District Not Recorded

 A former U.S. Congressman and a real-estate investor were convicted today by a federal jury in Tucson, Ariz., of conspiring together to extort and bribe individuals seeking a federal land exchange, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney John Leonardo of the District of Arizona and Special Agent in Charge Douglas F. Price of the FBI’s Phoenix Division.

Richard G. Renzi, 55, of Burke, Va., was found guilty of 17 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right, racketeering, money laundering and making false statements to insurance regulators. 

James W. Sandlin, 62, of Sherman, Texas, was found guilty of 13 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right and money laundering.

Sentencing is set before U. S. District Judge David C. Bury on Aug. 19, 2013.

“Former Congressman Renzi’s streak of criminal activity was a betrayal of the public trust and abuse of the political process,” said Acting Assistant Attorney General Raman. “After years of misconduct as a businessman, political candidate and member of Congress, Mr. Renzi now faces the consequences for breaking the laws that he took an oath to support and defend.”

 “Our democracy is undermined whenever our elected officials misuse the power entrusted to them by the voters to serve their own private interests rather than in the service of the public interest,” said U.S. Attorney Leonardo. “The jury’s verdict reinforces the fundamental principle that our society is governed by the rule of law, and that no citizen, including the most influential and powerful among us, is above the law.”

“Today's conviction is a culmination of the investigative efforts of the FBI and IRS-Criminal Investigation over a period of several years,” said FBI Special Agent in Charge Price. “Public corruption is one of the top criminal priorities of the FBI, and it is imperative that elected public officials be held accountable to uphold the public's trust.  The FBI remains committed to this criminal priority in combating public corruption at all levels.”

  According to evidence at trial, Renzi, then a member of Congress from Arizona’s 1st Congressional District, promised in 2005 to use his legislative influence to profit from a federal land exchange that involved property owned by Sandlin, a real-estate investor.

 At the time, Sandlin owed Renzi $700,000 in future payments from their business dealings, and Renzi threatened a proponent of the land exchange that he would not support it unless they purchased Sandlin’s property in Cochise County, Ariz.  When that individual refused, Renzi promised a second proponent of a land exchange that he would support the exchange if they purchased Sandlin’s property.  According to an agreement reached in May 2005, Sandlin was paid $1 million in earnest money, out of which he paid $200,000 to Renzi.  Just before Sandlin received the $1.6 million balance owed on the exchange, he paid an additional $533,000 to Renzi. 

Evidence at trial further showed that from 2001 to 2003, Renzi engaged in insurance fraud by diverting his clients’ insurance premiums to fund his first campaign for Congress, and he provided false statements to various state regulators who were investigating his activities.  

Renzi was indicted in February 2008, and in October 2008, Renzi moved to dismiss the indictment under his rights as a member of Congress under the Speech or Debate Clause. The court denied his motion in February 2010, and Renzi pursued an interlocutory appeal. After Renzi’s appeal was unsuccessful, trial was set for May 2013.

 Honest services wire fraud, extortion under color of official right, concealment money laundering and racketeering each carry maximum penalties of 20 years in prison. Conspiracy carries a maximum penalty of five years in prison, and making false statements to insurance regulators and transactional money laundering each carry maximum penalties of 10 years in prison.

 This case was investigated by the FBI and the Internal Revenue Service – Criminal Investigation.  The prosecution was handled by Trial Attorneys David Harbach and Sean Mulryne of the Department of Justice’s Public Integrity Section and Assistant U.S. Attorneys Gary Restaino and James Knapp of the District of Arizona.

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.

NEW YORK -- Immigration Judge Aviva Poczter 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 June 7, 2013. The New York District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.

Biographical Information

Attorney General Eric Holder appointed Judge Poczter in December 2010. Judge Poczter received a bachelor of arts degree in 1996 from McGill University, Montreal, Quebec, Canada and a juris doctorate degree in 1999 from American University, Washington College of Law. From 2002 to December 2010, she worked for the Department of Justice (DOJ), Office of Immigration Litigation, as a trial attorney from 2002 to 2005, and as a senior litigation counsel from 2005 to December 2010. From 2000 to 2002, she served as an attorney advisor for the DOJ, Executive Office for Immigration Review (EOIR), Board of Immigration Appeals. From 1999 to 2000, she was a judicial law clerk for EOIR’s Boston Immigration Court. Judge Poczter is a member of the State Bar of Massachusetts and the New York State Bar.

- EOIR -

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

Saipan, MP – U.S. Attorney Alicia A.G. Limtiaco announced that on Friday, June 7, 2013, a federal jury convicted CHANG RU MENG BACKMAN (age 40) of the People’s Republic of China, of one count of Sex Trafficking by Force, Fraud or Coercion in violation of 18 U.S.C. §1591, in the District of the Northern Mariana Islands between August 2008 and March 2009. BACKMAN faces a mandatory minimum sentence of fifteen (15) years and a maximum term of life in prison. Sentencing has been scheduled for September 13, 2013, before U.S. District Court Chief Judge Ramona V. Manglona.

This prosecution resulted from an investigation that began in the summer of 2009 by the Federal Bureau of Investigation (FBI). According to the evidence presented at court, BACKMAN, who was the “boss-lady” of the Holiday Karaoke Club, coerced vulnerable Chinese women into having sex with customers of the club, for her own financial benefit. BACKMAN preyed upon women who had been enticed to come to Saipan from China with promises of legitimate work on a farm, hotel or a restaurant. Once the women arrived, BACKMAN used their debt, lack of legal immigration status, and inability to speak English to compel them to engage in commercial sex acts at her business -- the Holiday Karaoke Club. BACKMAN also drove the women to and from the bar so that the women would have sex with men at her direction. Three victims testified at the trial and the jury found BACKMAN guilty of one of three counts of sex trafficking.

The case was investigated by FBI Special Agent Jaime Prida and the United States was represented at trial by Assistant U.S. Attorneys Rami S. Badawy and Ross K. Naughton, and U.S. Attorney Limtiaco. After the trial, U.S. Attorney Limtiaco, stated, “The sexual exploitation of vulnerable individuals is an affront to fundamental human rights, and it cannot be tolerated. Human traffickers trick, lie and coerce victims with promises of work in a legitimate job. In reality, these victims lose their freedom and are horribly demeaned by the sexual acts that they are forced to perform. The defendant preyed on the hopes and dreams of the victims, forcing them into a life of prostitution. The jury's verdict makes clear that sex trafficking schemes will not be tolerated. We will continue to find traffickers and hold them accountable for their crimes."

“This successful prosecution, was brought about through the hard work of the FBI in collaboration with local law enforcement and the CNMI Attorney General’s Office, to combat sex trafficking. This prosecution is the result of the tireless pursuit by law enforcement of those responsible for the sexual exploitation of women, and our joint commitment to attaining justice for the victims of these horrendous crimes.”

A federal jury in Tampa found four former executives of WellCare Health Plans Inc., a health maintenance organization (HMO) operator, guilty of various charges, including health care fraud, making false statements relating to health care matters and making false statements to a law enforcement officer, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Robert E. O’Neill of the Middle District of Florida and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office

Today, former WellCare Chief Executive Officer Todd S. Farha, 45, of Tampa, was convicted of two counts of health care fraud; former WellCare Chief Financial Officer Paul L. Behrens, 51, Odessa, Fla., was convicted of two counts of making false statements relating to health care matters and two counts of health care fraud; William L. Kale, 63, of Oldsmar, Fla., former vice president of Harmony Behavioral Health Inc. (a wholly-owned subsidiary of WellCare), was found guilty of two counts of health care fraud; and Peter E. Clay, 56, of Wellesley, Mass., former WellCare vice president of medical economics, was found guilty of making false statements to a law enforcement officer.

On March 2, 2011, a federal grand jury sitting in Tampa returned an indictment charging Farha, Behrens, Kale and Clay with various federal criminal violations related to a scheme to defraud the Florida Medicaid program, from the summer of 2003 through the fall of 2007, by making false and fraudulent statements relating to expenditure information for behavioral health care services. 

WellCare operates HMOs in several states targeted for government-sponsored health care benefit programs like Medicaid.  Two WellCare HMOs operating in Florida, StayWell and Healthease, contracted with the Agency for Health Care Administration (AHCA), the Florida agency which administers the Medicaid program, to provide Florida Medicaid program recipients with an array of services, including behavioral health services. 

In 2002, Florida enacted a statute that required Florida Medicaid HMOs to expend 80 percent of the Medicaid premium paid for certain behavioral health services upon the provision of those services.  In the event that the HMO expended less than 80 percent of the premium, the difference was required to be returned to AHCA.  As part of the scheme, the defendants falsely and fraudulently submitted inflated expenditure information in the company’s annual reports to AHCA, in order to reduce the WellCare HMOs’ contractual payback obligations for behavioral health care services.

On May 5, 2009, the government filed related charges in an information and deferred prosecution agreement (DPA) against WellCare.  Under that DPA, WellCare was required to pay $40 million in restitution, forfeit another $40 million to the United States and cooperate with the government’s criminal investigation.  The company complied with all of the requirements of the DPA.  As a result, the information was later dismissed by the court following a government motion.

In May 2009, an information and plea agreement for Gregory West, 55, of Tampa, a former WellCare analyst, was unsealed.  In his plea agreement, West admitted to participating in the scheme to defraud the Medicaid program and agreed to cooperate in the government’s investigation.  At trial, West provided extensive and detailed testimony explaining the complex scheme.  Other former WellCare executives provided additional testimony about the four individuals' roles in the scheme.

The maximum penalty for each of the health care fraud counts is 10 years in prison.  The maximum penalty for all other counts is five years in prison. A sentencing date has not yet been set.

Thaddeus M.S. Bereday, of Tampa, WellCare’s former general counsel, was severed from the trial in February of this year.  He will be tried separately, at a later date.  Defendants are presumed innocent until proven guilty in a court of law. 

The jury returned not guilty verdicts with respect to several counts and was unable to reach a verdict on others.  The judge declared a mistrial as to those counts on which the jury was deadlocked.  The Justice Department will decide, at a later date, whether to retry the individuals on those charges.

This case was investigated by HHS-OIG, the FBI and the Florida Attorney General's Medicaid Fraud Control Unit.  It was prosecuted by Senior Litigation Counsel John Michelich of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jay Trezevant and Cherie Krigsman of the Middle District of Florida and Special Assistant U.S. Attorney John Bowers.

David P. Rowley, a resident of Jackson, Michigan, pleaded guilty yesterday before U.S. District Judge Denise Page Hood to filing a false individual income tax return, announced Kathryn Keneally, the Assistant Attorney General for the Justice Department's Tax Division, and Barbara L. McQuade, the U.S. Attorney for the Eastern District of Michigan.

 According to documents filed with the court, between 1999 and 2009, Rowley owned and operated an inventory business for automobile dealerships known as Kennedy Inventory & Service Inc. (KIS).  The business also operated under the names D&P Inventory and Spartan in Ohio Inventory.  At Rowley’s direction, KIS withheld trust fund taxes, which are the employee portion of Federal Insurance Contributions Act taxes, and employee income tax withholding from his own wages as well as from the wages of the approximately 50-100 employees that it employed at any given time during this period.  Also at Rowley’s direction, KIS failed to pay over those trust fund taxes to the Internal Revenue Service (IRS).  In addition, Rowley failed to timely file Employer's Quarterly Federal Tax Returns for KIS for quarters during 1999 through 2006 and Individual Income Tax Returns for himself for tax years 2002 through 2007.

 In March 2008, Rowley filed 32 delinquent employer tax returns for KIS for years 1999 through 2006 in which he falsely stated that the company had paid over its employees’ trust fund taxes to the IRS when it had not.  In November 2008, Rowley filed delinquent individual tax returns for himself for 2002 through 2007.  On those returns, he falsely reported that KIS had withheld income taxes from his wages.  The tax loss to the government from Rowley’s fraud was between $200,000 and $400,000.

 Rowley faces a maximum sentence of three years in prison, one year of supervised release, a $250,000 fine and a $100 special assessment.  He has agreed to pay restitution of $303,433.12 to the IRS.  Sentencing is scheduled for Sept. 5, 2013.
 
The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorney Daren Firestone of the Justice Department's Tax Division is prosecuting the case.

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

Doreen Hendrickson of Commerce Township, Mich., was arrested today following an indictment by a federal grand jury for criminal contempt, the Justice Department and Internal Revenue Service (IRS) announced.

 Hendrickson and her husband, Peter Hendrickson, filed tax returns for 2002 and 2003 on which they claimed more than $20,000 in fraudulent tax refunds. These returns were based on the frivolous argument set forth in Peter Hendrickson’s book, Cracking the Code, that only federal, state and local government employees are liable for the payment of income taxes. In May 2007, as part of a lawsuit against the Hendricksons filed by the department’s Tax Division, U.S. District Judge Nancy G. Edmunds in Detroit entered a permanent injunction that barred the Hendricksons from filing additional false tax returns. Judge Edmunds also ordered the Hendricksons to file amended 2002 and 2003 returns. According to the indictment, Doreen Hendrickson violated this injunction by failing to file amended 2002 and 2003 tax returns and by filing a false 2008 tax return that was based on the arguments in her husband’s book.

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

 This case was investigated and is being prosecuted by Trial Attorneys Melissa S. Siskind and Jeffrey B. Bender of the Tax Division, with the assistance of IRS-Criminal Investigation. 

The Justice Department announced that it has reached an agreement with the North Yuba Water District, a special district in California, that, if approved by the court, will allow for the district to bail out from its status as a “covered jurisdiction” under the special provisions of the Voting Rights Act, and thereby exempt the district from the preclearance requirements of Section 5 of the Voting Rights Act. The district covers part of Yuba County, Calif., which is a jurisdiction subject to Section 5. The agreement is in the form of a consent decree filed today in the U.S. District Court for the District of Columbia.  
 
Under Section 5 of the Voting Rights Act, certain covered jurisdictions, determined according to Section 4 of the act, are required to seek preclearance for any changes in voting qualifications, standards, practices or procedures from the U.S. District Court for the District of Columbia, or from the U.S. Attorney General, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bail out,” or remove itself from such coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in U.S. District Court for the District of Columbia. A bailout judgment can be issued only if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the Attorney General can consent to entry of a judgment of bailout only if, based upon investigation, the Attorney General is satisfied that the jurisdiction meets the eligibility requirements.
 
The North Yuba Water District filed its bailout action in the U.S. District Court for the District of Columbia on March 29, 2013. District officials had contacted the Attorney General prior to filing its action, indicating that the district was interested in seeking a bailout. The district provided the department with substantial information, and the department conducted an investigation to determine the district’s eligibility. Based on that investigation, the department is satisfied that the district meets the Voting Rights Act’s requirements for bailout.  
 
“In this case, the department carefully evaluated the information provided by the district, and conducted its own investigation, which has satisfied us that the district is eligible for bailout,” said Matthew Colangelo, Deputy Assistant Attorney General for the Civil Rights Division.  “We appreciate the district’s cooperation in the resolution of this matter.”

The consent decree details the legal and factual basis for a bailout determination and, if approved, will grant the district’s request. The court will retain jurisdiction of the action for 10 years and can reopen the action upon the motion of the Attorney General or any aggrieved person alleging conduct by the district that would have originally precluded the district from bailing out if it had occurred during the 10 year period preceding entry of the consent decree.  
 
Information about bailout, the Voting Rights Act, and other federal voting laws is available on the Justice Department website at www.justice.gov/crt/voting. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

The Justice Department today unveiled a plan calling for sweeping changes to advance crime victims’ rights and services in the 21st century.
 
Developed by the Office of Justice Programs (OJP) and Office for Victims of Crime (OVC), Vision 21: Transforming Victim Services Final Report, is the first collective examination in 15 years of current U.S. practices, funding and outreach in the crime victims’ field.
 
“Today’s announcement marks the latest step forward in the Department’s ongoing work to protect and empower those who have been victimized,” said Attorney General Eric Holder.  “Through Vision 21, we’ve gained an unprecedented understanding of the current state of victim services from coast to coast. And we've developed groundbreaking strategies for responding to urgent needs, combating violence and abuse, and providing critical support to crime victims.”
 
Vision 21 documents the need to better understand who is affected by crime, how they are affected, how they seek help, who reports victimization and the reasons why some victims do not.  The report calls for continuous, rather than episodic, strategic planning in the victim assistance field and for statutory, policy and programmatic flexibility to address enduring and emerging crime victim issues.  It also calls for the development of evidence-based knowledge founded on data collection and analysis of victimization and emerging victimization trends, services, behaviors and enforcement efforts.
 
“This is a bold and creative plan to meet the needs of crime victims in the 21st century,” said Assistant Attorney General for OJP Karol V. Mason. “The recommendations in this report display the latest and best thinking in the field of victim services and set us on a course to ensuring services for all victims.  I am grateful to my Principal Deputy Assistant Attorney General Mary Lou Leary and OVC’s Principal Deputy Director Joye Frost for leading Vision 21 and for their commitment to victims across the country.”
 
Leary and Frost previously joined Patrick Leahy, President Pro Tempore of the U.S. Senate, on April 24, to announce the framework for this report. For the Vision 21: Transforming Victim Services Final Report, please visit: www.ovc.gov/vision21.

The Office of Justice Programs, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. For more information about OJP, please visit: www.ojp.gov.

A former member of the U.S. Army National Guard was sentenced today to serve 57 months in prison for leading a conspiracy to obtain approximately $244,000 in fraudulent recruiting referral bonuses from various U.S. military components and their contractor, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

Former U.S. Army National Guard Specialist Xavier Aves, 42, of San Antonio, was sentenced by Chief U.S. District Judge Fred Biery in the Western District of Texas.  In addition to his prison term, Chief Judge Biery sentenced Aves to serve three years of supervised release and ordered Aves to pay $244,000 in restitution, jointly and severally with co-conspirators.

On Sept. 16, 2011, a grand jury in the Western District of Texas returned a 41-count indictment against Aves and five co-defendants, in which Aves was charged with one count of conspiracy to commit wire fraud, 30 counts of wire fraud and 10 counts of aggravated identity theft.

On Feb. 3, 2012, Aves pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft.

The case against Aves and his co-defendants arose from an investigation concerning allegations that former and current soldiers and military and civilian contract recruiters in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting referral bonuses.  To date, 11 individuals have been charged, 10 of whom have pleaded guilty and been sentenced.  The investigation is ongoing.

According to court documents, between 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. to administer recruiting bonus programs designed to offer monetary incentives to soldiers who referred others to serve in the U.S. military.  In addition, the Army managed its own recruiting bonus programs, which offered referral bonuses to soldiers who referred other individuals to serve in the Army or Army Reserves after registering online as recruiting assistants (RA) or sponsors.

Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person he referred to join the U.S. military.  Based on certain milestones achieved by the referred soldier, a participating soldier would receive the recruiting bonus payments in the form of direct deposits and pre-paid debit card payments.

According to court documents, between February 2006 and February 2011, Xavier Aves, Christopher Castro, Grant Bibb, Paul Escobar, Richard Garcia, Ernest Gonzales and others paid military recruiters, including Jesus Torres-Alvarez, for the names and social security numbers of potential soldiers.  Aves, Castro, Bibb, Escobar, Garcia, Gonzales and others used the information they obtained from recruiters to claim credit in their online RA and sponsor accounts for referring certain new soldiers to join the military, when in fact they did not refer those individuals. 

Aves orchestrated the scheme by serving as a key intermediary between the recruiters and the participating RAs.  Aves arranged for the money to be split among his co-conspirators and directed a portion of the proceeds to be wired to his and his girlfriend’s personal bank accounts.

As a result of the fraudulent referrals, Aves and his co-conspirators received a total of approximately $244,000 in fraudulent recruiting bonuses. 

The case is being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter, Mark J. Cipolletti and Sean F. Mulryne of the Criminal Division’s Public Integrity Section.  The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Division.

Two federal judges in separate cases entered orders permanently barring Marvin Binion Sr., his son Marvin Binion II, Binion Sr.’s ex-wife Tonya Hubbard and her firm Universal Tax Service LLC from preparing tax returns for others, the Justice Department announced today.  The civil injunction orders, to which all defendants consented, were signed by Judge Roger W. Titus and Judge Alexander Williams Jr., of the U.S. District Court for the District of Maryland.
 
 The two government complaints, one against the Binions and one against Hubbard and her firm, alleged that the defendants prepared fraudulent tax returns for customers containing bogus deductions for items like charitable contributions, unreimbursed employee business expenses and other miscellaneous expenses.  The lawsuits also alleged that Hubbard, Universal Tax Service LLC and the Binions violated federal law by not signing the returns they prepared for customers and by not placing IRS preparer identification numbers on the returns.  All tax preparers are required to place an IRS-issued tax preparer identification number on every federal income tax return they prepare for a customer.

According to the complaints the defendants prepared customer returns using commercial tax software, placed the returns in postage-paid pre-addressed envelopes and instructed customers to sign and mail the returns to the IRS on their own.  The suits alleged that defendants did this to hide from the IRS their role in preparing the returns.

The government alleged that Hubbard and the Binions charged customers a return-preparation fee of $300 and that the Binions may have earned as much as $30,000 per day preparing fraudulent returns.

 The Internal Revenue Service has listed tax-preparer fraud as one of the “Dirty Dozen” tax scams.  The Justice Department has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters in the past 10 years. Information about these cases is available on the Justice Department’s website www.justice.gov/tax.

Related Materials:

United States v. Marvin L. Binion, Sr., et al.
Final Stipulated Permanent Injunction Order (PDF)

United States v. Tonya L. Hubbard, et al.
Final Stipulated Permanent Injunction Order (PDF)

The U.S. District Court for the Eastern District of Michigan has issued an order permanently barring Nataki Davis, (formerly known as Nataki Barnes), a Southfield, Mich., tax preparer, from preparing federal tax returns for others for a period of five years, the Justice Department announced today.  The court also ordered Davis to mail copies of the court order to all persons or entities for whom she has prepared federal tax returns, amended returns or other federal tax documents or forms since Jan. 1, 2011.  Davis consented to the civil injunction order.

Davis operated a business that provided tax return preparation services under the names NKB Tax Services, NKB Tax Services, Etc. and Ready Trans.  The complaint states that Davis prepared approximately 1,597 tax returns for tax processing years 2010 through 2012.  The Internal Revenue Service (IRS) closed examinations on 52 of those 1,597 tax returns prepared by Davis and 48, or 92%, of those examined returns resulted in additional tax assessments.  Many of the returns that Davis prepared for customers contained false deductions and credits, including inflation of deductions for charitable contributions, mortgage interest, real estate and personal property taxes paid and false education credits. Returns also included manipulation of taxpayer data for the purposes of claiming the Earned Income Tax Credit for which the taxpayers would otherwise be ineligible.

The court also issued an order permanently barring Davis’s brother Clarence Barnes Jr. from applying for an electronic filing identification number (EFIN) or assisting any other individual or entity in the application for or procurement or use of an EFIN to file a federal income tax return.  Barnes consented to this civil injunction order.

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

Related Materials:

United States v. Nataki Davis, et al.
Complaint for Permanent Injunction (PDF)
Order of Injunction with Respect to Defendant Clarence Barnes, Jr. (PDF)
Order of Injunction with Respect to Defendants Nataki Davis and NKB Tax Services, Inc. (PDF)

A former employee at the Marine Corps Logistics Base Albany (MCLB-Albany) and two local businessmen were sentenced today for their roles in a bribery scheme related to the award of contracts for machine products that resulted in approximately $907,000 in fraudulent overcharges to the U.S. Marines, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.

Michelle Rodriguez, 32; Thomas J. Cole, 43; and Fredrick W. Simon, 55, all of Albany, Ga., were sentenced today by U.S. District Judge W. Louis Sands in the Middle District of Georgia.  Rodriguez was sentenced to 70 months in prison and ordered to pay $161,000 in restitution; Cole was sentenced to 46 months in prison and ordered to pay $209,000 in restitution; and Simon was sentenced to 32 months in prison and ordered to pay $74,500 in restitution.  Each is also subject to a $907,000 restitution order and three years of supervised release.

During her guilty plea in February 2013, Rodriguez, a supply technician in the Maintenance Center Albany (MCA), admitted to participating in a scheme to award contracts for machine products to Company A and Company B, companies operated by Cole and Simon. Cole and Simon pleaded guilty to bribery charges related to the same scheme in January 2013 and cooperated with the government’s criminal investigation.  The MCA is responsible for rebuilding and repairing ground combat and combat support equipment, much of which has been utilized in military missions in Afghanistan and Iraq, as well as other parts of the world.  To accomplish the scheme, Rodriguez would transmit bid solicitations to Simon via facsimile or email, and then usually follow that communication with a text message specifying how much Company A should bid.  Simon, on Company A’s behalf, and with Cole’s knowledge, bid the amount specified by Rodriguez on each order, which was normally in excess of fair market value.  Rodriguez was then paid $75 in cash for each order awarded to Simon and Cole during the previous week.  According to court records, during the relevant period Rodriguez awarded Cole and Simon’s companies nearly 1,300 machine product orders, all of which were in exchange for bribes paid to Rodriguez.

Rodriguez further admitted that in 2011, she began routing some orders through a second company, Company B, owned by Cole, because the volume of orders MCA placed with the first company was so high. Company A, however, continued to perform the required services. Court records state that Rodriguez received approximately $161,000 in bribes during the nearly two-year scheme, while Cole and Simon personally received $209,000 and $74,500, respectively.  Court records also indicate that the total loss to the U.S. Marines from overcharges associated with the machine product orders placed during the scheme was approximately $907,000. 

The case was investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit and the Defense Criminal Investigative Service.  The case was prosecuted by Trial Attorneys Richard B. Evans and J.P. Cooney of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia. 

The Justice Department announced today that a number of related entities and individuals agreed to pay $2,883,947 to resolve allegations that they falsely claimed disadvantaged business status on a number of federally-funded transportation projects.  These entities are Dayton-based TesTech, Inc. and its owner, Sherif Aziz, and Dayton-based CESO Testing Technology, Inc., CESO International, LLC, and CESO, Inc. (collectively CESO), and their owners, David and Shery Oakes. 

“The Disadvantaged Business Enterprises program helps businesses owned by minorities and women work on federal transportation projects,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice.  “Those who falsely claim credits under the program to obtain federal funds victimize both the businesses that the program is designed to assist and the American taxpayer.”

The Department of Transportation’s Disadvantaged Business Enterprise (DBE) program encourages the use of woman- and minority-owned businesses on federally-funded transportation projects.  Contractors on such projects must make good-faith attempts to meet DBE participation goals as a condition of federal funding. 

"DBE fraud harms the integrity of the program and adversely impacts law-abiding, small business contractors trying to compete on a level playing field,” said Michelle McVicker, regional Special Agent-in-Charge of the DOT’s Office of Inspector General. “Working with our Federal, State, and local law enforcement and prosecutorial colleagues, we will vigorously pursue those who violate the law, and expose and shut down fraud schemes that adversely affect public trust and DOT-assisted airport and highway programs.”

The settlement announced today resolves allegations that the defendants claimed DBE status for TesTech, a civil engineering firm, on numerous highway and airport construction projects in Ohio, Indiana, Michigan, and Kentucky.  The United States alleged that TesTech was owned and controlled by CESO, a non-DBE firm, and its owners, the Oakes, who falsely claimed that TesTech was owned by Aziz and qualified as a minority-owned business in order to take advantage of the DBE program. 

"The message is that we will work to uphold the integrity of the Disadvantaged Business Enterprise (DBE) and similar programs," US Attorney Carter Stewart said.  “Those who attempt to defraud the system will be held accountable.”

The allegations resolved by today’s settlement were initially alleged in a whistleblower lawsuit filed under the False Claims Act by Ryan Parker, a former employee of TesTech.  Under the False Claims Act, private citizens can sue on behalf of the United States and share in the recovery.  Mr. Parker will receive $562,370 of the settlement amount. 

This case was handled by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Southern District of Ohio, and the Department of Transportation Office of Inspector General.

The False Claims Act suit was filed in the United States District Court for the Southern District of Ohio, and is captioned United States ex rel. Parker v. TesTech et al., No. 2:10-cv-1028 (S.D. Ohio).  The claims settled in this case are allegations only; there has been no determination of liability.

Steven Patrick Garcia, Jr., 36, of San Jose, Calif., was sentenced today in federal court in Billings, Mont., to 24 months in prison to be followed by one year of supervised release for selling and offering to sell migratory bird parts in violation of the Migratory Bird Treaty Act (MBTA) and the Lacey Act, the Department of Justice announced today.  Garcia had pleaded guilty to the charge on January 16, 2013. 

Garcia admitted by his plea that on Dec. 2, 2008, he offered for sale and sold golden eagle and hawk feathers and that on Feb. 25, 2009, he sold golden eagle feathers knowing that those golden eagle feathers were unlawfully taken and possessed. 

“The protection of Montana's wildlife, including migratory birds, is a priority of the U.S. Attorney's Office for the District of Montana.  Today's prosecution and sentence demonstrate that individuals that attempt to profit from the unlawful taking of golden eagles, bald eagles, hawks and all other migratory birds will be investigated, prosecuted and punished accordingly,” said U.S. Attorney for the District of Montana, Michael W. Cotter.

Pursuant to the MBTA, the Secretary of the Interior maintains a list of migratory birds which are protected from, among other things, being killed, sold, bartered, transported or possessed, except as otherwise permitted by federal regulation.  Enrolled members of federally recognized American Indian tribes may obtain permits to possess eagle and other migratory bird feathers and parts for religious and ceremonial purposes, but federal law strictly prohibits the sale of migratory birds, feathers, or their parts by any person.  The Lacey Act prohibits, among other things, the sale of wildlife knowing that the wildlife was taken or possessed in violation of any federal wildlife-related regulation or law. 

 According to court documents, Garcia communicated via MySpace with an individual in California and sold the individual hawk feathers for $200 and a golden eagle feather for $25 in December 2008.  The hawk feathers were later forensically identified as twelve tail feathers of either ferruginous or red-tailed hawk.  Garcia also communicated via MySpace with an undercover U.S. Fish and Wildlife Service agent who, at one point in time, observed approximately seventy photographs of migratory bird feathers on Garcia’s MySpace Page.  The agent purchased twelve ferruginous hawk and twelve rough-legged hawk tail feathers from Garcia in February 2009 as well as one complete set of subadult golden eagle wings for $400.  Approximately 146 items containing feathers representing 18 different species of migratory birds were obtained from Garcia’s home in Lame Deer, Montana in March 2009.  
 
This case resulted from a nationwide investigation by the U.S. Fish and Wildlife Service’s Office of Law Enforcement into the illegal commercialization of eagles and other migratory birds protected by federal law.  The case was prosecuted by the Department of Justice’s Environment and Natural Resources Division, Environmental Crimes Section with assistance from the U.S. Attorney’s Office for the District of Montana.

Lansing-area resident Dr. Paul Kelly was sentenced to 18 months in prison today for his role in a $13.8 million Medicare fraud scheme.

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

Kelly, 76, was sentenced by U.S. District Judge Gerald E. Rosen of the Eastern District of Michigan.  In addition to his prison term, Dr. Kelly was sentenced to three years of supervised release and ordered to pay $582,912 in restitution. 

Kelly pleaded guilty on Jan. 10, 2013, to one count of health care fraud.  According to information contained in plea documents, beginning in or around January 2011 and continuing through approximately March 2011, Kelly signed home health care referrals for a home health agency called Moonlite Home Care Inc., located in Livonia, Mich. Kelly certified Medicare beneficiaries as homebound, a requirement for receiving home health care, when in fact, Kelly had never examined or met the beneficiaries, and they were not homebound. Medicare paid approximately $582,912 for fraudulent home health care claims submitted by Moonlite based on Kelly's referrals.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section.  

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

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

Under a settlement with the U.S. Department of Justice and the U.S Environmental Protection Agency (EPA) announced today, Miami-Dade County in Florida has agreed to invest in major upgrades to its wastewater treatment plants and wastewater collection and transmission systems in order to eliminate sanitary sewer overflows. The state of Florida and the Florida Department of Environmental Protection (FDEP) are co-plaintiffs with the United States in this action.

Under the terms of the consent decree, Miami-Dade will rehabilitate its wastewater treatment plants and its wastewater collection and transmission system within 15 years. The county will also develop and implement management operation and maintenance programs to help ensure the sewer system is properly operated and maintained in the future. By implementing these measures, Miami-Dade is expected to eliminate sanitary sewer overflows from its wastewater collection and transmission system and achieve compliance with its National Pollutant Discharge Elimination System (NPDES) permits.

“Sewage overflows are a significant problem in the Southeast because of inadequate and aging infrastructure,” said Stan Meiburg, Acting Regional Administrator of EPA’s Southeastern office. “This agreement demonstrates the county’s commitment to address its sewage problems. Eliminating overflows of raw sewage will comply with the Clean Water Act and benefit the Miami-Dade community by providing a cleaner and healthier environment.”

“Miami-Dade County is one of the world’s premier resort destinations and is home to America’s Everglades, two aquatic preserves as well as Bill Baggs Cape Florida, Oleta River and The Barnacle Historic state parks,” said Florida Department of Environmental Protection Secretary Herschel T. Vinyard Jr. “This agreement will bring lasting  environmental and recreational benefits to the citizens and visitors of Miami-Dade County by reducing the threats posed by untreated sewage overflows that degrade water quality and contribute to beach closures,”

Between January 2007 and May 2013, Miami-Dade reported 211 sanitary sewer overflows totaling more than 51 million gallons. Such overflows included a number of large volume overflows from ruptured force mains. At least 84 overflows, totaling over 29 million gallons of raw sewage, reached navigable waters of the United States. Miami-Dade’s Central District wastewater treatment plant (WWTP) also experienced several violations of the effluent limits contained in its NPDES permit. EPA also documented numerous operation and maintenance violations at this same WWTP during inspections in September 2011, April 2012 and April 2013.

Miami-Dade estimates it will spend approximately $1.6 billion to complete the upgrades required by the consent decree and come into compliance with the Clean Water Act. Under the settlement, Miami-Dade will also pay a civil penalty of $978,100 ($511,800 to be paid to the United States and $466,300 to FDEP) and complete a supplemental environmental project costing $2,047,200.

Miami-Dade’s supplemental environmental project involves the installation of approximately 7,660 linear feet of gravity sewer mains through the Green Technology Corridor, an area that is currently using septic tanks. Businesses in the area have been unable to connect to the sewer system because sewer lines are lacking. Disconnecting industrial users from septic tanks will improve water quality in the Biscayne aquifer and nearby surface waters and prevent future contamination.

The terms and conditions of the settlement announced today will update, replace and supersede two existing consent decrees between the United States and the county, the 1994 First Partial Consent Decree and the 1995 Second and Final Partial Consent Decree. Both of these existing consent decrees will be terminated upon entry of the new, proposed consent decree. The parties to this settlement recognized that since entry of the previous consent decrees, conditions within and circumstances surrounding Miami-Dade’s sewer system have changed over the last 18 years, including the causes and locations of sanitary sewer overflows. As a result, appropriate modifications and updates to the previous settlements are included in the new settlement. 

Today’s announcement is the latest in a series of Clean Water Act settlements, including sanitary sewer overflow remediation and combined sewer overflow control plans that will reduce the discharge of raw sewage and contaminated stormwater into U.S. rivers, streams and lakes. It is part of EPA’s national enforcement initiative to keep raw sewage and contaminated stormwater out of the nation’s waterways. Reductions in sanitary sewer overflows are accomplished by obtaining municipal utilities’ commitments to implement timely, affordable solutions to these problems.

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

More information about EPA’s national enforcement initiative: http://www.epa.gov/compliance/data/planning/initiatives/2011sewagestormwater.html

The Justice Department announced that it has reached an agreement with the Linda County Water District, a special district in California, that, if approved by the court, will allow for the district to bail out from its status as a “covered jurisdiction” under the special provisions of the Voting Rights Act, and thereby exempt the district from the preclearance requirements of Section 5 of the Voting Rights Act. The district covers part of Yuba County, Calif., which is a jurisdiction subject to Section 5. The agreement is in the form of a consent decree filed today in the U.S. District Court for the District of Columbia.  
 
Under Section 5 of the Voting Rights Act, certain covered jurisdictions, determined according to Section 4 of the act, are required to seek preclearance for any changes in voting qualifications, standards, practices or procedures from the U.S. District Court for the District of Columbia, or from the U.S. Attorney General, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bail out,” or remove itself from such coverage, and become exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in U.S. District Court for the District of Columbia. A bailout judgment can be issued only if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the Attorney General can consent to entry of a judgment of bailout only if, based upon investigation, the Attorney General is satisfied that the jurisdiction meets the eligibility requirements.
 
The Linda County Water District filed its bailout action in the U.S. District Court for the District of Columbia on March 21, 2013. District officials had contacted the Attorney General prior to filing its action, indicating that the district was interested in seeking a bailout. The district provided the department with substantial information and the department conducted an investigation to determine the district’s eligibility. Based on that investigation the department is satisfied that the district meets the Voting Rights Act’s requirements for bailout.  
 
“In this case, the department carefully evaluated the information provided by the district, and conducted its own investigation, which has satisfied us that the district is eligible for bailout,” said Matthew Colangelo, Deputy Assistant Attorney General for the Civil Rights Division.  “We appreciate the district’s cooperation in the resolution of this matter.”

The consent decree details the legal and factual basis for a bailout determination and, if approved, will grant the district’s request. The court will retain jurisdiction of the action for 10 years and can reopen the action upon the motion of the Attorney General or any aggrieved person alleging conduct by the district that would have originally precluded the district from bailing out if it had occurred during the 10 year period preceding entry of the consent decree.  
 
Information about bailout, the Voting Rights Act, and other federal voting laws is available on the department’s website at www.justice.gov/crt/voting. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

A federal court in Miami has permanently barred Osvaldo J. Diaz of Coral Gables, Florida, from preparing federal tax returns for others, the Justice Department announced today. The permanent injunction order was signed by Judge Jose E. Martinez of the U.S. District Court for the Southern District of Florida.
  
 The government’s complaint alleged that Diaz prepared tax returns that fabricated deductions and credits in an attempt to understate his customers’ tax liabilities or inflate his customers’ refunds. Specifically, the government alleged that Diaz fabricated business and personal expenses and inflated real estate losses for his customers. According to the complaint, the Internal Revenue Service examined 250 returns prepared by Diaz and found that 93 percent resulted in additional taxes being owed. The government alleged that the tax loss from the returns prepared by Diaz could be tens of millions of dollars.

 The IRS lists return-preparer fraud as one of the Dirty Dozen Tax Scams for 2013. In the past decade, the Justice Department's Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website.

The U.S. District Court for the Eastern District of Louisiana has mandated systemic reform of unconstitutional conditions at the Orleans Parish Prison (OPP), by entering the proposed consent judgment executed by the United States, class plaintiffs, and Sheriff Marlin Gusman in Jones v. Gusman. The agreement was filed with the court by the parties on Dec. 11, 2012.

The consent judgment requires the sheriff to undertake comprehensive remedial measures to address the deficiencies in prisoner safety from physical and sexual assaults, medical and mental health care, suicide prevention, environmental and life safety and limited English proficiency services for Spanish-speaking prisoners. 

 The Justice Department initiated a comprehensive investigation in February 2008, under the Civil Rights of Institutionalized Persons Act, with the assistance of experts in the fields of corrections, correctional medical and mental health care and environmental safety and sanitation.  The department issued comprehensive findings regarding its investigation in Sept. 2009, with an emergency update to its findings in April 2012 after conditions had not improved, and in some instances had deteriorated.  In September 2012, the department intervened in the Jones case, a class action lawsuit filed by the Southern Poverty Law Center on behalf of current and future prisoners.

Today’s consent judgment requires:

• Development and implementation of policies, procedures and training regarding all aspects of correctional management, including use of force, investigations of serious incidents, prevention of prison rape and contraband prevention and detection; • The appointment of a professional jail administrator and other key accountability measures; • Tracking of facility data to determine where in the facility dangerous incidents are happening and what can be done to prevent further incidents; • Adequate staffing to ensure that prisoners are safe and tha staff can perform their duties without unreasonable risk of injury;

• Provision of adequate medical and mental health care, including access to necessary medications and treatment, as well as appropriate supervision and intervention for individuals who are or become suicidal; • Improvements in sanitation and fire safety; • Ensuring that Spanish-speaking inmates with limited English proficiency have access to Spanish language translations to enable them to access medical and other basic services; • Appointment of an independent monitor with expertise in the areas covered by this agreement. 

In addition to monitoring of agreement implementation, the independent monitor will periodically inspect the facility for compliance and provide technical assistance to OPP staff regarding how to achieve compliance.

These requirements apply as long as inmates are in the current OPP facilities and will remain in place when the new jail facility is completed and put into use.

The court found that these remedies are fair, adequate, reasonable and minimally necessary to bring OPP conditions up to federal constitutional and statutory requirements.  Additionally, state law-mandated city funding of OPP operations must be adequate to support the ordered remedies.

“The Justice Department is eager to move forward with proactive solutions to the inhumane conditions that have plagued the Orleans Parish Prison,” said Roy L. Austin, Jr. Deputy Assistant Attorney General for the Civil Rights Division.  “The court’s order today is another step in our ongoing efforts in the City of New Orleans to promote public safety through a contemporary criminal justice system that meets constitutional standards.  We look forward to working with all the necessary parties to see to it that this goal is achieved.”

The City of New Orleans was joined by the sheriff as defendant to this case on the sole question of the level of funding the city must provide.  The funding dispute between the city and the sheriff is not resolved by this order.

In a hearing on Aug. 5, 2013, the court will determine the appropriate level and allocation of responsibility for OPP funding under the consent judgment between the sheriff and city, who are both defendants in Jones.

This investigation was led by the Special Litigation Section of the Civil Rights Division.  For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt .  

WASHINGTON – The U.S. Trustee Program (USTP) announced today that the independent auditor appointed under a nationwide settlement between the USTP and Capital One Bank (USA) N.A. has filed her final report, bringing the settlement to a successful conclusion. The auditor reported that Capital One refunded approximately $2.35 million it received after filing erroneous claims in bankruptcy cases for debts previously discharged in bankruptcy, as well as approximately $30,000 in fees and expenses incurred by consumers and bankruptcy trustees who objected to erroneous claims. The report also confirmed that Capital One corrected the flawed process that led to the filing of the erroneous claims.

As part of the settlement filed in 2008 in the U.S. Bankruptcy Court for the District of Massachusetts, Capital One had agreed to an audit overseen by an independent auditor. Former Bankruptcy Judge Melanie Cyganowski, who was selected as the auditor, filed her final report after examining more than 850,000 claims filed by Capital One in bankruptcy cases nationwide. Under the settlement, Capital One paid the auditor’s fees and costs of conducting the audit.

“The auditor’s final report shows how important it is for the USTP to address systemic wrongful conduct with enforcement actions that protect consumers nationwide and that ensure independent verification and monitoring,” stated Executive Office for U.S. Trustees Director Cliff White. “This settlement agreement achieved its objectives and serves as a model for remediating past misconduct and preventing future abuses by creditors and others, including professionals, against consumers and the bankruptcy system. I commend the auditor for her painstaking efforts to identify all victims and to ensure that Capital One has established a system to prevent this from happening again.”

The auditor’s final report revealed that, in the nearly four years prior to the settlement, Capital One filed more than 15,500 erroneous claims with a total face value of nearly $25 million. The auditor also determined that Capital One received payment of approximately $2.35 million on those erroneously filed claims – almost seven times the $340,000 originally alleged – and fully refunded those distributions to consumers in bankruptcy or to their bankruptcy estates. Further, the report confirmed that Capital One reimbursed approximately $30,000 in fees and expenses incurred by debtors and trustees in objecting to erroneous claims.

Under the settlement, the auditor conducted additional compliance audits of all claims filed by Capital One during the two-year period following the settlement to ensure that the company had corrected the process that led to the filing of the erroneous claims for previously discharged debt. The auditor determined that, in the two years following the settlement, Capital One filed fewer than 150 erroneous claims out of more than 250,000 claims filed.

The case is United States Trustee v. Capital One Bank (USA), N.A., Adversary Proceeding No. 08-01272 (Bankr. D. Mass.).

The USTP is the component of the Department of Justice that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.

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

The president of a Louisiana towing company pleaded guilty today to using his personal and business accounts to fund campaign contribution checks in the names of others in support of two candidates for the U.S. Senate, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Dana Boente announced.

Arlen “Benny” Cenac Jr., 57, a resident of Houma, La., and the president and owner of Cenac Towing, pleaded guilty today to making false statements to the Federal Elections Commission (FEC). He faces a maximum penalty of five years in prison when he is sentenced on Sept. 5, 2013, before U.S. District Judge Carl Barbier. 

“Today’s plea marks the second campaign finance conviction in a week and is one of many such cases brought throughout the nation,” said Acting Assistant Attorney General Raman. “Mr. Cenac’s crime undermined the cornerstones of campaign finance laws, and his conviction demonstrates our resolve to hold accountable anyone who corrupts our electoral process.”

“Mr. Cenac, in an effort to increase his political contributions, structured his financial transactions and created false documents,” said U.S. Attorney Boente.  “This prosecution should serve as a warning to people who attempt to hide their identity and make contributions in excess of legal limits.”

According to the plea documents, Cenac obtained cashier’s checks using his personal and corporate funds in names of individuals other than himself, including people he knew professionally, personally, or through family relations.  Cenac neither sought nor obtained the permission of the individuals he listed as remitters on the cashier’s checks.  He then submitted the checks as campaign contributions to the campaigns of two U.S. Senate candidates, causing the campaigns to submit materially false information regarding the source and the amount of the contributions to the FEC.

The case was investigated by the FBI’s New Orleans Division. Trial Attorney Tracee Plowell of the Public Integrity Section and Assistant U.S. Attorney Daniel Friel of the Eastern District of Louisiana are prosecuting the case on behalf of the United States. 

The Justice Department announced today that it has reached a settlement with SuperShuttle, a shared-ride transportation company based in Arizona, to resolve a complaint that it discriminated against a blind person who uses a service animal.  Specifically, the Justice Department determined that SuperShuttle violated the Americans with Disabilities Act (ADA) by forcing a blind person who uses a service animal and her party to ride in a separate van and charging them a higher rate than other individuals who are allowed to share a van and pay a reduced fare. 

“Americans with disabilities are entitled to the same opportunities that others have and the Department of Justice is committed to ensuring that people with disabilities are treated equally,” said Eve L. Hill, Senior Counselor to the Assistant Attorney General for the Civil Rights Division.  “We are pleased that SuperShuttle has committed to taking affirmative steps to remedy this situation throughout its company.”

Under the terms of the settlement agreement, SuperShuttle will adopt a revised service animal non-discrimination policy; train all employees, franchisees and independent contractors on the requirements of the ADA; and pay $1,000 in damages to the complainant.

The ADA prohibits discrimination against people with disabilities by private transportation providers.  Among other things, transportation providers must allow people with disabilities the full and equal enjoyment of their goods, services and facilities.  They must also make reasonable modifications of their policies, practices and procedures to permit service animals by people with disabilities. 
 
Those interested in learning more about this settlement or an entity’s obligations under the ADA may call the Justice Department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access its ADA website at www.ADA.gov .  Additionally, ADA complaints may be filed by email to ADA.Complaint@usdoj.gov .

Related Materials:

Settlement Agreement

The owner of a window installation company located in Mt.Laurel, N.J. admitted today he converted to cash millions of dollars in the company’s gross receipts and used the money to pay his workers without withholding employment taxes announced, Paul J. Fishman, U.S. Attorney for the District of New Jersey, and Kathryn Keneally, Assistant Attorney General for the Tax Division.

Fred Marcus, 39, of Camden County, N.J., the owner and operator of Vortex Installations Inc., pleaded guilty before U.S. District Judge Mary L. Cooper in New Jersey federal court to an information charging him with one count of tax evasion.

According to documents filed in this case and statements made in court:

From early 2006 through the end of 2009, Marcus cashed approximately $2.8 million in Vortex Installations’ gross receipts at a check casher. Marcus used $1,025,868 of that money to pay cash wages to his workers, which he did not report to the Internal Revenue Service (IRS) and from which he did not withhold employment taxes. From 2006 through 2008, Marcus failed to file IRS Forms 941 – Employer’s Quarterly Federal Tax Returns – in which he was required to report the wages paid to his employees. In 2009, Marcus filed false Forms 941, in that he failed to report the cash wages that he paid to Vortex employees.

On the count of tax evasion, Marcus faces a maximum potential penalty of five years in prison and a fine of $250,000, along with restitution to the IRS. Sentencing is scheduled for Sept. 19, 2013. 

Assistant Attorney General Keneally and U.S. Attorney Fishman credited special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea. 

The government is represented by Tax Division Trial Attorney Tino M. Lisella. Additional information about the Tax Division and its enforcement efforts may be found at: www.justice.gov/tax.

Ashraf Hassan-Gouda, a former resident of Mays Landing, N.J., was sentenced today in U.S. District Court for the District of New Jersey to 541 days in prison, the Justice Department and the Internal Revenue Service (IRS) announced today.  The approximately 18 month sentence is for time served.  Previously, Hassan-Gouda had pleaded guilty to willfully assisting in the preparation of a false federal individual income tax return for a client.

According to court documents, in 2003, Hassan-Gouda was the owner of Tax World, a tax preparation business located in Atlantic City, N.J.  He prepared the false tax return for the client at his business.  Hassan-Gouda was indicted in 2007 and fled to Egypt.  In 2012, Hassan-Gouda was extradited to the United States from Germany.
 
The case was investigated by IRS-Criminal Investigation, and prosecuted by Tax Division Trial Attorneys Yael Epstein, Thomas Voracek and Shawn Noud.

Attorney General Eric Holder today welcomed Karol V. Mason as the Department of Justice’s (DOJ) Assistant Attorney General for the Office of Justice Programs (OJP). As head of OJP, she oversees an annual budget of more than $2 billion dedicated to supporting state, local and tribal criminal justice agencies; an array of juvenile justice programs; a wide range of research, evaluation and statistical efforts; and comprehensive services for crime victims.

 “I’m delighted to welcome Karol Mason back to the Justice Department, this time as Assistant Attorney General for the Office of Justice Programs,” said Attorney General Eric Holder. “Karol’s leadership has already been instrumental in bringing about fundamental improvements to the department. I also want to thank Mary Lou Leary for her leadership of the Office of Justice Programs and I’m thrilled to be working with both Karol and Mary Lou, and look forward to all that they and their colleagues will accomplish, as we continue to advance OJP’s important mission.” 

From 2009-2012 Mason served at the Justice Department as Deputy Associate Attorney General with oversight responsibility for the Tax Division, the Office of Justice Programs, the Office on Violence Against Women and the Office of Community Oriented Policing Services. During this time, Mason headed a cross-department initiative to address criminal justice issues in New Orleans, led Attorney General Holder’s Defending Childhood Initiative and helped create its Task Force on Children Exposed to Violence, forming partnerships on this issue with the Departments of Education and Health and Human Services. Mason was responsible for the implementation of the Combined Tribal Assistance Solicitation (CTAS) which consolidates all of the Justice Department’s tribal grants under a single solicitation. Mason was awarded the  Distinguished Service Award for outstanding service to the Department of Justice by Attorney General Eric Holder in 2011.

Prior to her federal government service, Karol Mason was a partner at the Atlanta law firm of Alston & Bird where she focused on public and project finance, chaired the firm’s public finance group, served on its management committee and provided counsel in the area of government investigations.

Karol Mason received her J.D. from the University of Michigan Law School, where she was note editor for the University of Michigan Journal of Law Reform. She received her A.B. from The University of North Carolina at Chapel Hill, where she was a member of the board of trustees from 2001 to 2009.

The Justice Department announced today that it will monitor municipal elections on June 4, 2013, in the cities of Brookhaven, Greenwood, Isola, Meridian, Philadelphia and Ruleville, Miss., 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 Greenwood, Isola, Philadelphia and Ruleville 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.

In addition, department personnel will monitor polling place activities in Brookhaven and Meridian.  Attorneys from the Justice Department’s Civil Rights Division will coordinate 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.

Michael P. Jackson, 40, of Carmi, Ill., was sentenced today in the U.S. District Court for the Southern District of Florida to serve 72 months in prison for selling the prescription drug known as Adderall, from 2009 to 2012, to a Florida woman who operated an illegal Internet-pharmacy business. Jackson also was sentenced to three years of supervised release.

According to the Dec. 6, 2012, indictment, defendant Jackson supplied his co-defendant Lina Rodriguez with pills of Adderall, which contains amphetamine, a Schedule II controlled substance.  As defendant Jackson was aware and intended, co-defendant Rodriguez resold the Adderall pills through an Internet business she owned and operated in southern Florida.

“This prosecution aims to curb the sale of dangerous drugs to United States citizens,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the U.S. Department of Justice. “The controlled substance drugs allegedly sold by the defendants were not dispensed by U.S. licensed pharmacies, and were not prescribed by any physician.  Along with FDA, the U.S. Postal Inspection Service, and our other law enforcement partners, we will continue to protect our citizens from unsafe and potentially harmful drugs.”

Jackson pled guilty to the lead count of the indictment on March 11, 2013, which charged him and Rodriguez with conspiring to possess with the intent to distribute Adderall.   Pursuant to his plea agreement, Jackson agreed not to oppose a judgment against him in the amount of $18,862, as gross proceeds of the offense to which he pleaded guilty. Rodriguez was sentenced to 72 months’ imprisonment on April 22, 2013.

The case was investigated by the Miami Field Office of the U.S. Food & Drug Administration’s Office of Criminal Investigations; the Miami Division of the U.S. Postal Inspection Service; and the Sacramento Field Office of the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Kevin J. Larsen of the U.S. Attorney’s Office for the Southern District of Florida, and Perham Gorji, Trial Attorney for the U.S. Department of Justice’s Consumer Protection Branch.

FRESNO, Calif. — Esteban Mendoza-Galeno, 44, de Fresno, fue sentenciado hoy por el Juez de Distrito de los Estados Unidos Lawrence J. O’Neill a dos años y tres meses de prisión por producir documentos fraudulentos de identificación del gobierno, anunció el Fiscal Benjamin B. Wagner de los Estados Unidos.

De acuerdo con documentos de los tribunales, entre Febrero y Marzo de 2012, Mendoza-Galeno fabricó y vendió a clientes en Fresno documentos de identificación falsos, tales como tarjetas de seguridad social y tarjetas de residencia permanente, por hasta $120.00 el juego de documentos. El Juez O’Neill aumentó la sentencia de Mendoza-Galeno en base a su posesión de aproximadamente 213 imàgenes de documentos fraudulentos sobre varios artículos de medios electrónicos, incluida la computadora laptop de Mendoza-Galeno y los dispositivos de memoria. Al sentenciar a Mendoza-Galeno, el Juez O’Neill le dijo “Usted es un impostor experimentado.”

Este caso fue el producto de una investigación por parte del Departamento de Investigaciones de Seguridad Interna (HSI por su sigla en inglés) del àrea de aplicación de la Ley de Aduana e Inmigraciones de los Estados Unidos (ICE por su sigla en inglés). El Fiscal Adjunto de los Estados Unidos Christopher Baker impulsó la causa.

U.S. District Judge Alexander Williams Jr. sentenced Anthony McIntosh, a former correctional officer at the Prince George’s County Detention Center, in Upper Marlboro, Md., to 24 months in prison for obstruction of justice.  McIntosh had entered a guilty plea on Jan. 4, 2013, at which time he admitted that he had obstructed justice by providing false information about the circumstances surrounding the in-custody death of Ronnie White.  At the time of his death on June 29, 2008, White was being detained on charges related to the death two days earlier of a Prince George’s County police officer.
 
McIntosh, 49, of Brooklyn, N.Y., admitted during his guilty plea that he had provided false information in a witness statement he submitted to a police detective investigating White’s in-custody death.  McIntosh admitted that he omitted from his witness statement material information that was truthful and included information that he knew was false.  Specifically, McIntosh claimed in the false witness statement that another officer had discovered White unresponsive in his single-occupant cell and had then summoned McIntosh to the cell.   During his guilty plea, McIntosh admitted that, in actuality, he had been the first correctional officer to find White unresponsive in the cell and that he had failed to call a medical emergency signal as required by the Department of Corrections.  McIntosh also admitted that he included in his statement the false claims that he never moved Ronnie White's body and that he “didn’t know what was going on” when his partner told him that White appeared to be unresponsive.  
 
“Instead of lawfully carrying out his duties as a correctional officer, Mr. McIntosh used his official position to obstruct the search for the truth regarding the in-custody death of a pretrial detainee,” said Deputy Assistant Attorney General for the Civil Rights Division Roy L. Austin Jr.  “The Justice Department will continue to vigorously prosecute officers who cross the line and engage in criminal misconduct.”
 
The case was investigated by the Baltimore Division of the FBI and was prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Ali Ahmad of the Civil Rights Division of the Department of Justice, with the assistance of the U.S. Attorney’s Office for the District of Maryland.

A federal jury sitting in the Eastern District of Pennsylvania convicted Eugene Goldman, M.D., 55, of Philadelphia, of one count of conspiring to violate the anti-kickback statute and four counts of violating the anti-kickback statute in relation to his role in a kickback scheme arising from his employment as the Medical Director at Home Care Hospice Inc. (HCH), announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.

  The evidence at trial proved that from approximately December 2000 until approximately July 2011, Goldman served as the medical director for HCH and regularly referred Medicare or Medicaid patient beneficiaries to HCH.  HCH was a for-profit business in Philadelphia that provided hospice services for patients at nursing homes, hospitals and private residences.  

In December 2000, Goldman and one of the co-owners of HCH entered into a written contract to create the false appearance that all payments to Goldman from HCH were for services rendered in Goldman’s capacity as medical director for HCH, when in fact the large majority of payments from HCH to Goldman were illegal payments for the referral of Medicare and/or Medicaid patients to HCH.  From January 2003 to October 2008, Goldman received approximately $263,000 in illegal payments for patient referrals.  In January, February and March 2009, Goldman was captured on tape receiving kickbacks for patient referrals.

Goldman faces a maximum penalty of five years in prison for each count of conviction when he is sentenced on Sept. 9, 2013, by U.S. District Judge Eduardo Robreno. The conviction will result in the mandatory exclusion of Goldman from participation in any federal health care program, and he also faces the possible loss of his medical license.

The case was investigated by the FBI and the Department of Health and Human Services, Office of Inspector General.  Assistant U.S. Attorney Suzanne B. Ercole and Trial Attorney Margaret Vierbuchen of the Organized Crime and Gang Section in the Justice Department’s Criminal Division prosecuted the case on behalf of the United States.

WASHINGTON - The United States has extradited Sulejman Mujagic, a citizen of Bosnia and Herzegovina and a resident of Utica, New York, to stand trial in Bosnia for charges relating to the torture and murder of one prisoner of war and the torture of another during the armed conflict in Bosnia.

Acting Assistant Attorney General Mythili Raman of the Justice Department's Criminal Division, U.S. Attorney Richard S. Hartunian of the Northern District of New York, and U.S. Immigration and Customs Enforcement (ICE) Director John Morton made the announcement.

“This extradition is the result of close cooperation between the U.S. and Bosnian authorities to bring alleged perpetrators of war crimes and torture in Bosnia to justice,” said Acting Assistant Attorney General Raman.

“Through the coordinated efforts of many law enforcement agencies and prosecutors, Sulejman Mujagic will stand trial in a Bosnian court for the alleged murder of an unarmed soldier and the torture of a second soldier,” said United States Attorney Hartunian. “This case is a reflection of our steadfast commitment to support the rights of crime victims - wherever they are.”

“For the families who lost loved ones during the Bosnian war, justice has been a long time coming, but they can take some comfort in knowing that those responsible for this tragedy are now being held accountable for their crimes,” said ICE Director John Morton. “I applaud the outstanding work by Homeland Security Investigations (HSI) special agents in upstate New York, ICE's Human Rights Violators and War Crimes Center, and our partners at the Department of Justice and Bosnia and Herzegovina authorities. Thanks to their efforts, Sulejman Mujagic will now face justice for his actions. We will continue to work tirelessly to ensure our country does not serve as a safe haven for human rights violators and others who have committed heinous acts.”

Mujagic is being extradited to Bosnia to be tried for war crimes committed on or about March 6, 1995, during the armed conflict that followed the breakup of the former Yugoslavia. Bosnia has alleged that Mujagic, then a platoon commander in the Army of the Autonomous Province of Western Bosnia, summarily tortured and executed a disarmed Bosnian Army soldier and tortured a second soldier after the two prisoners had been captured by Mujagic and his men.

In response to the Bosnian government's request for extradition pursuant to the extradition treaty currently in force between the United States and Bosnia, the U.S. Department of Justice filed a complaint in U.S. federal district court on Nov. 27, 2012, and HSI special agents arrested Mujagic the next day in Utica, New York, for purposes of extradition.

On April 2, 2013, the federal district court in the Northern District of New York ruled that Mujagic was subject to extradition to Bosnia to stand trial for the murder and torture of the two unarmed victims. On May 31, 2013, Mujagic was delivered to Bosnian authorities and removed from the United States. The Office of the Cantonal Prosecutor of the Una-Sana Canton in Bihac is handling Mujagic's prosecution in Bosnia.

Mujagic entered the United States in July 1997 and obtained status as a lawful permanent resident in March 2001. Mujagic does not retain U.S. citizenship.

This case was investigated by HSI Buffalo, with assistance from the ICE Human Rights Violators and War Crimes Center and INTERPOL Washington. The case was handled by Trial Attorneys Ivana Nizich and Jay Bauer of the Human Rights and Special Prosecutions Section of the Justice Department's Criminal Division and Assistant U.S. Attorney Carla Freedman of the Northern District of New York. The extradition was handled collaboratively with Criminal Division Trial Attorneys Ken Harris, Marcus Busch and Terry Schubert of the Office of International Affairs.

The case was a result of the close cooperation between the U.S. and Bosnian authorities, particularly the Ministry of Internal Affairs and the Office of the Public Prosecutor of the Una-Sana Canton in Bihac, Bosnia.

The United States has extradited Sulejman Mujagic, a citizen of Bosnia and Herzegovina and a resident of Utica, N.Y., to stand trial in Bosnia for charges relating to the torture and murder of one prisoner of war and the torture of another during the armed conflict in Bosnia.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Richard S. Hartunian of the Northern District of New York and U.S. Immigration and Customs Enforcement (ICE) Director John Morton made the announcement.

“This extradition is the result of close cooperation between the U.S. and Bosnian authorities to bring alleged perpetrators of war crimes and torture in Bosnia to justice,” said Acting Assistant Attorney General Raman. 

 “Through the coordinated efforts of many law enforcement agencies and prosecutors, Sulejman Mujagic will stand trial in a Bosnian court for the alleged murder of an unarmed soldier and the torture of a second soldier,” said U.S. Attorney Hartunian.  “This case is a reflection of our steadfast commitment to support the rights of crime victims – wherever they are.”

“For the families who lost loved ones during the Bosnian war, justice has been a long time coming, but they can take some comfort in knowing that those responsible for this tragedy are now being held accountable for their crimes,” said ICE Director Morton.  “I applaud the outstanding work by Homeland Security Investigations (HSI) special agents in upstate New York, ICE’s Human Rights Violators and War Crimes Center, and our partners at the Department of Justice and Bosnia and Herzegovina authorities.  Thanks to their efforts, Sulejman Mujagic will now face justice for his actions.  We will continue to work tirelessly to ensure our country does not serve as a safe haven for human rights violators and others who have committed heinous acts.”

Mujagic is being extradited to Bosnia to be tried for war crimes committed on or about March 6, 1995, during the armed conflict that followed the breakup of the former Yugoslavia.  Bosnia has alleged that Mujagic, then a platoon commander in the Army of the Autonomous Province of Western Bosnia, summarily tortured and executed a disarmed Bosnian Army soldier and tortured a second soldier after the two prisoners had been captured by Mujagic and his men.

In response to the Bosnian government’s request for extradition pursuant to the extradition treaty currently in force between the United States and Bosnia, the U.S. Department of Justice filed a complaint in U.S. federal district court on Nov. 27, 2012, and HSI special agents arrested Mujagic the next day in Utica for purposes of extradition. 

On April 2, 2013, the federal district court in the Northern District of New York ruled that Mujagic was subject to extradition to Bosnia to stand trial for the murder and torture of the two unarmed victims.  On May 31, 2013, Mujagic was delivered to Bosnian authorities and removed from the United States.  The Office of the Cantonal Prosecutor of the Una-Sana Canton in Bihac is handling Mujagic’s prosecution in Bosnia. 

Mujagic entered the United States in July 1997 and obtained status as a lawful permanent resident in March 2001.  Mujagic does not retain U.S. citizenship. 

This case was investigated by HSI Buffalo, with assistance from the ICE Human Rights Violators and War Crimes Center and INTERPOL Washington.  The case was handled by Trial Attorneys Ivana Nizich and Jay Bauer of the Human Rights and Special Prosecutions Section of the Justice Department’s Criminal Division and Assistant U.S. Attorney Carla Freedman of the Northern District of New York.  The extradition was handled collaboratively with Criminal Division Trial Attorneys Ken Harris, Marcus Busch and Terry Schubert of the Office of International Affairs.

The case was a result of the close cooperation between the U.S. and Bosnian authorities, particularly the Ministry of Internal Affairs and the Office of the Public Prosecutor of the Una-Sana Canton in Bihac, Bosnia.

William P. Danielczyk Jr. was sentenced today to 28 months in prison and ordered to pay a $50,000 fine for illegally reimbursing $186,600 in contributions to the Senate and Presidential campaign committees of a candidate for federal office and then obstructing the subsequent law enforcement investigation.

Acting Assistant Attorney General Mythili Raman of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge James C. Cacheris in the Eastern District of Virginia.

On Feb. 26, 2013, Danielczyk, 51, and Eugene R. Biagi, 78, both of Oakton, Va., pleaded guilty to making illegal conduit campaign contributions. Biagi was sentenced to two years’ supervised probation for his role in Danielczyk’s scheme.

According to court records, Danielczyk was the chairman of Galen Capital Corporation and Biagi served as the corporation’s secretary. In September 2006, Danielczyk co-hosted a fundraiser for a candidate’s campaign for the U.S. Senate and in March 2007 he co-hosted a fundraiser for the same candidate’s 2008 campaign for the President of the United States.

Danielczyk admitted that he recruited individuals, including Biagi and other corporate employees, to serve as “straw donors” to the campaigns, assuring the donors that they would be reimbursed for their contributions. Danielczyk’s assistant collected the contributions, and Danielczyk and Biagi then reimbursed the straw donors for their contributions using Galen Capital Corporation’s corporate funds.

Biagi admitted that he disguised the nature of the reimbursement payments by falsely identifying the purpose of the reimbursement checks on the memorandum line of the check itself and by issuing the checks for amounts slightly larger than the campaign contributions. As part of the obstruction scheme, Danielczyk directed the creation of back-dated letters addressed to individual contributors, which falsely characterized the reimbursement payments to them as “consulting fees.”  One set of the letters contained a check for $1,500 in order to further the charade that the reimbursement checks were consulting fees.  Biagi furthered the scheme by, among other means, signing the back-dated letters and the checks, thereby supporting Danielczyk’s aims at covering up the true conduct and obstructing the investigations focused on the reimbursement scheme.

Danielczyk and Biagi admitted they used corporate funds to reimburse a total of $186,600 to the two campaigns. The campaigns unwittingly reported them as lawful contributions from the individual “straw donors.”

This case was investigated by the FBI’s Washington Field Office. Assistant U.S. Attorneys Mark D. Lytle and Timothy D. Belevetz from the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section prosecuted the case on behalf of the United States.

A forfeiture judgment was executed today against real property with an estimated value of more than $700,000 in Rockville, Md., that had been purchased with corruption proceeds traceable to Diepreye Solomon Peter Alamieyeseigha, a former Governor of Bayelsa State, Nigeria, announced Acting Assistant Attorney General Mythili Raman of the Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.

“Foreign officials who think they can use the United States as a stash-house are sorely mistaken,” said Acting Assistant Attorney General Raman.  “Through the Kleptocracy Initiative, we stand with the victims of foreign official corruption as we seek to forfeit the proceeds of corrupt leaders’ illegal activities.”

“This investigation was initiated by ICE’s Homeland Security Investigations (HSI) Asset Identification & Removal Group (AIRG) in Baltimore, in an effort to recover the criminal proceeds from Diepreye Solomon Peter Alamieyeseigha’s assets, whose shell companies were convicted of money laundering offenses in Nigeria,” said ICE Director Morton.  “HSI’s AIRG will continue working with the Department of Justice to seek to recover illicit proceeds gained through foreign corruption and to protect the U.S. financial system from being utilized by criminals.”

Alamieyeseigha, aka DSP, was the elected governor of oil-producing Bayelsa State in Nigeria from 1999 until his impeachment in 2005.  As alleged in the U.S. forfeiture complaint, DSP’s official salary for this entire period was approximately $81,000, and his declared income from all sources during the period was approximately $248,000.  Nevertheless, while governor, DSP accumulated millions of dollars’ worth of property located around the world through corruption and other illegal activities.  The complaint alleges that DSP acquired the Rockville property during his first term as governor of Bayelsa State with funds obtained through corruption, abuse of office, money laundering and other violations of Nigerian and U.S. law.  Title to the property was transferred to Solomon & Peters, Ltd., a shell corporation controlled by DSP and on whose behalf the former governor entered a guilty plea to money laundering in Nigeria in 2007. 

On May 24, 2013, U.S. District Court Judge Roger W. Titus of the District of Maryland granted a motion for a default judgment filed by the Criminal Division’s Asset Forfeiture and Money Laundering Section and issued a final decree of forfeiture.  The order extinguishes all prior title and authorizes forfeiture to the United States of the private residence located in Rockville, Maryland, estimated to be worth more than $700,000 and allows the United States to liquidate the property in accordance with federal law.  In a related action in the District of Massachusetts, the Department of Justice and ICE Homeland Security Investigations successfully forfeited approximately $400,000 from an investment account traceable to DSP. 

Both actions were brought under the Justice Department’s Kleptocracy Asset Recovery Initiative announced by the Attorney General in 2010.  Through this initiative, the Department of Justice, along with federal law enforcement agencies, seeks to identify and forfeit the proceeds of foreign official corruption, and where possible and appropriate return those corruption proceeds for the benefit of the people of the nations harmed by the corruption. 

The case was investigated by the HSI’s Asset Identification & Removal Group (AIRG) in Baltimore. The case was prosecuted by Assistant Deputy Chief Daniel H. Claman and Trial Attorney Tracy Mann of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with assistance from the U.S. Attorney’s Office of the District of Maryland. 

Individuals with information about possible proceeds of foreign corruption in the United States, or funds laundered through institutions in the United States, should contact Homeland Security Investigations or other federal law enforcement, or send an email to kleptocracy@usdoj.gov. 

William Robert Hupman Jr., pleaded guilty today to corruptly endeavoring to obstruct or impede the due administration of the internal revenue laws, the Justice Department and the Internal Revenue Service (IRS) announced today. 

According to court documents, Hupman managed and controlled Security Concepts LLC,  a security alarm company based in Mebane, N.C.  Instead of receiving a salary from Security Concepts, Hupman received income by using a Security Concepts debit card to pay his expenses. Despite receiving over $770,000 in such fees between 2007 and 2011, Hupman has not filed an individual income tax return since tax year 2006. 

In addition to his failure to comply with his personal income tax responsibilities, Hupman also failed to comply with his employment tax responsibilities at Security Concepts. As the person who managed and controlled Security Concepts, Hupman was responsible for withholding employment taxes and paying them over to the IRS on a periodic basis. Despite the fact that employment taxes were withheld from the wages of Security Concepts employees, Security Concepts has not paid employment taxes and filed the required tax form since the third quarter of 2009. Hupman neither paid over employment taxes nor filed the required tax form for the fourth quarter of 2009 and each of the quarters in 2010 and 2011.  He also has not paid the federal unemployment taxes owed or filed the required tax form for years 2009, 2010, or 2011. 

Hupman faces a maximum of three years in prison, one year of supervised release and a maximum fine of $250,000.  Sentencing is scheduled for Aug. 29, 2013.

Kathryn Keneally, Assistant Attorney General of the Justice Department?s Tax Division, thanked Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Todd Ellinwood and Kevin Lombardi for prosecuting the case.

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

The Justice Department today announced an agreement with the City of West Columbia, S.C., to improve access to all aspects of civic life for persons with disabilities.  The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).

“The ADA is a passport to our nation’s cities for people with disabilities.  This agreement ensures that all people have access to West Columbia’s parks and other programs, services and activities,” said Eve L. Hill, Senior Counselor to the Assistant Attorney General of the Civil Rights Division. “Access to our cities is a basic civil right and the ADA is shaping the way our country and its people think inclusively about themselves and people with disabilities.”

As part of the PCA initiative, department staff, including investigators and architects, survey local government facilities, services and programs across the country.  The purpose of the surveying is to identify modifications needed in order for a city to comply with the ADA requirements.  The agreements address the steps each community must take to improve access.

Under the agreement announced today, West Columbia will take important steps to improve access for people with disabilities, such as:

• Physically modifying facilities surveyed by the department so that parking, routes into buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;

• Surveying the city’s other facilities and programs and making modifications where necessary to achieve compliance with ADA requirements;

• Complying with the ADA’s architectural accessibility requirements when the city builds or alters its buildings and outdoor facilities;

• Posting, publishing and distributing notices to inform members of the public of the provisions of the ADA and their applicability to the city’s programs, services and activities;

• Officially recognizing Relay South Carolina telephone service as a key means of communicating with individuals who are deaf, are hard-of-hearing, or have speech impairments and training staff in using the relay service for telephone communications;

• Developing a method for providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs;

• Posting an online policy that its web pages will be accessible, creating a process for implementation and ensuring that all new and modified web pages are accessible; and

• Implementing a comprehensive plan to improve the accessibility of sidewalks and curb cuts throughout the city.

 Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments.  The agreement requires the remediation actions to be completed within 3 years.  The department will actively monitor compliance with the agreement throughout this timeframe.
 
People interested in finding out more about the ADA, today’s agreement with the city of West Columbia, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for state and local governments may access the ADA Web page at www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).

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Settlement Agreement

The Justice Department announced that it has reached an agreement with the Yuba County Water Agency, a special district in California, that, if approved by the court, will allow for the district to bail out from its status as a “covered jurisdiction” under the special provisions of the Voting Rights Act, and thereby exempt the agency from the preclearance requirements of Section 5 of the Voting Rights Act. The agency covers Yuba County, Calif., which is a jurisdiction subject to Section 5. The agreement is in the form of a consent decree filed today in the U.S. District Court for the District of Columbia.  
 
Under Section 5 of the Voting Rights Act, certain covered jurisdictions, determined according to Section 4 of the act, are required to seek preclearance for any changes in voting qualifications, standards, practices or procedures from the U.S. District Court for the District of Columbia, or from the Attorney General, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bail out,” or remove itself from such coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in U.S. District Court for the District of Columbia. A bailout judgment can be issued only if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the Attorney General can consent to entry of a judgment of bailout only if, based upon investigation, the Attorney General is satisfied that the jurisdiction meets the eligibility requirements.
 
The Yuba County Water Agency filed its bailout action in the U.S. District Court for the District of Columbia on March 19, 2013. Agency officials had contacted the Attorney General prior to filing its action, indicating that the agency was interested in seeking a bailout. The agency provided the Justice Department with substantial information, and the department conducted an investigation to determine the agency’s eligibility. Based on that investigation, the department is satisfied that the agency meets the Voting Rights Act’s requirements for bailout.  
 
“In this case, the department carefully evaluated the information provided by the agency, and conducted its own investigation, which has satisfied us that the agency is eligible for bailout,” said Deputy Assistant Attorney General for the Civil Rights Division Matthew Colangelo.  “We appreciate the agency’s cooperation in the resolution of this matter.”

The consent decree details the legal and factual basis for a bailout determination and, if approved, will grant the agency’s request. The court will retain jurisdiction of the action for 10 years and can reopen the action upon the motion of the attorney general or any aggrieved person alleging conduct by the agency that would have originally precluded the agency from bailing out if it had occurred during the 10 year period preceding entry of the consent decree.  
 
Information about bailout, the Voting Rights Act and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

Today, the Justice Department issued a findings letter detailing the results of its investigation into the use of solitary confinement on prisoners with serious mental illness at the Pennsylvania State Correctional Institution at Cresson in Cambria County, Pa.  The department found that Cresson’s use of long-term and extreme forms of solitary confinement on prisoners with serious mental illness, many of whom also have intellectual disabilities, violates their rights under the Eighth Amendment to the U.S. Constitution and under the Americans with Disabilities Act (ADA). 

Though the Pennsylvania Department of Corrections now intends to close Cresson, many of the prison’s problematic policies and practices relating to the use of solitary confinement appear indicative of what is occurring statewide.  For this reason, in its findings letter, the department also notified the governor that the department is expanding the investigation to include all prisons in the Pennsylvania Department of Corrections to determine whether these other prisons also engage in the unlawful use of prolonged and extreme isolation of prisoners with serious mental illness and intellectual disabilities.  Secretary John Wetzel and his staff at the Department of Corrections have fully cooperated during the course of this investigation and the department looks forward to working collaboratively with them in the coming months.

In addition to finding that Cresson routinely resorts to locking prisoners with serious mental illness in their cells for 22 to 23 hours a day, for months or even years at a time, the department also found that Cresson often denies these prisoners basic necessities and subjects them to harsh and punitive conditions, including excessive uses of force.  The department concluded that Cresson’s misuse of solitary confinement on prisoners with serious mental illness leads to serious harms, including mental decompensation, clinical depression, psychosis, self-mutilation, and suicide. 

The department also found that Cresson came to rely on solitary confinement as a means of warehousing many of its prisoners with serious mental illness because of deficiencies relating to its mental health program.  Those systemic deficiencies include a disorganized and fragmented mental health program, marginalization of mental health staff, and disciplinary procedures that result in the punishment of disability-related behaviors and the placement of actively psychotic prisoners into harsh solitary confinement.  The department also found an oversight system that does not analyze suicides and other critical data. 

“We found that Cresson often permitted its prisoners with serious mental illness or intellectual disabilities to simply languish, decompensate, and harm themselves in solitary confinement for months or years on end under harsh conditions in violation of the Constitution,” said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division.  “These practices have serious public safety consequences because many of these individuals are returned to the community.  We look forward to continuing to work collaboratively with the Department of Corrections during the expanded investigation to bring an end to these practices.”

“The findings in this case are disturbing and expose a serious disregard for the health and safety of prisoners with serious mental illness,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania.  “We are dedicated to ensuring that prisoners throughout the Commonwealth are treated humanely and receive the appropriate mental health treatment in an effort to enhance their successful reintegration into the community upon release.”

The department initiated this investigation in December 2011 under the Civil Rights of Institutionalized Persons Act (CRIPA), which prohibits a pattern or practice of deprivation of constitutional rights of individuals confined to state or local government-run correctional facilities.  During the course of the investigation, the department made additional findings under the ADA.  The investigation also provided information to the department that justified an expanded investigation under CRIPA and the ADA. 

The expanded investigation will focus on allegations that prisons throughout the Pennsylvania Department of Corrections subject prisoners with serious mental illness and intellectual disabilities to prolonged periods of isolation under conditions similar to those found at Cresson.  Through this investigation the department will seek to determine whether the other prisons in the Commonwealth engage in a pattern or practice of the inappropriate use of prolonged isolation on prisoners with serious mental illness and intellectual disabilities in violation of the Constitution and federal law.  

This investigation was conducted by attorneys with the Special Litigation Section of the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Western District of Pennsylvania.  The Civil Rights Division and the U.S. Attorney’s Office will be partnering again to conduct the expanded statewide investigation.  Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt. 

American Commercial Colleges Inc. (ACC) has agreed to pay the United States up to $2.5 million, plus interest, to resolve allegations that it violated the civil False Claims Act by falsely certifying that it complied with certain eligibility requirements of the federal student aid programs, the Justice Department announced today.

To maintain eligibility to participate in federal student aid programs authorized by Title IV of the Higher Education Act of 1965, for-profit colleges such as ACC must obtain no more than ninety percent of their annual revenues from Title IV student aid programs.  At least ten percent of their revenues must come from other sources, such as payments from students using their own funds or private loans independent of Title IV.  Congress enacted this “90/10 Rule” based on the belief that quality schools should be able to attract at least a portion of their funding from private sources, and not rely solely upon the Federal Government.  The civil settlement resolves allegations that ACC violated the False Claims Act when it orchestrated certain short-term private student loans that ACC repaid with federal Title IV funds to artificially inflate the amount of private funding ACC counted for purposes of the 90/10 Rule.  The short-term loans at issue in this case were not sought or obtained by students on their own; rather, the United States contends ACC orchestrated the loans for the sole purpose of manipulating its 90/10 Rule calculations.

“American taxpayers have a right to expect federal student aid to be used as intended by Congress --  to help students obtain a quality education from an eligible institution,” said Stuart F. Delery, Acting Assistant Attorney General for the Department of Justice’s Civil Division.  “The Department of Justice is committed to making sure that for-profit colleges play by the rules and that Title IV funds are used as intended.”
 
Under the False Claims Act settlement, ACC, a privately-owned college operating several campuses in Texas, will pay the United States $1 million, plus interest, over five years, and could be obligated to pay an additional $1.5 million under the terms of the agreement.

“Misuse of taxpayers’ dollars cannot be tolerated – not only for the sake of taxpayers, but especially in the case of innocent individuals who seek to improve their lives through a quality education,” said U.S. Attorney for the Northern District of Texas Sarah R. Saldaña.

Today’s settlement resolves allegations brought by Shawn Clark and Juan Delgado, former directors of ACC campuses in Odessa and Abilene, respectively, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery.  Messrs. Clark and Delgado will receive $170,000 of the $1 million fixed portion of the government’s recovery, and would receive an additional $255,000 if ACC becomes obligated to pay the maximum $1.5 million contingent portion of the settlement.

This case was handled by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Northern District of Texas; and the Department of Education’s Office of Inspector General and Office of General Counsel.

The lawsuit is captioned United States ex rel. Clark, et al., v. American Commercial Colleges, Inc., No. 5:10-cv-00129 (N.D. Tex.).  The claims settled by this agreement are allegations only, and there has been no determination of liability.

Manssor Arbabsiar, aka “Mansour Arbabsiar,” was sentenced today in New York City federal court to 25 years in prison for participating in a plot to murder the Saudi Arabian Ambassador to the U.S. while the Ambassador was in the U.S., announced John Carlin, Acting Assistant Attorney General for the National Security Division at the Department of Justice and Preet Bharara, U.S. Attorney for the Southern District of New York.

Arbabsiar, a 58 year-old naturalized U.S. citizen holding both Iranian and U.S. passports, was arrested on Sept. 29, 2011, at John F. Kennedy International Airport.  He pleaded guilty on Oct. 17, 2012, to one count of murder-for-hire, one count of conspiracy to commit murder-for-hire, and one count of conspiracy to commit an act of terrorism transcending national boundaries before U.S. District Judge John F. Keenan, who also imposed today’s sentence.
“Thanks to the collaborative efforts of many U.S. law enforcement and intelligence professionals, Manssor Arbabsiar is today being held accountable for his role in this assassination plot,” said Acting Assistant Attorney General for National Security John Carlin.  “I applaud all those responsible for ensuring that Arbabsiar and his co-conspirators in Iran’s Qods Force failed in their efforts.  Today’s sentencing serves as a reminder of the evolving threat environment we face.”
“Manssor Arbabsiar was an enemy among us – the key conduit for, and facilitator of, a nefarious international plot concocted by members of the Iranian military to assassinate the Saudi Ambassador to the United States and as many innocent bystanders as necessary to get the job done,” said U.S. Attorney Bharara.  “And but for the vigilance of our FBI and DEA partners, his plot, and the unspeakable harm it would have caused, may well have come to fruition, which is exactly why our commitment to using every resource we have to root out, prosecute and punish people like Arbabsiar, who act as emissaries for our enemies, remains unflagging.” 
           
According to the complaint and indictment filed in federal court:

From the spring of 2011 to October 2011, Arbabsiar and his Iran-based co-conspirators, including members of Iran’s Qods Force, plotted the murder of the Saudi Arabian Ambassador to the U.S.  In furtherance of this conspiracy, Arbabsiar met on a number of occasions in Mexico with a DEA confidential source (CS-1) who posed as an associate of a violent international drug trafficking cartel.  Arbabsiar arranged to hire CS-1 and CS-1’s purported accomplices to murder the Ambassador with the awareness and approval of his Iran-based co-conspirators.  Arbabsiar wired approximately $100,000 to a bank account in the U.S. as a down payment to CS-1 for the anticipated killing of the Ambassador, which was to take place in the U.S, also with the approval of his co-conspirators.

The Qods Force is a branch of the Iranian Islamic Revolutionary Guard Corps (IRGC), which conducts sensitive covert operations abroad, including terrorist attacks, assassinations, and kidnappings, and is believed to have sponsored attacks against Coalition Forces in Iraq.  In October 2007, the U.S. Treasury Department designated the Qods Force as a terrorist supporter for providing material support to the Taliban and other terrorist organizations.

Arbabsiar met with CS-1 in Mexico on several occasions between May 2011 and July 2011.  During the course of these meetings, he inquired as to CS-1’s knowledge with respect to explosives and explained that he was interested in, among other things, attacking an embassy of Saudi Arabia and the murder of the Saudi Ambassador to the U.S.  In a July 14, 2011 meeting in Mexico, CS-1 told Arbabsiar that he would need to use at least four men to carry out the Ambassador’s murder and that his price for doing so was $1.5 million.  Arbabsiar agreed and stated that the murder of the Ambassador should be handled first, before the execution of other attacks that he had discussed with CS-1.  Arbabsiar also indicated that he and his associates had $100,000 in Iran to give CS-1 as a first payment toward the assassination.

During the same meeting, Arbabsiar also described to CS-1 his cousin in Iran, who he said had requested that Arbabsiar find someone to carry out the Ambassador’s assassination.  Arbabsiar indicated that his cousin was a “big general” in the Iranian military, that he focuses on matters outside of Iran, and that he had taken certain unspecified actions related to a bombing in Iraq. 

In a July 17, 2011, meeting in Mexico, CS-1 noted to Arbabsiar that one of his workers had already traveled to Washington, D.C., to surveil the Ambassador.  CS-1 also raised the possibility of innocent bystander casualties.  Arbabsiar made it clear that the assassination needed to go forward, despite mass casualties, telling CS-1, “They want that guy [the Ambassador] done [killed], if the hundred go with him f**k ‘em.”  CS-1 and Arbabsiar discussed bombing a restaurant in the U.S. that the Ambassador frequented.  When CS-1 noted that others could be killed in the attack, including U.S. senators who dine at the restaurant, Arbabsiar dismissed these concerns as “no big deal.”

On Aug. 1 and Aug. 9, 2011, Arbabsiar caused two overseas wire transfers totaling approximately $100,000 to be sent to an FBI undercover account as a down payment for CS-1 to carry out the assassination.  Later, Arbabsiar explained to CS-1 that he would provide the remainder of the $1.5 million after the assassination.  On Sept. 20, 2011, CS-1 told Arbabsiar that the operation was ready and requested that he either pay one half the agreed upon price ($1.5 million) for the murder or that Arbabsiar personally travel to Mexico as collateral for the final payment of the fee.  Arbabsiar agreed to travel to Mexico to guarantee final payment for the murder.

On Sept. 28, 2011, Arbabsiar flew to Mexico, and he was refused entry into the country and placed on a return flight destined for his last point of departure.  The following day, Arbabsiar was arrested by federal agents during a flight layover at JFK International Airport in New York.  Several hours after his arrest, Arbabsiar was advised of his Miranda rights and he agreed to waive those rights and speak with law enforcement agents.  During a series of Mirandized interviews, Arbabsiar confessed to his participation in the murder plot.

In addition, Arbabsiar admitted to agents that, in connection with this plot, he was recruited, funded, and directed by men he understood to be senior officials in Iran’s Qods Force.  He said these Iranian officials were aware of, and approved of, the use of CS-1 in connection with the plot, as well as payments to CS-1, the means by which the Ambassador would be killed in the U.S., and the casualties that would likely result. 

Arbabsiar also told agents that his cousin, whom he had long understood to be a senior member of the Qods Force, had approached him in the early spring of 2011 about recruiting narco-traffickers to kidnap the Ambassador.  He told agents that he then met with CS-1 in Mexico and discussed assassinating the Ambassador.  Arbabsiar said that afterwards, he met several times in Iran with Gholam Shakuri, aka “Ali Gholam Shakuri,” a co-conspirator and Iran-based member of the Qods Force, and another senior Qods Force official, where Arbabsiar explained that the plan was to blow up a restaurant in the U.S. frequented by the Ambassador and that numerous bystanders would be killed.  According to Arbabsiar, the plan was approved by these officials.

In October 2011, after his arrest, Arbabsiar made phone calls at the direction of law enforcement to Shakuri in Iran that were monitored.  During these calls, Shakuri confirmed that Arbabsiar should move forward with the plot to murder the Ambassador and that he should accomplish the task as quickly as possible, stating on Oct. 5, 2011, “[j]ust do it quickly, it’s late…”  Shakuri also told Arbabsiar that he would consult with his superiors about whether they would be willing to pay CS-1 additional money.  Shakuri, who was also charged in the plot, remains at large.

*                *                *

In addition to the prison term, Arbabsiar was ordered to pay forfeiture in the amount of $125,000.

This case was investigated by the FBI Houston Division, the DEA Houston Division, and the FBI New York Joint Terrorism Task Force, with the assistance of the Department of Justice’s Office of International Affairs, its National Security Division, and the Department of State.  The Government of Mexico also cooperated with the investigation.

This case is being handled by the U.S. Attorney’s Office for the Southern District of New York, Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Glen Kopp, Edward Kim, and Stephen Ritchin are in charge of the prosecution with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.

The United States yesterday filed a complaint asking a federal court in Atlanta, Ga., to stop Matthew Adegbite and his companies MAS & Associates CPA, LLC and Mathew A. Adegbite CPA, PC, from preparing federal income tax returns for others, the Justice Department announced today.

 The complaint alleges that since at least 2008, Adegbite, who operates out of Tucker, Ga., a suburb of Atlanta, has prepared more than 1,000 returns.  The complaint alleges that Adebgite unlawfully understated income tax liabilities and overstated refunds by fabricating and/or exaggerating deductions and tax credits his clients are not eligible to take. Adegbite’s practices include fabricating Schedule C losses for non-existent businesses, and falsely claiming the First Time Home Buyer Credit for taxpayers who did not actually purchase a home.  Altogether, the government complaint alleges that the loss to the U.S. Treasury from Adegbite’s activities may be in the millions of dollars.

Over the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax fraud promoters and dishonest tax return preparers.  Information about these cases is available on the Justice Department’s website.

Related Materials:

United States v. Matthew Adegbite, et al.
Complaint for Injunctive Relief (PDF)
 

Joseph Rizzuti, of Stuart, Fla., was sentenced  to 80 months in federal prison for conspiracy to commit wire fraud and for corruptly endeavoring to obstruct the Internal Revenue Service (IRS), the Justice Department and the IRS announced today.

According to court documents, Rizzuti, an accountant and the owner of Beacon Accounting Services in Palm City, Fla., interfered with the IRS’s ability to collect taxes owed by two clients by stealing payments from those clients intended for the IRS and making misrepresentations to  the clients, as well as the IRS, to conceal his scheme. Rizzuti also admitted to engaging in a criminal conspiracy to commit wire fraud by making material misrepresentations to individuals throughout the United States who believed the money they were investing with Rizzuti and his co-conspirators was funding Nigerian-related oil and Bahamian construction projects, but instead Rizzuti and his co-conspirators used the investors’ money for their own personal expenses.  In total, Rizzuti and his co-conspirators stole approximately $3 million.

In addition to prison time, U.S. District Judge Donald L. Graham sentenced Rizzuti to serve three years of supervised release and to pay $298,000 in restitution to victims of his schemes to the IRS.  Additional penalties will be assessed in the next 90 days.

This case was investigated by special agents of IRS - Criminal Investigation and the Treasury Inspector General for Tax Administration. Trial Attorneys Justin Gelfand and Rebecca Perlmutter of the Justice Department’s Tax Division prosecuted the case.

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

The Department of Justice released today a report to Congress entitled Indian Country Investigations and Prosecutions which provides a range of enforcement statistics required under the Tribal Law and Order Act of 2010.  The report, based on data compiled from the case management system used by U.S. Attorney’s Offices (USAO) with Indian Country jurisdiction shows among other things a 54 percent increase in Indian Country criminal prosecutions since Fiscal Year 2009.

“Across the country, U.S. Attorneys have been focused on fighting crime in Indian Country and reinforcing the bond between federal and tribal law enforcement, which also strengthens the faith that people have in their criminal justice system,” said Attorney General Eric Holder.  “This report on federal law enforcement efforts in Indian Country is beginning to show the fruits of this labor with an increase in Indian Country cases prosecuted in federal courts over the past three years, but we have more work to do.   The department will continue in its commitment to working with our tribal partners to build safe, sustainable, and healthy communities in American Indian and Alaska Native communities.”

 “Every day, the men and women from U.S. Attorney’s Offices who prosecute violent crimes in Indian Country work hard to improve public safety in those communities,” said Timothy Purdon, U.S. Attorney for the District of North Dakota and Chairman of the Attorney General’s Advisory Subcommittee on Native American Issues.  “The notable increase in prosecutions of Indian Country crime described in this report are the result of the many initiatives led by U.S. Attorney’s Offices across the country, including community prosecution strategies that place federal prosecutors on the reservations on a frequent basis to enhance criminal investigations and communication, and Tribal Special Assistant U.S. Attorney programs that have enhanced coordination with cross-deputized tribal prosecutors. These efforts and the resulting increase in prosecutions are a testament to the Justice Department’s commitment to public safety in Indian Country and they are an encouraging step toward safer, stronger native communities.”

 “The FBI has a sustained commitment to enhancing public safety in Indian Country,” said FBI Assistant Director Ron Hosko. “As this report demonstrates our investigative strategy is focused on fully leveraging vital partnerships with federal, state, local and tribal agencies to address violent crime and victimization in tribal communities. This approach not only produces investigative results in the short term but also develops the trust and collaboration necessary to ensure sustained enhancements to public safety in the long term.”
 
The information contained in the report shows the following:

• The Justice Department’s prioritization of Indian country crime has resulted in a notable increase in commitment to overall law enforcement efforts in Indian country.  Caseloads have increased overall from 1,091 cases filed in fiscal year (FY) 2009 to 1,138 in FY 2010 to 1,547 in FY 2011 to 1,677 in FY 2012.  This represents a nearly 54 percent increase in the Indian country crime caseload.

• USAO data for calendar year (CY) 2011 indicate that just under 37 percent (1,041) of all Indian Country submissions for prosecution (2,840) were declined by USAOs.  In CY 2012, USAOs declined approximately 31 percent (965) of all (3,145) Indian Country submissions for prosecution.  Overall, a substantial majority of Indian Country criminal cases opened by USAOs were prosecuted.

• The most common reasons for declination by USAOs were insufficient evidence (61 percent in CY 2011 and 52 percent in CY 2012) and referral to another prosecuting authority (19 percent in CY 2011 and 24 percent in CY 2012).

• The most common reasons investigations during calendar years CY 2011 and 2012 were not referred included deaths determined to be due to non-criminal causes (e.g., natural causes, accidents, suicides) and allegations in which there was insufficient evidence to prove criminal activity.

•The report shows a new era of partnership between the federal government and American Indian tribes, including an unprecedented level of collaboration with tribal law enforcement.  The increase in collaboration and communication strengthens the bond of trust between federal and tribal investigators, prosecutors, and other personnel in both federal and tribal criminal justice systems, and it will make communities safer as a result.
 
Read the entire report at www.justice.gov/tribal/tloa-report-cy-2011-2012.pdf

Read about the Justice Department’s efforts to increase public safety in Indian County at www.justice.gov/tribal/accomplishments.html

The U.S. District Court for the Southern District of Mississippi today approved a landmark consent decree filed by the Justice Department, together with private plaintiffs and the Meridian Public School District in Meridian, Miss., to prevent and address racial discrimination in student discipline. The consent decree is a far-reaching plan to reform discipline practices, including suspensions, expulsions and school-based arrests that unlawfully channel black students out of their classrooms and, too often, into the criminal justice system.

“The consent decree approved by the court today will propel meaningful reform in Meridian schools and serve as a blueprint for school districts across the country,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division.  “We commend the Meridian Public School District for its commitment to keeping its students in safe and inclusive classrooms, and out of the school-to-prison pipeline.”
The consent decree amends a longstanding federal school desegregation decree enforced by the United States, which prohibits the district from discriminating against students based on race.

The district has already started to take action to implement the consent decree, which requires it to:

• Limit discipline that removes students from classrooms, such as suspensions, expulsions and alternative placement, as well as end exclusionary consequences for minor misbehavior; • Expand use of a proven behavior management approach known as positive behavior intervention and supports and train teachers and administrators so they have the tools necessary to safely and effectively manage their classrooms and schools; • Prevent school officials from involving law enforcement officers when a student’s behavior can be safely and appropriately handled under school disciplinary procedures; • Provide training for school law enforcement officers on bias-free policing, child and adolescent development and age appropriate responses, practices proven to improve school climate, mentoring and working with school administrators; • Create clear entry and exit criteria at the alternative school and provide support to facilitate students’ transitions back to their home schools; • Enhance due process protections in student discipline hearings; • Monitor discipline data to identify and respond to racial disparities; and
• Engage families and communities as partners in revising policies and through regular school and community forums.

“This consent decree is a major stride toward equal justice and equal opportunity for all students in Meridian,” said Gregory K. Davis, United States Attorney for the Southern District of Mississippi. “The court’s order is a powerful reminder to schools that they may not discriminate against students on the basis of race or another protected status in administering discipline.”

The department filed a related case against the Meridian Police Department, the Lauderdale County Youth Court and the State of Mississippi in October 2012, alleging that those defendants systematically violate the due process rights of students referred by the district. That case remains pending in the United States District Court for the Southern District of Mississippi.

The enforcement of Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, among other bases, in public schools is a top priority of the Justice Department’s Civil Rights Division.  Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.

Lea’Tice Phillips, of Montgomery County, Ala., pleaded guilty today to one count of wire fraud and one count of aggravated identity theft for her role in a stolen identity refund fraud scheme, the Justice Department and the Internal Revenue Service (IRS) announced today. 

According to the court documents, Phillips worked for an Alabama state agency and had access to state databases which contained means of identification of individuals. Between October 2009 and April 2012, Phillips conspired with Antoinette Djonret and others to file false tax returns using stolen identities. On multiple occasions, Phillips accessed a state database to obtain means of identification and used her state email to send means of identification to Djonret.  Djonret and others used those means of identification to file false tax returns mostly from Djonret’s residence in Montgomery, Ala. Djonret and her co-conspirators used an elaborate network of individuals to launder the tax refunds. They recruited individuals to purchase prepaid debit cards and to provide the cards to them.  Fraudulently obtained tax refunds were directed to the prepaid debit cards that Djonret and her co-conspirators used to obtain the proceeds.  Some of the prepaid debit cards were in the name of Phillips.  In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds. 

 The sentencing of Phillips has not yet been scheduled. Phillips faces between two and 22 years in prison, three years of supervised release, restitution, and a maximum fine of $750,000, or twice the loss caused by the offense.  Djonret was previously sentenced to 144 months in prison.

 The case was investigated by the IRS - Criminal Investigation.  Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney for the Middle District of Alabama Todd Brown are prosecuting the case.

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

Jason Giroir, 35, a former correctional officer with the Louisiana State Penitentiary (LSP) in Angola, La., pleaded guilty today before U.S. District Judge James J. Brady for the Middle District of Louisiana for his role in covering up an incident in which correctional officers used excessive force against an inmate. Giroir admitted filing a false report and subsequently providing false information to the FBI about the incident. Investigation of the incident is ongoing.

 
According to the factual basis filed in connection with his guilty plea, on or about Jan. 24, 2010, Giroir, then a major at LSP, heard that an inmate had escaped from his assigned location. Shortly thereafter, the inmate surrendered to prison officials. Giroir, one of the first officers to arrive at the surrender site, handcuffed the inmate and placed him on the back of his truck. Kevin L. Groom Sr., and two other LSP officers accompanied the handcuffed inmate in the rear of Giroir’s truck. During the transport, Giroir saw one of the officers repeatedly swing his asp baton down towards the inmate, and realized that the inmate was being beaten.

Some time after this incident, one of the officers who was in the back of the truck approached Giroir to talk about the incident. That officer admitted to Giroir that he had struck the inmate, but denied having used an asp baton.

Giroir also admitted that during the prison’s investigation of this incident, he wrote and submitted a false report denying that officers assaulted the inmate, and that he provided that same false information to the Federal Bureau of Investigation.

Giroir pleaded guilty to falsification of records in a federal investigation and to making a false statement to the FBI. As a result of his guilty plea, Giroir faces a statutory maximum sentence of 25 years.

 
“Instead of lawfully carrying out his critical public safety responsibilities, Mr. Giroir covered up the violent actions of other officers,” said Deputy Assistant Attorney General for the Civil Rights Division Roy Austin. “The Justice Department will continue to vigorously prosecute officers who cross the line and engage in criminal misconduct.”

 
U.S. Attorney for the Middle District of Louisiana Donald J. Cazayoux Jr. stated, “our public protection mission in law enforcement necessitates the protection of inmates from physical abuse by those who are charged with guarding them.  We will prosecute vigorously those law enforcement officers who are sworn to protect the public and undermine this mission by fabricating and covering up crimes they witness.”

 
" Mr. Giroir's guilty plea clearly confirms that the FBI pursues all aspects of excessive force incidents, including any attempted obstructions of the investigation of the underlying unlawful use of physical force by others," said FBI Special Agent in Charge Michael Anderson.

In a related case before Judge Brady, former LSP Officer Kevin Groom entered a guilty plea.  

The investigation in this matter was conducted by Special Agent Taneka Harris of the FBI and prosecuted by Civil Rights Division Trial Attorney AeJean (Angie) Cha and Assistant U.S. Attorney for the Middle District of Louisiana Robert W. Piedrahita.

Total, S.A., a French oil and gas company that trades on the New York Stock Exchange, has agreed to pay a $245.2 million monetary penalty to resolve charges related to violations of the Foreign Corrupt Practices Act (FCPA) in connection with illegal payments made through third parties to a government official in Iran to obtain valuable oil and gas concessions, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, and U.S. Attorney Neil H. MacBride for the Eastern of Virginia.

As part of the agreed resolution, the department today filed a criminal information in U.S. District Court for the Eastern District of Virginia charging Total with one count of conspiracy to violate the anti-bribery provisions of the FCPA, one count of violating the internal controls provision of the FCPA, and one count of violating the books and records provision of the FCPA.  The department and Total agreed to resolve the charges by entering into a deferred prosecution agreement for a term of three years.  In addition to the monetary penalty, Total also agreed to cooperate with the department and foreign law enforcement to retain an independent corporate compliance monitor for a period of three years and to continue to implement an enhanced compliance program and internal controls designed to prevent and detect FCPA violations. 

Also today, the U.S. Securities and Exchange Commission (SEC) entered into a cease-and-desist order against Total in which the company agreed to pay an additional $153 million in disgorgement and prejudgment interest.  Total also agreed with the SEC to comply with certain undertakings regarding its FCPA compliance program, including the retention of a compliance consultant.

In addition, French enforcement authorities announced earlier today that they had requested that Total, Total’s Chairman and Chief Executive Officer, and two additional individuals be referred to the Criminal Court for violations of French law, including France’s foreign bribery law.

“Today we announce the first coordinated action by French and U.S. law enforcement in a major foreign bribery case,” said Acting Assistant Attorney General Raman.  “Our two countries are working more closely today than ever before to combat corporate corruption, and Total, which bought business through bribes, now faces the criminal consequences across two continents.”

“The Eastern District of Virginia, through our strong partnership with the Criminal Division’s Fraud Section, is committed to holding accountable those who violate the Foreign Corrupt Practices Act,” said U.S. Attorney MacBride.  “Today’s deferred prosecution agreement, with both its punitive and forward-looking compliance provisions, dovetails with our goals of bringing violators to justice and preventing future misconduct.”

According to the deferred prosecution agreement, in 1995 Total sought to re-enter the Iranian oil and gas market by attempting to obtain a contract with the National Iranian Oil Company (NIOC) to develop the Sirri A and E oil and gas fields.  In May 1995, Total entered into negotiations with an Iranian official who served as the chairman of an Iranian state-owned and state-controlled engineering company.  Total subsequently entered into a purported consulting agreement pursuant to which Total would corruptly make payments to an intermediary designated by the Iranian official to secure NIOC signing a development agreement with Total for the Sirri A and E project, which NIOC did in July 1995.  Over the next two-and-a-half years, Total paid approximately $16 million in bribes under the purported consulting agreement.

In 1997, Total sought to negotiate a contract with NIOC to develop a portion of the South Pars gas field, the world’s largest gas field.  At the direction of the Iranian official, Total and a second intermediary entered into another purported consulting agreement that called for Total to make large payments to the intermediary.  In September 1997, Total executed a contract with NIOC that granted it a 40 percent interest in developing phases two and three of the South Pars gas field.  Over the next seven years, Total made unlawful payments of approximately $44 million pursuant to the second purported consulting agreement.

In sum, between 1995 and 2004, at the direction of the Iranian official, Total corruptly made approximately $60 million in bribe payments under the agreements for the purpose of inducing the Iranian official to use his influence in connection with Total’s efforts to obtain and retain lucrative oil rights in the Sirri A and E and South Pars oil and gas fields.  Total mischaracterized the unlawful payments as “business development expenses” when they were, in fact, bribes designed to corruptly influence a foreign official.  Further, Total failed to implement effective internal accounting controls, permitting the consulting agreements’ true nature and true participants to be concealed and thereby failing to maintain accountability for assets.

The case is being prosecuted by Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Charles Connolly of the U.S. Attorney’s Office for the Eastern District of Virginia.  Significant assistance was provided by the Criminal Division’s Office of International Affairs and by the SEC’s New York Regional Office.  The department also acknowledges and expresses its deep appreciation for the cooperation and partnership of French law enforcement authorities. 

Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Related Materials:

Information
DPA

Two former police officers with the Police of Puerto Rico were convicted of attempting to extort a commonwealth defendant and soliciting bribe payments of $50,000, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico.

Abimael Arroyo-Cruz, 30, of Rio Grande, Puerto Rico, was convicted by a jury on charges including conspiracy to commit federal programs bribery, bribery, conspiracy to commit extortion and attempted extortion.  Josue Becerril-Ramos, 36, of Carolina, Puerto Rico, pleaded guilty to the same counts during trial.

According to court records and evidence presented at trial, Arroyo and Becerril arrested eight individuals for possession of unregistered firearms and marijuana on Aug. 2, 2012.  The officers then solicited from one individual a bribe payment of $50,000 to have his case dismissed.  Beginning on Sept. 11, 2012, both officers spoke with the individual multiple times over the telephone, discussing payment details and strategies for dismissing the individual’s case. Arroyo and Becerril collected approximately $35,000 of the $50,000 in two different payment installments. 

In exchange for the bribes, Arroyo and Becerril devised a plan whereby the officers would misidentify a co-defendant in court, leading to dismissal of that defendant’s case.  When asked under oath at the preliminary hearing to identify the defendant, Arroyo instead identified a co-defendant. 

Unbeknownst to the officers, the individuals who dropped off the payments were cooperating with federal law enforcement. 

The case was investigated by the FBI’s San Juan Field Office. The case was prosecuted by Trial Attorneys Menaka Kalaskar and Marquest J. Meeks of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Timothy Henwood of the District of Puerto Rico. 

Following a two-week jury trial, F. Harvey Whittemore, a prominent lawyer and former lobbyist in Nevada, was convicted today of making unlawful campaign contributions to a Senate campaign committee in 2007 and causing a false statement to be made to the Federal Election Commission (FEC), announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Daniel G. Bogden, U.S. Attorney for the District of Nevada.

 “Today, a jury convicted Mr. Whittemore of using dozens of straw donors to evade contribution limits so he could make good on a campaign fundraising promise,” said Acting Assistant Attorney General Raman. “The cornerstones of our campaign finance laws are contribution limits and transparency, and Mr. Whittemore’s crime was designed to undermine both.  Today’s verdict demonstrates our resolve to aggressively pursue those who use illegal tricks to corrupt our democratic process.”

 “Persons who knowingly violate campaign contribution laws will be investigated and prosecuted to the full extent of the law,” said U.S. Attorney Bogden.  “Campaign laws exist to level the playing field.  The public deserves to know that these laws are not just ‘on the books,’ and that persons with power and money who abuse the system for their own benefit will be prosecuted.”

 Whittemore, 59, of Reno, Nev., was convicted of one count of making excessive campaign contributions, one count of making contributions in the name of others, and one count of causing a materially false statement to be made to the FEC, all felony offenses. 
 
According to the indictment and evidence presented at trial, during 2007, Whittemore was the chief executive of Wingfield Nevada Group and was a registered lobbyist in Nevada. 

On Feb. 21, 2007, Whittemore met with a U.S. senator at a hotel in Las Vegas and agreed to raise $150,000 in contributions for the senator’s campaign committee by March 31, 2007, which marked the end of an FEC-mandated quarterly reporting period. 

Federal laws prohibit persons from hiding their true identity when contributing to federal political campaigns, and also set limits on the amount that an individual can contribute to a campaign.  In 2007, the maximum individual contribution was $2,300 for a primary election and $2,300 for a general election; thus, the maximum for one candidate was $4,600.  

Aware of the strict limits on individual federal campaign contributions, Whittemore devised a scheme to unlawfully use about 29 family members, employees and their spouses as conduits to funnel more than $130,000 of his own money to the campaign.  This scheme allowed Whittemore to make an individual campaign donation to the campaign committee in excess of the limits established by federal law.  Whittemore concealed the scheme from the FEC, the senator, and the senator’s campaign committee.

In March 2007, Whittemore solicited family members, his employees and their spouses to make the maximum campaign donations to the senator’s campaign and Whittemore reimbursed or advanced the money to the contributors with personal checks and wire transfers.  Whittemore also paid the contributors additional money on top of the reimbursements.  If a conduit contributed $4,600, Whittemore reimbursed them $5,000; likewise if a couple contributed $9,200, he paid the couple $10,000. 

On or about March 28, 2007, Whittemore caused one of his employees to transmit $138,000 in contributions to the senator’s campaign committee, the vast majority of which were conduit contributions that Whittemore had personally funded in order to satisfy his pledge to the senator.  On April 15, 2007, the senator’s campaign then unknowingly filed a false report with the FEC stating that the conduits had made the contributions, when in fact, Whittemore had made them.

Whittemore is free on a personal recognizance bond pending sentencing, which is scheduled for Sept. 23, 2013.  Whittemore faces up to five years in prison and a $250,000 fine on each count.

The case was investigated by the FBI, and is being prosecuted by Trial Attorney Eric G. Olshan of the Public Integrity Section in the Justice Department’s Criminal Division and First Assistant U.S. Attorney Steven W. Myhre of the District of Nevada.