the most recent scientific information, not overbroad generalizations, in dealing with medical students with hepatitis B,” said Seth Galanter, Acting Assistant Secretary for Civil Rights in the Department of Education. 

Leon Rodriguez, Director of the Office for Civil Rights in the Department of Health and Human Services, agrees that health-related schools must ensure that they do not deny equal access to individuals based on discrimination, adding:  “The CDC recommendations promote public health and safety while also offering guidance on the management of students with hepatitis B.  Our agencies place considerable weight on this guidance in our enforcement of federal civil rights laws.”

The Departments of Justice, Education, and Health and Human Services share responsibility for protecting the rights of students and applicants with disabilities, including those with hepatitis B, in schools of higher education by enforcing titles II and III of the Americans with Disabilities Act and Section 504 of the Rehabilitation Act.  These laws prohibit covered postsecondary institutions from discriminating on the basis of disability and from refusing to make reasonable modifications to their policies, practices or procedures when necessary to avoid discrimination on the basis of disability, unless such modifications would fundamentally alter the nature of the program or the services provided.  The Departments of Justice, Education, and Health and Human Services also enforce Title VI of the Civil Rights Act, which prohibits discrimination on the basis of race, color or national origin in programs and activities receiving federal financial assistance, including those of health-related schools.

Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.  Additional information about the Department of Education’s Office for Civil Rights is available on its website at www.ed.gov/ocr/.  Additional information about the Department of Health and Human Service’s Office for Civil Rights is available on its website at www.hhs.gov/ocr/. 

Related Materials:

Letter

Al J. Hurley, a former county commissioner in Sumter County, Ga., was sentenced today to 36 months in prison stemming from his acceptance of illicit payments in exchange for his official efforts to secure government contracts for a private contractor, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Middle District of Georgia U.S. Attorney Michael J. Moore announced.

Hurley, 55, of Americus, Ga., was sentenced today by U.S. District Judge W. Louis Sands.  On Dec. 3, 2012, a federal jury sitting in the Albany Division of the Middle District of Georgia found Hurley guilty of one count each of attempted extortion and federal program bribery.

Hurley was first elected to the five-member Sumter County board of commissioners in 1999.  As the primary governing body for the county, the board presided over a variety of official matters, including the bidding process for and award of various county contracts.

Evidence at trial showed that from September to December 2011, Hurley, in his capacity as a county commissioner, solicited and agreed to accept cash payments – including $5,000 on Oct. 23, 2011, and $15,000 on Dec. 19, 2011 – from a private contractor, in exchange for Hurley’s repeated promises to use official action and influence to help facilitate the award of county contracting work to the contractor.

In particular, Hurley told the contractor that he would help him win a $100,000 depot renovation contract in a city within Hurley’s district.  Trial testimony also established that, in order to drive up the bribe amount, Hurley invented two inside contacts that he claimed to have at a new racetrack project in his district, and claimed the contacts could influence the award of related contracting work in favor of the contractor.  Hurley, who testified, admitted the contacts did not exist.

This case was investigated by the FBI. This case was prosecuted by Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia. 

Christopher Cordelle Davis, of Montgomery County, Ala., was indicted by a federal grand jury in the Middle District of Alabama for his role in a scheme to file fraudulent tax returns using stolen identities, the Justice Department and Internal Revenue Service (IRS) announced today following Davis’s arrest. He was charged with conspiracy to defraud the United States, five counts of wire fraud, and five counts of aggravated identity theft.

According to the indictment, Davis provided stolen identities to Kenneth Jerome Blackmon Jr. Davis and Blackmon then filed fraudulent tax returns using the stolen identities.  The refunds would be directed to debit cards.  Davis would recruit individuals to obtain the debit cards and to go on trips during which the cards would be used to cash out the refund money at various locations in different states, including Georgia and South Carolina.  The indictment also alleges that in September 2011, Davis possessed over 600 stolen identities, some taken from a medical facility in Alabama and over 200 prepaid debit cards in Gwinnett County, Ga. Blackmon was previously convicted and sentenced to 51 months in prison for his role in the conspiracy.
 
An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty. If convicted, Davis faces a maximum potential sentence of five years in prison for the conspiracy charge, up to 20 years in prison for each wire fraud charge and a mandatory two-year sentence for the aggravated identity theft counts. He will also be subject to fines and mandatory restitution and forfeiture if convicted.
 
This case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Jason Poole and Justin Gelfand of the Justice Department’s Tax Division are prosecuting the case with assistance from the U.S. Attorney’s Office for the Middle District of Alabama and, in particular, Assistant U.S. Attorney Todd Brown.

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

The Justice Department announced today that it has entered into a consent decree with the town of Griffith, Ind. that, if approved by the court, will resolve allegations that the Griffith Police Department discriminated against Sergeant Marlene Starcevich based on her sex in violation of Title VII of the Civil Rights Act of 1964.  Title VII prohibits employment discrimination based on race, color, sex, national origin, or religion and retaliation for engaging in protected activity.  

The department’s complaint was filed today along with a notice informing the court of the simultaneous filing of a consent decree to resolve the complaint. The complaint alleges that the Griffith Police Department violated Title VII when it failed to assign Starcevich to a shift commander position because of her sex.  Starcevich is a 22-year veteran of the Griffith Police Department and the only female officer in the police department’s history.   According to the complaint, while the Griffith Police Department routinely assigned its male sergeants to shift commander positions, when a shift commander position became available in July 2010, Griffith denied Starcevich the position because of her sex.   

According to the complaint, instead of assigning Starcevich to the open and available shift commander position, the Griffith Police Department promoted a male corporal to sergeant and assigned him as shift commander.  The police department did not make Starcevich a shift commander but, instead, placed Starcevich as second-in-command to another male sergeant.
 
Under the terms of the consent decree, which must still be approved by the U.S. District Court for the Northern District of Indiana, the Griffith Police Department agreed to injunctive relief that prohibits Griffith from denying Starcevich assignments because of her sex, or otherwise unlawfully discriminating against her.  The Police Department has already assigned Starcevich to shift commander duties and must also pay her $5,000 in monetary relief.  In addition, the town of Griffith must revise its equal employment opportunity policies to protect its employees from discrimination, and conduct training of its personnel regarding these policies.

“Gender discrimination in employment of any kind will not be tolerated,” said Jocelyn Samuels, Principal Assistant Attorney General of the Civil Rights Division.  “This lawsuit should send a clear message that the department is committed to eliminating and remedying all forms of gender discrimination in the work place and that we will take necessary action to vigorously protect the rights of those in the public sector facing discrimination.”

Additional information about Title VII can be found on the Justice Department website, www.justice.gov/crt/emp , as well as on the Equal Employment Opportunity Commission’s website at www.eeoc.gov.

The Department of Justice today announced new guidelines for the payment of attorneys’ fees and expenses in large chapter 11 bankruptcy cases in order to enhance disclosure and transparency in the compensation process and to help ensure that attorneys’ fees and expenses are based on market rates. The guidelines, which will go into effect on Nov. 1, 2013, were developed by the U.S. Trustee Program (USTP), the component of the department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. 

“The costs of bankruptcy fall on the creditors and employees of the debtor companies,” said Acting Associate Attorney General Tony West. “At a time when both the public and the most sophisticated participants in the bankruptcy process say bankruptcy attorneys’ costs are rising too rapidly, these guidelines are designed to ensure that statutory requirements limiting bankruptcy fees to market rates – not premium rates – are followed.”

The Bankruptcy Code allows professionals who provide services during a chapter 11 case to be compensated from funds of the debtor company if statutory requirements are met and the bankruptcy court approves payment. Reviewing and, where appropriate, objecting to professionals’ applications for fees and expenses is a statutory duty of the USTP. The guidelines explain the criteria that U.S. Trustees use in reviewing and objecting to those applications. They do not supersede statutes, rules or court orders.
The update to the guidelines takes into account the significant changes that have occurred in the legal industry as well as the increasing complexity of business bankruptcy reorganization cases. The guidelines were originally issued in 1996 and are being updated in phases; the first phase, announced today, governs the USTP’s review of fees and expenses requested by attorneys in chapter 11 cases with $50 million or more in assets and $50 million or more in liabilities. Although the guidelines are not subject to the notice and comment process of the Administrative Procedure Act, the USTP nevertheless modified earlier drafts of the guidelines after two public comment periods and a public meeting. 

 “We were pleased by the many helpful suggestions we received as we drafted the guidelines,” said Clifford J. White III, Director of the Executive Office for U.S. Trustees. “The U.S. Trustee Program went to great lengths to solicit public input while developing the updated guidelines, reviewing and incorporating suggestions from academics, attorneys and other participants in the bankruptcy system.”
The guidelines require a showing that the rates charged reflect market rates outside of bankruptcy.

The guidelines also provide for the:

• Use of budgets and staffing plans; • Disclosure of rate increases that occur during the representation; • Use of rates that are based on the attorney’s home office location; • Submission of billing records in an open, searchable electronic format; • Use of independent fee committees and fee examiners; and
• Use of model forms and templates for applications for compensation and expenses.

The updated guidelines apply to attorneys’ fees and expenses in cases filed on or after Nov. 1, 2013, that meet the large case threshold. Until the USTP adopts additional superseding guidelines in the next phases of revisions, the 1996 guidelines will continue in effect for the review of fee applications filed in larger chapter 11 cases by professionals who are not attorneys; in all chapter 11 cases below the large case threshold; and in cases under other chapters of the Bankruptcy Code.

USTP attorneys in districts throughout the country will vigorously enforce the guidelines, defending them in bankruptcy court and through appeals as appropriate. The USTP also will educate bankruptcy attorneys regarding the guidelines and encourage bankruptcy courts to incorporate the guidelines in their local rules of bankruptcy procedure, as many have done with the 1996 guidelines.
The guidelines and explanatory materials are posted at www.justice.gov/ust.

WASHINGTON — The Department of Justice today announced new guidelines for the payment of attorneys’ fees and expenses in large chapter 11 bankruptcy cases in order to enhance disclosure and transparency in the compensation process and to help ensure that attorneys’ fees and expenses are based on market rates. The guidelines, which will go into effect on Nov. 1, 2013, were developed by the U.S. Trustee Program (USTP), the component of the department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.

“The costs of bankruptcy fall on the creditors and employees of the debtor companies,” said Acting Associate Attorney General Tony West. “At a time when both the public and the most sophisticated participants in the bankruptcy process say bankruptcy attorneys’ costs are rising too rapidly, these guidelines are designed to ensure that statutory requirements limiting bankruptcy fees to market rates – not premium rates – are followed.”

The Bankruptcy Code allows professionals who provide services during a chapter 11 case to be compensated from funds of the debtor company if statutory requirements are met and the bankruptcy court approves payment. Reviewing and, where appropriate, objecting to professionals’ applications for fees and expenses is a statutory duty of the USTP. The guidelines explain the criteria that U.S. Trustees use in reviewing and objecting to those applications. They do not supersede statutes, rules or court orders.

The update to the guidelines takes into account the significant changes that have occurred in the legal industry as well as the increasing complexity of business bankruptcy reorganization cases. The guidelines were originally issued in 1996 and are being updated in phases; the first phase, announced today, governs the USTP’s review of fees and expenses requested by attorneys in chapter 11 cases with $50 million or more in assets and $50 million or more in liabilities. Although the guidelines are not subject to the notice and comment process of the Administrative Procedure Act, the USTP nevertheless modified earlier drafts of the guidelines after two public comment periods and a public meeting.

“We were pleased by the many helpful suggestions we received as we drafted the guidelines,” said Clifford J. White III, Director of the Executive Office for U.S. Trustees. “The U.S. Trustee Program went to great lengths to solicit public input while developing the updated guidelines, reviewing and incorporating suggestions from academics, attorneys and other participants in the bankruptcy system.”

The guidelines require a showing that the rates charged reflect market rates outside of bankruptcy. The guidelines also provide for the:

• Use of budgets and staffing plans;
• Disclosure of rate increases that occur during the representation;
• Use of rates that are based on the attorney’s home office location;
• Submission of billing records in an open, searchable electronic format;
• Use of independent fee committees and fee examiners; and
• Use of model forms and templates for applications for compensation and expenses.

The updated guidelines apply to attorneys’ fees and expenses in cases filed on or after Nov. 1, 2013, that meet the large case threshold. Until the USTP adopts additional superseding guidelines in the next phases of revisions, the 1996 guidelines will continue in effect for the review of fee applications filed in larger chapter 11 cases by professionals who are not attorneys; in all chapter 11 cases below the large case threshold; and in cases under other chapters of the Bankruptcy Code.

USTP attorneys in districts throughout the country will vigorously enforce the guidelines, defending them in bankruptcy court and through appeals as appropriate. The USTP also will educate bankruptcy attorneys regarding the guidelines and encourage bankruptcy courts to incorporate the guidelines in their local rules of bankruptcy procedure, as many have done with the 1996 guidelines.

The guidelines and explanatory materials are posted at www.justice.gov/ust.

Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411

To view the Guidelines and other informational material, click here.

The Justice Department announced today that Timothy Lassiter, the former chief deputy of the Hertford County, N.C., Sheriff’s Office, pleaded guilty today in federal court in Elizabeth City, N.C., to violating the civil rights of an inmate during a court appearance. 

According to information presented to the court, on June 12, 2012, the inmate created a verbal disturbance during a court appearance.  After removing the inmate from the courtroom, Lassiter repeatedly and unjustifiably punched the inmate in his face and body at a time when the inmate was handcuffed and posed no threat to law enforcement.  The inmate was injured as a result of the assault. 

“The Civil Rights Division of the Department of Justice works to ensure that no law enforcement officer abuses his power to assault a person in his custody,” said Deputy Assistant Attorney General for Civil Rights Roy L. Austin Jr.  “This assault by a sheriff’s deputy which started in a courtroom – the very place where the constitutional rights of all Americans, including those accused of crimes, are applied and enforced on a daily basis.  This plea demonstrates that the department will vigorously defend the integrity of our legal system.”

U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker stated, “This deputy’s deliberate abuse of authority undermines the efforts of the vast majority of law enforcement officers who honor their oath to uphold the law.”

“Every citizen has the right to expect law enforcement officers to act legally and in accordance with the Constitution.  Former Chief Deputy Timothy Lassiter's actions were inexcusable.  The charges against him should serve as a reminder that no one is above the law,” said John Strong, the Special Agent in Charge of the Charlotte Division of the FBI. 

Lassiter pleaded guilty to one count of deprivation of rights under color of law.  He faces a statutory maximum sentence of 10 years in prison.  A sentencing hearing has been scheduled for Sept. 9, 2013.

This case was investigated by the FBI and prosecuted by Civil Rights Division Trial Attorney Betsy Biffl and Assistant U.S. Attorney for the Eastern District of North Carolina Toby Lathan.