District Not Recorded

Former Congressional candidate Justin Lamar Sternad pleaded guilty today in Miami to violating the Federal Election Campaign Act during his 2012 campaign, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer and Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office.

Sternad, 35, of Miami, pleaded guilty before U.S. District Court Judge Robin S. Rosenbaum in the Southern District of Florida.  Sternad pleaded guilty to all counts of a criminal information that charged him with one count of conspiracy to make false statements to the Federal Election Commission (FEC), one count of making false statements to the FEC and one count of accepting illegal campaign contributions.

 Sternad was a candidate in the 2012 Democratic Party primary election for Florida’s 26th Congressional District.  According to court documents, Sternad engaged in a conspiracy to accept illegal campaign contributions and file false statements with the FEC in order to conceal the true source, amount and nature of the funds used by his campaign. 

Sternad admitted that his campaign accepted cash and checks in excess of Federal Election Campaign Act limits and that he filed statements that intentionally misled the FEC about his campaign’s activities.  During the campaign, illegal cash contributions from co-conspirators were used to pay for a rental car and the design, printing and distribution of campaign flyers. 

According to court documents, Sternad reported to the FEC that he made loans to his campaign in the amount of $63,801, when he knew that he had actually loaned fewer than $300.   In total, Sternad accepted over $70,000 in misreported campaign contributions.

 At sentencing, scheduled for May 31, 2013, Sternad faces a maximum penalty of five years in prison and a fine up to $250,000 on each count.

The case is being prosecuted by Senior Litigation Counsel Thomas J. Mulvihill of the U.S. Attorney’s Office for the Southern District of Florida and Richard C. Pilger, Director of the Election Crimes Branch of the Criminal Division’s Public Integrity Section.

The United States and the city of New Orleans announced today that public meetings would be held regarding a consent decree court monitor for the New Orleans Police Department (NOPD). The United States and the city of New Orleans on Sept. 6, 2012 issued a request for proposals to serve as the consent decree court monitor for NOPD. In response, the United States and the city of New Orleans received 12 proposals. The United States and the city of New Orleans formed an evaluation committee to evaluate those proposals and select a consent decree court monitor. The committee met publicly on March 7, 2013 and selected five candidates to be interviewed for the position. Those five candidates are:

1.       The Bromwich Group

2.       Elite Performance Assessment Consultants LLC

3.       Hillard Heintze

4.       OIR Group

5.       Sheppard Mullin

The proposals submitted by each of these candidates can be found at www.justice.gov/crt/about/spl/ and at http://new.nola.gov/purchasing/consent-decree/ . On April 2 and April 3, 2013 beginning at 8 a.m. CST, the Evaluation Committee will hold public meetings in which each of these candidates will be interviewed. The meetings will be held in the Superdome, in the Bienville Club Lounge. The Bienville Club Lounge can be accessed through the Gate B plaza level entrance in Garage 1.

There also will be opportunities for public comment at the meetings on April 2 and 3. At those meetings, each monitor candidate will be allowed to make a presentation of up to 30 minutes. Following each presentation, the public will be given up to 30 minutes in which to comment. Following the public comments, the evaluation committee may spend up to one hour asking questions of the monitor candidates.

If you wish to provide written comments about the process or the prospective monitor, you are encouraged to submit those comments by email to New Orleans City Attorney Richard Cortizas at rfcortizas@nola.gov . Please note “Re: NOPD Consent Decree Court Monitor” in the e-mail subject line. Comments also may be mailed or hand-delivered to the following address:

City of New Orleans Attorney

City of New Orleans

Re: NOPD Consent Decree Court Monitor

1300 Perdido St.

New Orleans 70112

The Department of Justice and the city of New Orleans will review any comments received by March 29, 2013, prior to the presentations. All written comments must be provided by 12:00 p.m. CDT on April 8, 2013. The city of New Orleans will file copies of all public comments received in the electronic record of United States of America v. City of New Orleans, Civil Action No. 12-1924 (E.D. La.).

Teva Pharmaceuticals USA Inc. has agreed to pay a $2.25 million civil penalty to settle alleged violations of the federal Clean Air Act (CAA), Clean Water Act (CWA), and the Resource Conservation and Recovery Act (RCRA), as well as the Missouri Air Conservation Law, Clean Water Law and Hazardous Waste Management Law at its facility in Mexico, Mo., announced the Department of Justice, the Environmental Protection Agency (EPA) and the Missouri Department of Natural Resources today. 

A 2007 inspection of the Missouri facility revealed violations of the CAA.  The violations included failure to control emissions of hazardous air pollutants from wastewater and failure to comply with regulations designed to prevent leaks of air pollutants from equipment at the facility.

In 2007, an EPA inspection found the Teva facility was discharging pollutants above permitted levels established by the City of Mexico’s Pretreatment Program, in violation of the CWA. In some cases, these pollutants were causing interference with the city’s ability to treat its domestic sewage, leading to pollutant discharges into the Salt River.  A 2008 inspection found that Teva was discharging a green effluent that ultimately discolored a portion of the Salt River in November and December 2008.

In 2009, an inspection by the Missouri Department of Natural Resources uncovered various RCRA violations.  These violations included failure to determine if waste was hazardous, illegal storage of hazardous waste, failure to comply with labeling requirements and offering hazardous waste for transport without a manifest.

“This settlement penalizes Teva for multiple violations of U.S. environmental laws when it allowed excess emissions of hazardous air pollutants from Teva’s wastewater treatment facility and excess discharges of pollutants into the City of Mexico, Missouri’s wastewater treatment facility,” said Ignacia S. Moreno, the Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “The agreement is protective of human health and the environment because it requires Teva to offset its excess emissions, install modern equipment that will increase the recovery and reuse of hazardous pollutants and reduce air emissions, as well as enhance its leak prevention capability.”

“With numerous violations over a period of years, Teva’s actions resulted in significant environmental damage to the air and water,” said EPA Region 7 Administrator Karl Brooks.  “The penalty and injunctive relief required by this agreement send a strong message to Teva and others that businesses must comply with environmental laws.”

Teva’s $2.25 million penalty includes a $1.125 million payment to the U.S. Treasury and a $1.125 million payment to the State of Missouri.

In addition to the penalty, Teva will complete other actions at the facility valued at approximately $2.5 million.  These include the installation of equipment to recover and reuse approximately 59.5 tons of methylene chloride and reduce other emissions by 19 tons over a five-year period.  Teva will also conduct an audit to identify past causes of CWA violations, implement a program to prevent leaks of hazardous air pollutants at the facility, take actions to prevent future violations and implement an Environmental Management System with third party monitoring.

As a result of this Consent Decree, Teva has certified that it is in full compliance with CAA, CWA and RCRA regulations. 
  
The proposed settlement will be lodged in the U.S. District Court for the Eastern District of Missouri and is subject to a public comment period and final court approval. The consent decree can be viewed at the Department of Justice website: www.justice.gov/enrd/Consent_Decrees.html
 
Learn more about EPA’s civil enforcement of the Clean Air Act:  www.epa.gov/air/caa/
 
Learn more about EPA’s civil enforcement of the Clean Water Act:  www.epa.gov/compliance/civil/cwa/index.html
 
Learn more about EPA’s civil enforcement of RCRA:  www.epa.gov/compliance/civil/rcra/index.html

The Justice Department announced today that it has opened a pattern or practice investigation into use of force by the Cleveland Division of Police (CPD). The investigation will focus on allegations that CPD officers use excessive force, including unreasonable deadly force, and on the adequacy of CPD’s training, supervision, and accountability mechanisms that are essential to effective, constitutional policing.

The Justice Department’s investigation will determine whether CPD officers engage in a pattern or practice of using excessive force in violation of the Constitution and federal law. This investigation will include a comprehensive review of CPD’s policies, procedures, training, accountability systems, and community engagement. As part of this investigation, the Justice Department will reach out to community members and groups for help in identifying potential problems within the police department.

Department officials have met with Cleveland Mayor Frank Jackson, CPD Chief Michael McGrath, and Director of Public Safety Martin Flask and will continue to work closely with both the city and CPD as the investigation progresses.

“Police officers across the country are called upon to protect and safeguard members of their communities and are afforded the authority they need to do so, including the authority to use deadly force,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “It is absolutely imperative that officers use that authority responsibly and within the boundaries of the law. We are eager to work together with the city of Cleveland and its police department to help ensure that its officers are best serving the individuals they are sworn to protect.”

“As we begin this process, our commitment to this community and this city is to conduct a thorough and fair investigation,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “Our joint goal cannot be to invent tough issues, nor can we hide from them if they exist. The Mayor, among others, requested this investigation, and we hope that with the continued cooperation of the city and the community we can ensure Cleveland’s residents receive top notch police protection.”

The Violent Crime Control and Law Enforcement Act of 1994 prohibits state and local governments from engaging in a pattern or practice of misconduct by law enforcement officers that deprives individuals of federally-protected rights. The act also allows the Justice Department to remedy such misconduct through civil litigation. The Justice Department has conducted similar investigations and has obtained important reforms in police departments and law enforcement agencies across the country.

The Special Litigation Section of the Justice Department’s Civil Rights Division, in Washington, D.C., and the U.S. Attorney’s Office for the Northern District of Ohio, in Cleveland, are jointly conducting this investigation. Individuals with relevant information are encouraged to contact the Justice Department via email at community.cleveland@usdoj.gov or by phone at (202) 307-6479.

Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt . Additional information about the U.S. Attorney’s Office for the Northern District of Ohio is available on its website at www.justice.gov/usao/ohn .

Related Materials:

Assistant Attorney General Thomas E. Perez Speaks at the Cleveland Police Department Press Conference

A Texas doctor was sentenced today to serve 63 months in prison for conspiring to commit health care fraud by falsifying plans of care for Medicare beneficiaries, including patients whom he did not treat, as part of a $17.3 million Medicare fraud scheme.

Today’s sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent in Charge Mike Fields of the Dallas Regional Office of U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG), Office of Investigations; and the Texas Attorney General’s Medicaid Fraud Control Unit. 

 Ben Harris Echols, 63, of Houston, was sentenced by U.S. District Judge Sim Lake of the Southern District of Texas.  In addition to his prison term, Echols was sentenced to serve three years of supervised release and ordered to pay $2,918,830 in restitution.
               
After a four-day trial, a jury convicted Echols on Dec. 13, 2012, of one count of conspiracy to commit health care fraud and six counts of false statements relating to health care matters.

According to evidence presented at trial, Echols was a physician practicing in the Houston area.  Evidence showed that Echols signed plans of care for Medicare beneficiaries so that fraudulent claims could be billed by home health care companies Family Healthcare Group Inc. and Houston Compassionate Care.  Echols signed plans of care for Medicare beneficiaries who were not under his care and about whose conditions he had no knowledge.  In many instances, Echols signed plans of care even though other doctors were listed as the attending physician on the documents. 

Evidence presented at trial showed that Family Healthcare Group Inc. and Houston Compassionate Care fraudulently billed Medicare for home health services and were paid approximately $17.3 million by Medicare, including $5.5 million for beneficiaries for whom Echols signed a plan of care.

The case was prosecuted by Trial Attorneys Alexander H. Berlin, Abigail B. Taylor and Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section, with assistance from Criminal Division Trial Attorneys Kyle Maurer and Alison Anderson.  The case was investigated by the FBI, HHS-OIG, and the Texas Attorney General’s Medicaid Fraud Control Unit.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

 A former web producer for a Tribune Company-owned television station in Sacramento, Calif., was charged today in an indictment for allegedly conspiring with members of the hacker group “Anonymous” to hack into and alter a Tribune Company website, the Justice Department announced.
 
 Matthew Keys, 26, of Secaucus, N.J., was charged in the Eastern District of California with one count each of conspiracy to transmit information to damage a protected computer, transmitting information to damage a protected computer and attempted transmission of information to damage a protected computer. 
 
 Keys was employed by Sacramento-based television station KTXL FOX 40, as its web producer, but was terminated in late October 2010.
 
 The three-count indictment alleges that in December 2010 Keys provided members of the hacker group Anonymous with log-in credentials for a computer server belonging to KTXL FOX 40’s corporate parent, the Tribune Company.  According to the indictment, Keys identified himself on an Internet chat forum as a former Tribune Company employee and provided members of Anonymous with a login and password to the Tribune Company server.  After providing log-in credentials, Keys allegedly encouraged the Anonymous members to disrupt the website.  According to the indictment, at least one of the computer hackers used the credentials provided by Keys to log into the Tribune Company server, and ultimately that hacker made changes to the web version of a Los Angeles Times news feature.
 
 The indictment further alleges that Keys had a conversation with the hacker who claimed credit for the defacement of the Los Angeles Times website.  The hacker allegedly told Keys that Tribune Company system administrators had thwarted his efforts and locked him out.  Keys allegedly attempted to regain access for that hacker, and when he learned that the hacker had made changes to a Los Angeles Times page, Keys responded, “nice.”
 
 Each of the two substantive counts carry a maximum penalty of 10 years in prison, three years of supervised release and a fine of $250,000.  The conspiracy count carries a maximum penalty of five years in prison, three years of supervised release and a fine of $250,000.
 
 The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
 
 This case was investigated by the Sacramento and Los Angeles Field Offices of the FBI.  The case is being prosecuted by the Criminal Division’s Computer Crime and Intellectual Property Section and the U.S. Attorney’s Office for the Eastern District of California.

A federal court has permanently barred Crystal Ireland, of Detroit, who does business as Master Mind Preparation, from preparing federal tax returns that claim the earned income tax credit, the Justice Department announced today. The civil injunction order, to which Ireland consented, was signed by Judge Bernard Friedman of the U.S. District Court for the Eastern District of Michigan.

The complaint in the case alleged that Ireland failed to comply with due diligence requirements imposed by federal law on tax preparers who claim the earned income credit on customers’ returns. According to the complaint, Ireland fabricated businesses and reported fake business income on her customers’ tax returns in order to claim the maximum credit for them.

The complaint alleged that the Internal Revenue Service penalized Ireland in 2010 for failing to comply with federal law due diligence requirements, yet a 2011 follow-up investigation revealed ongoing failures and fraudulent claims. According to the complaint, Ireland prepared at least 2,300 returns from 2008 through 2011, with unusually high refund rates ranging from 97 to 99 percent for those years.

The permanent injunction order also bars Ireland from preparing forms Schedule C on which she knowingly fabricates income or expenses, preparing tax returns on which she knowingly claims a dependent that does not actually qualify as a dependent of the taxpayer, and preparing tax returns on which she fails to identify herself as the paid preparer or falsely identifies someone else as the paid preparer.

In the past decade the Justice Department’s Tax Division has obtained injunctions against hundreds of tax return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.

Related Materials:

United States v. Crystal E. Ireland, etc.
Order of Permanent Injunction Against Crystal E. Ireland (PDF)

Eight individuals face federal charges stemming from a joint U.S. Fish and Wildlife Service and Missouri Department of Conservation investigation of interstate and international trafficking in paddlefish “caviar,” the Department of Justice Environment and Natural Resources Division and the U.S. Attorney for the Western District of Missouri announced.  Arkadiy Lvovskiy, Dmitri Elitchev, Artour Magdessian, Felix Baravik, Petr Babenko, Bogdan Nahapetyan, Fedor Pakhnyuk and Andrew Praskovsky have been charged in four, separate indictments in the Western District of Missouri for acts that occurred in 2011 and 2012.

The American paddlefish (Polydon spathula), also called the Mississippi paddlefish or the “spoonbill,” is a freshwater fish that is primarily found in the Mississippi River drainage system.  Paddlefish eggs are marketed as caviar.  Paddlefish were once common in waters throughout the Midwest.  However, the global decline in other caviar sources, such as sturgeon, has led to an increased demand for paddlefish caviar.  This increased demand has led to over-fishing of paddlefish, and consequent decline of the paddlefish population.

Missouri law prohibits the transportation of paddlefish eggs which have been removed or extracted from a paddlefish carcass.  Missouri law also prohibits the sale or purchase, or offer of sale or purchase, of paddlefish eggs. There are also several restrictions on the purchase and possession of whole paddlefish in Missouri.

Among other things, the Lacey Act makes it unlawful for any person to import, export, transport, sell, receive, acquire or purchase fish that were taken, possessed, transported or sold in violation of any law or regulation of any state, or to attempt to do so. Such conduct constitutes a felony crime if the defendant knowingly engaged in conduct involving the purchase or sale, offer to purchase or sell or intent to purchase or sell, fish with a market value in excess of $350, knowing that the fish were taken, possessed, transported or sold in violation of, or in a manner unlawful under, a law or regulation of any state.

Arkadiy Lvovskiy, 51, of Aurora, Colo., Dmitri Elitchev, 46, of Centennial, Colo., Artour Magdessian, 46, of Lone Tree, Colo., and Felix Baravik, 48, of Aurora, Colo., were charged with conspiring with each other, and others, to violate the Lacey Act, and with trafficking in paddlefish and paddlefish eggs in violation of the Lacey Act.  The indictment alleges that in the spring of 2011 and 2012, the defendants traveled to Warsaw, Mo., where they engaged in multiple, illegal purchases of paddlefish and processed the eggs from those paddlefish into caviar.  After processing the paddlefish eggs into caviar, the defendants transported the caviar from Missouri to Colorado.  The indictment further alleges that, during the interstate transportation, the defendants engaged in counter-surveillance efforts in order to avoid being detected.

Petr Babenko, 42, of Vineland, N.J., and  Bogdan Nahapetyan, 33, of Lake Ozark, Mo., were charged with conspiring with each other and other individuals  to violate the Lacey Act, and with trafficking in paddlefish and paddlefish eggs in violation of the Lacey Act.  The indictment alleges that between March and April 2012, the defendants traveled to Warsaw where they engaged in multiple, illegal purchases of paddlefish and processed the eggs from those paddlefish into caviar.  After processing the paddlefish eggs into caviar, they transported the caviar from Missouri to New Jersey. 

Fedor Pakhnyuk, 39, of Hinsdale, Ill., is charged with two counts of trafficking in paddlefish and paddlefish eggs in violation of the Lacey Act.  According to the indictment, in the spring of 2011 and 2012 Pakhnyuk traveled from Illinois to Missouri for the purpose of obtaining paddlefish eggs.  The indictment alleges that Pakhnyuk procured paddlefish eggs by purchasing them, and by performing processing services for other persons in exchange for a share of the processed eggs.  After processing the paddlefish eggs into caviar, Pakhnyuk transported the caviar from Missouri to Illinois.  The indictment alleges that Pakhnyuk also attempted to form an enterprise with other individuals that would market processed paddlefish caviar at markets in Chicago, Illinois.

Andrew Praskovsky, 40, of Erie, Colo., is charged with two counts of trafficking in paddlefish and paddlefish eggs in violation of the Lacey Act.  According to the indictment, in March and April 2012, Praskovsky twice traveled to Warsaw for the purpose of purchasing paddlefish.  After processing the paddlefish eggs into caviar, Pakhnyuk transported the caviar from Missouri to Kansas.  The indictment alleges that, in April 2012, Praskovsky attempted to export some of the paddlefish eggs in checked luggage on an international flight departing from Dulles International Airport in Washington, D.C.  The paddlefish eggs were seized at Dulles, as paddlefish eggs may only be exported if they are accompanied by a valid permit issued by the U.S. Fish & Wildlife Service under the Convention for International Trade in Endangered Species (CITES).

If convicted, the individual defendants face a maximum penalty of five years in prison, and a $250,000 fine per count, as well as forfeiture of any vehicles that were used during the commission of the crimes.

The case was investigated by the U.S. Fish and Wildlife Service and the Missouri Department of Conservation, with assistance by the Oklahoma Department of Wildlife Conservation. The case is being prosecuted by Trial Attorneys James B. Nelson and Adam C. Cullman of the Department of Justice’s Environmental Crimes Section and Supervisory Assistant U.S. Attorney Lawrence E. Miller of the U.S. Attorney’s Office for the Western District of Missouri.

An indictment is a formal accusation and is not proof of guilt. Defendants are presumed innocent until and unless they are found guilty.

John Hall, 27, an Aryan Brotherhood member and inmate at the Federal Correctional Institution (FCI) in Seagoville, Texas, was sentenced today by U.S. District Judge Reed O’Connor after pleading guilty to violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act stemming from his assault of a fellow inmate, whom he believed to be gay, the Department of Justice announced. Hall assaulted his fellow inmate with a dangerous weapon, causing bodily injury to the victim on Dec. 20, 2011. Hall was sentenced to serve 71 months in prison to be served consecutively with the sentence he is currently serving.

The assault occurred on Dec. 20, 2011, inside the FCI Seagoville when Hall targeted and attacked the victim, a fellow inmate, because he believed the victim was gay or involved in a sexual relationship with another male inmate. Hall repeatedly punched, kicked and stomped on the victim’s face with his shod feet, a dangerous weapon, while yelling a homophobic slur. The victim lost consciousness during the assault and suffered multiple lacerations to his face. The victim also sustained a fractured eye socket, lost a tooth, fractured other teeth and was treated at a hospital for the injuries he sustained during Hall’s unprovoked attack. Hall pleaded guilty to violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act on Nov. 8, 2012.

“Brutality and violence based on sexual orientation has no place in a civilized society,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to using all the tools in our law enforcement arsenal, including the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, to prosecute acts motivated by hate.”

“This prosecution sends a clear message that this office, in partnership with attorneys in the department’s Civil Rights Division, will prioritize and aggressively prosecute hate crimes and others civil rights violations in North Texas,” said U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

This case was investigated by the FBI Dallas Division. The case was prosecuted by Assistant U.S. Attorney Errin Martin and Trial Attorney Adriana Vieco of the Civil Rights Division.

Vice President Joe Biden and Attorney General Eric Holder today announced grants to 12 programs across the country to target the urgent need to reduce domestic violence homicides.  On average, three women a day die as a result of domestic violence   Research shows that women whose partner threatens them with a gun or other weapon are 20 times more likely to subsequently be murdered than other abused women.  Moreover, children, coworkers, neighbors and police officers are also killed as a result of domestic violence. From 2009 to 2012, 40 percent of mass shootings – those with four or more victims killed – started with the murderer targeting their girlfriend, wife or ex-wife. 

In total, the Department of Justice will award $2.3 million to 12 sites across the country as part of the new Domestic Violence Homicide Prevention Demonstration Initiative (DVHP Initiative).  The DVHP Initiative, created by the Justice Department’s Office on Violence Against Women, (OVW) helps state and local jurisdictions reduce domestic violence homicides by effectively identifying potential victims and monitoring high-risk offenders.  The DVHP Initiative is modeled after programs in Massachusetts and Maryland, where the use of coordinated teams of law enforcement, prosecutors, health professionals and victims’ services significantly reduced the domestic violence homicide rate. 

“Every single day in America, three women die at the hands of their boyfriend, or their husband, or their ex-husband. Many of these women have been threatened or severely abused in the past. We know what risk factors put someone in greater danger of being killed by the person they love – and that also means we have the opportunity to step in and try to prevent these murders. That’s why these grants are so important. They’ll help stop violence before it turns deadly,” said Vice President Biden.

 “Domestic violence is a devastating crime – and it claims far too many lives each and every day,” said Attorney General Holder.  “With today’s grant announcement, we are strengthening our ability to fight back more effectively – and aggressively – than ever before.  And we’re supporting the kinds of evidence-based domestic violence homicide prevention models that will allow us to reliably predict potentially lethal behavior, take steps to stop the escalation of violence and save lives.”

 The Vice President and Attorney General announced the grant awards in Rockville, Md., where they were joined by dozens of Maryland law enforcement officers who have been at the forefront of domestic violence homicide prevention efforts in that state.

“While the statistics seem overwhelming, we are not helpless in the face of these terrible crimes,” said Acting Director of Office on Violence Against Women Bea Hanson. “We hope this evidence-based initiative to reduce domestic violence homicide is a breakthrough in preventing murders and serious injuries across the country.”

The new DVHP Initiative is based on an assessment tool that researchers have identified that can be used to reliably recognize women who may be in fatally abusive relationships.  Attempted strangulation, threats with weapons, sexual assault and obsessively jealous and controlling behavior are among the markers of particularly lethal abusers.  Once at-risk victims are identified, law enforcement, prosecutors, courts and service providers can take action to protect them and their families. 

Since passage of the Violence Against Women Act (VAWA) in 1994, annual rates of domestic violence have dropped by more than 60 percent, but more work remains to reduce the most serious of this violence.  OVW is partnering with the National Institute of Justice to rigorously monitor the implementation of the initiative and evaluate its outcomes. OVW is also working with national experts to provide technical assistance to the demonstration sites. 

The demonstration sites, each receiving one-year awards ranging from $100,658 to $200,000, are: Contra Costa County, Calif.; Miami-Dade County, Fla.; Palm Beach County, Fla.; Rockdale County, Ga.; Winnebago County, Ill.; Boston; Brooklyn, N.Y.; Westchester County, N.Y.; Pitt County, N.C.; Cuyahoga County, Ohio; North Charleston, S.C.; and Rutland, Vt.  After the 12-month assessment phase, up to six of the demonstration sites will be selected to continue a three-year implementation phase.

Click HERE for the fact sheet the Obama Administration’s commitment to reducing domestic violence homicides.  

Click HERE for the fact sheet on the link between common sense efforts to reduce gun violence and preventing domestic violence homicides.

Related Materials:

Attorney General Eric Holder Speaks at the Domestic Violence Homicide Prevention Initiative Announcement

Bruce King, the founder and operator of Premier Tax, was sentenced today in Montgomery, Ala., to 70 months in prison and ordered to pay $781,305 in restitution to the Internal Revenue Service (IRS) for orchestrating a tax fraud scheme at his business, the Justice Department and the IRS announced. King had previously pleaded guilty to charges of conspiring to defraud the United States and filing false tax returns.

According to court documents, Premier Tax was a tax preparation business operated by King that had several locations in Alabama and Georgia. King held training sessions in which he taught preparers how to falsify tax returns in order to fraudulently increase clients’ tax refunds. Those he taught went on to work at Premier Tax and filed numerous false tax returns. According to court documents, the tax loss caused by these fraudulent returns exceeded $1 million. To date, seven return preparers trained by King have also pleaded guilty and been sentenced.

This case was investigated by special agents of the IRS - Criminal Investigation. Trial Attorneys Jason Poole and Justin Gelfand of the Justice Department’s Tax Division and Assistant U.S. Attorney Jared Morris are prosecuting this case.

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

Norman Teltow, owner of Gold Metal Paint Co. LLC (GMP), pleaded guilty late yesterday in Denver to a criminal information charging him with illegally treating hazardous waste at the company’s facility, the Justice Department announced.  Teltow, who will be sentenced on June 10, 2013, faces a maximum sentence of five years in prison, a $250,000 fine, and three years of supervised release.
 
Teltow operated GMP out of a hangar near the Front Range Airport in Watkins, Colo.  GMP was primarily in the business of painting small aircraft.  During the course of its business, GMP created hazardous waste in the form of spent methylene chloride-based solvents mixed with paint waste.  Methylene chloride, a listed hazardous waste, is both ignitable and toxic.  Moreover, exposure to methylene chloride can cause skin irritation, headache, dizziness, nausea, and vomiting. 
 
Under the Resource Conservation and Recovery Act, GMP was required to use a licensed waste management company to transport the hazardous waste to a licensed facility for disposal.  To avoid the costs associated with proper disposal, Teltow directed GMP employees to store the spent solvents in an underground tank below the facility, knowing that it was illegal to store the waste in that manner. 

When the Colorado Department of Public Health and Environment (CDPHE) became aware that Teltow and GMP were storing hazardous waste in an underground tank, the agency conducted an inspection and ordered Teltow to hire a licensed waste management company to pump the waste out of the tank and dispose of it properly.  CDPHE further ordered that the tank be cleaned, that the trench drain leading to the underground tank be sealed, and that GMP use a licensed waste management company to transport all hazardous waste in the future.  In response to CDPHE’s orders, Teltow hired a licensed waste management company to pump out the tank, and sealed off the trench drain to the underground tank.  However, rather than hire a licensed waste management company to clean out the tank, Teltow ordered subordinate employees to clean out the tank without the benefit of any personal protective equipment.  The employees were exposed to hazardous waste containing methylene chloride, and suffered from headaches, dizziness, and nausea.  

Teltow then devised a new plan for treating GMP’s hazardous waste by “evaporating” it into the atmosphere.  Teltow ordered subordinate GMP employees to pour the hazardous waste onto the floor of the hangar at the end of the work day.  Workers would then leave the hangar doors ajar and allow the methylene-chloride waste to evaporate.  Teltow knew that it was illegal to treat the hazardous waste in this manner.   When Teltow’s “evaporation” method was unsuccessful at treating all of the waste that GMP accumulated, Teltow drilled open the trench drain so that the waste could again flow into the underground tank. 

“The illegal handling of hazardous waste threatens public safety and the environment and puts workers in harms way,” said Jeffrey Martinez, Special Agent in Charge of EPA’s criminal enforcement program in Colorado.  “The defendant admits that he attempted to make hazardous waste ‘disappear’ by ordering his workers to allow spent solvents to evaporate and to clean up hazardous chemicals without protective safety gear, putting the workers at great risk.  Although this case centers on the illegal treatment of hazardous materials, it’s really about the defendant trying to save a buck by cutting corners.”

The investigation was conducted by the Environmental Protection Agency, Criminal Investigation Division, with assistance from inspectors at the Occupational Safety and Health Administration and CDPHE.  The case was prosecuted by James B. Nelson of the Department of Justice’s Environmental Crimes Section

The Justice Department announced today that, as part of its Barrier-Free Health Care Initiative, it has reached a settlement with Glenbeigh Hospital of Rock Creek, Ohio, under the Americans with Disabilities Act (ADA).  The settlement resolves allegations that Glenbeigh violated the ADA by denying admission to someone because of HIV.  This is the fourth settlement that the Justice Department has reached in six weeks addressing HIV discrimination by a medical provider.

The Justice Department found that Glenbeigh unlawfully refused to admit someone with HIV into its alcohol treatment program because of the side effects of his HIV medication. Glenbeigh’s alcohol treatment program consists of helping patients through the physical aspects of recovery, as well as providing counseling and incorporating spiritual healing. The department determined that Glenbeigh cannot show that treating the complainant would have posed a direct threat to the health or safety of others.

“Ensuring access to medical care for people with HIV requires that those in the medical field make medical decisions that are not based on fears or stereotypes,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The ADA does not tolerate HIV discrimination and neither will the Justice Department.”

“Our office is committed to vigorously enforcing the ADA, including for those with HIV,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “This settlement should send a clear message that those with HIV are entitled to the same services, including medical treatment, as everyone else.”

Under the settlement, Glenbeigh must pay $32,500 to the complainant and $5,000 in civil penalties.  In addition, Glenbeigh must train its staff on the ADA and develop and implement an anti-discrimination policy. 

In the past five weeks, the department announced similar agreements with Woodlawn Family Dentistry, the Castlewood Treatment Center, and the Fayetteville Pain Center to address HIV discrimination. All four settlements are part of the Department of Justice’s Barrier-Free Health Care Initiative, a partnership of the Civil Rights Division and U.S. Attorney’s offices across the nation, to target enforcement efforts on a critical area for individuals with disabilities. The initiative, launched on the 22nd anniversary of the ADA in July 2012, includes the participation of 40 U.S. Attorney’s offices. The division expects the initiative to address access to health care for people with HIV and those with hearing disabilities, as well as physical access to medical facilities. In 2012, the division and U.S. Attorneys offices reached two settlement agreements regarding access to medical care for people with HIV and four settlements regarding access to medical care for people with hearing disabilities. For more information on the Barrier Free Health Care Initiative visit www.ada.gov/usao-agreements.htm .

For more information on the ADA and HIV, visit www.ada.gov/aids .   Those interested in finding out more about these settlements or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov .  ADA complaints may be filed by email to ada.complaint@usdoj.gov .

Veteran District of Columbia defense attorney Charles F. Daum was sentenced today to serve 63 months in prison on three counts of obstructing justice in a federal drug trafficking case, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Chief Cathy L. Lanier of the Washington, D.C., Metropolitan Police Department; and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office. 

Daum, 66, of Arnold, Md., was sentenced before Senior U.S. District Judge Gladys Kessler in the District of Columbia.  In addition to Daum’s prison sentence for obstruction of justice, he was sentenced to a concurrent term of 60 months in prison on one count of conspiracy to obstruct justice and two counts of subornation of perjury.  Daum was also sentenced to serve one year of supervised release. 

“Daum went to extraordinary lengths to purposefully subvert the legal process in his client’s case,” said Acting Assistant Attorney General Raman.  “He fabricated evidence and knowingly presented perjured testimony, betraying his profession and our system of justice.  Today’s significant prison sentence is appropriate punishment for his crimes.”

“Through a scheme of his own design, Mr. Daum purposefully concocted false evidence and submitted it to the court,” said Assistant Director in Charge Parlave.  “Today’s sentence demonstrates our diligence in protecting our judicial system from those individuals who attempt to violate its integrity.”

 The charges resulted from Daum’s representation of Delante White, who was indicted in March 2008 by the U.S. Attorney’s Office for the District of Columbia on federal drug trafficking charges following the execution of a search warrant on Feb. 23, 2008, at the home of White’s grandmother.  After a six-week bench trial, Judge Kessler found beyond a reasonable doubt that after entering his notice of appearance in the case, Daum devised a plan to obtain and produce false evidence designed to convince the jury that the drugs seized by the police on Feb. 23, 2008, did not belong to White.  Daum enlisted the help of co-conspirators Daaiyah and Iman Pasha, whom Daum had hired as investigators, and others to help carry out his scheme.  Following Daum’s directions, the co-conspirators obtained duplicates of several items that were seized as evidence during the execution of the search warrant, including a digital scale, a razor blade, plates, an Adidas shoe box and a pair of Gucci boots.  Once those items were obtained, Daaiyah and Iman Pasha made arrangements to take staged photographs of White’s brother depicted with the items, while apparently “cutting” “rock cocaine” in order to make it appear as though the seized drugs actually belonged to the brother.  Daum later submitted the staged photographs, as well as other fabricated items, as evidence during White’s criminal trial.   Judge Kessler also found that Daum solicited and presented the perjured testimony of two witnesses, in order to further obstruct and impede the administration of justice.

Private investigators Daaiyah Pasha, 62, of Washington, D.C., and Iman Pasha, 33, of Springfield, Va., were also sentenced today by Judge Kessler.  Daaiyah Pasha was sentenced to serve three months in prison and three years of supervised release.  Iman Pasha was sentenced to serve three months probation.

 The case was prosecuted by Trial Attorneys Darrin L. McCullough, Donnell Turner and Tritia Yuen of the Criminal Division’s Narcotic and Dangerous Drug Section.  The case was investigated by the Washington, D.C., Metropolitan Police Department, the FBI and the U.S. Attorney’s Office for the District of Columbia.

A federal court has granted the United States’ request to permanently bar James M. Unterreiner II from preparing tax returns, the Justice Department announced today. According to the government complaint, from 2002 until 2003, Unterreiner worked for Tax Resolutions Inc., where he assisted owner Irvin H. Catlett Jr. and others in marketing a tax evasion scheme in which Tax Resolutions’ clients made investments in various sham companies and reported bogus tax losses. Unterreiner consented to the injunction.

As the Justice Department previously announced , testimony heard at Catlett’s nine-day criminal trial in 2010 showed that Tax Resolutions prepared fraudulent tax returns for its clients that included fictitious business losses which Tax Resolutions falsely claimed resulted from automobile leasing and sales. The fake losses reduced the amount of taxable income and total tax reported by Tax Resolutions’ clients. As a result, the clients falsely claimed refunds from the Internal Revenue Service (IRS).

Testimony at that trial also showed that Unterreiner assisted Catlett and helped perpetuate the scheme by preparing client tax returns by first determining each client’s tax and then adding to the return a fictitious loss from a tax shelter entity large enough to reduce the client’s tax due to zero. Unterreiner continued the scheme even after Catlett was imprisoned on other charges. As a result of the scheme, approximately 275 tax returns were filed with the IRS which reported bogus losses, resulting in a tax loss to the United States in excess of $3 million.

In addition to barring Unterreiner from preparing tax returns for life, the injunction also bars Unterreiner from representing others before the IRS, as well as the a dvising, assisting, counseling, or instruction of anyone about the preparation of any federal income tax return.

Related Materials:

United States v. James M. Unterreiner II
Complaint (PDF)
Stipulation for Final Permanent Injunction and Order (PDF)
 

WASHINGTON – The Department of Justice’s Antitrust Division issued the following statement today in connection with the closing of its investigation into the proposed transaction that would combine T-Mobile USA Inc. and MetroPCS Communications Inc.: After a thorough review of the proposed transaction, the Antitrust Division has determined that the combination of T-Mobile and MetroPCS is unlikely to harm consumers or substantially lessen competition and has closed its investigation.

In this transaction, T-Mobile–one of four nationwide providers of mobile wireless services–will merge with MetroPCS, a provider in only certain regions of the country.  As the department alleged in its 2011 case challenging the proposed merger of AT&T Inc. and T-Mobile, many dimensions of competition in the mobile wireless industry take place at a national level, including plan pricing, device offerings and network technology.  Like many local and regional providers, MetroPCS faces limitations, stemming from its lack of nationwide spectrum, networks and scale, and therefore exerts little influence on these aspects of mobile wireless competition.

The department considered whether the proposed combination of T-Mobile and MetroPCS might tend to lessen competition substantially in any particular local area, for instance by combining the two carriers with the best local coverage.  MetroPCS has a network based on high frequency spectrum (i.e. advanced wireless services (AWS) and personal communications services (PCS) spectrum) that is less able to cover rural areas or penetrate buildings.  It does not provide a particularly unique and competitively significant differentiated offering in the regions in which it operates.  Each of the markets served by MetroPCS is also served by all four national carriers.  Accordingly, the transaction is not likely to lessen competition substantially at local levels.

Finally, the proposed combination of T-Mobile and MetroPCS may have a procompetitive impact in that it improves T-Mobile’s scale and spectrum position, particularly since MetroPCS’s spectrum holdings are compatible with T-Mobile’s existing network.

The department said that it will continue to monitor competition in the mobile wireless industry and to bring enforcement actions where warranted. 

 
T-Mobile is a Delaware corporation headquartered in Bellevue, Wash.  T-Mobile is the fourth-largest mobile wireless telecommunications services provider in the United States as measured by subscribers, and serves approximately 33.3 million wireless connections to wireless devices.  In 2012, T-Mobile earned mobile wireless telecommunications services revenues of approximately $17.2 billion.  T-Mobile is a wholly-owned subsidiary of Deutsche Telekom AG.

Deutsche Telekom AG is a German corporation headquartered in Bonn, Germany.  It is the largest telecommunications operator in Europe with wireline and wireless interests in numerous countries and total annual revenues in 2011 of €58.7 billion.

MetroPCS is a Delaware corporation headquartered in Richardson, Texas.  It is the fifth-largest mobile wireless telecommunications provider in the United States as measured by subscribers, and serves approximately 8.9 million customers.  In 2011, MetroPCS earned mobile wireless telecommunications services revenues of $4.8 billion.

The division provides this statement under its policy of issuing statements concerning the closing of investigations in appropriate cases. This statement is limited by the division’s obligation to protect the confidentiality of certain information obtained in its investigations. As in most of its investigations, the division’s evaluation has been highly fact-specific, and many of the relevant underlying facts are not public. Consequently, readers should not draw overly broad conclusions regarding how the division is likely in the future to analyze other collaborations or activities, or transactions involving particular firms. Enforcement decisions are made on a case-by-case basis, and the analysis and conclusions discussed in this statement do not bind the division in any future enforcement actions. Guidance on the division’s policy regarding closing statements is available at: www.usdoj.gov/atr/public/guidelines/201888.htm.

A federal district judge in Miami permanently barred Marlen Monzon, her son Yanko Rodriguez, and their Miami business, Tri Stars Multiservices Corporation, from preparing federal income tax returns for others, the Justice Department announced today.

According to the government’s complaint, Monzon and Rodriguez prepared federal income tax returns in Miami through Tri Stars Multiservices, Corporation. As alleged, the returns prepared by Monzon and Rodriguez included fabricated claims for business expenses on customers’ returns even when the customers did not own or operate a business. The complaint further alleged that these fabricated expenses offset the customer’s wage income and improperly lowered the customer’s reported taxable income. These fabricated expenses generated (or increased) customers’ refunds, and often qualified customers for credits to which they were not entitled. The complaint alleged that nearly every one of the 498 returns that the Internal Revenue Service (IRS) examined for tax years 2008 through 2011 claimed that the customer operated a business and reported a business loss. According to the complaint, the IRS has determined that the U.S. Treasury lost more than $3.4 million in revenue as a result of Monzon and Rodriguez’s misconduct.

Monzon, Rodriguez and Tri Stars consented to the entry of the injunction.

In the past 10 years the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Website .

Related Materials:

United States v. Thomas G. Bandzul
Permanent Injunction (PDF)

NEW YORK -- Immigration Judge George Chew 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 March 8, 2013. The New York District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.

Biographical Information

Attorney General Janet Reno appointed Judge Chew in September 1995. Judge Chew received a bachelor of arts degree in 1972 from City College of New York and a juris doctorate in 1979 from Antioch School of Law. From 1985 to 1995, he was in private practice in New York. From 1981 to 1984, Judge Chew was a partner with the Law Offices of Wong & Chew, also in New York. From 1979 to 1981, he served as a trial attorney for the former Immigration and Naturalization Service in New York. Judge Chew is a member of 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.

The Justice Department announced today that it will monitor the municipal election on March 12, 2013, in the town of Guadalupe, in Maricopa County, Ariz., 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 Justice 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 Maricopa County based on the Attorney General’s certification.  The observers will watch and record activities during voting hours in the town of Guadalupe, and a Civil Rights Division attorney will coordinate the federal activities and maintain contact with local election officials.

Each year, the Justice 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 Justice Department’s 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.

A federal district judge in Jacksonville, Fla., permanently barred Thomas G. Bandzul from preparing federal income tax returns for others, the Justice Department announced today.

According to the government complaint, Bandzul repeatedly prepared federal tax returns that unlawfully understated customers’ federal tax liabilities. The suit alleged that the defendant concocted bogus losses, expenses, education credits, business expenses, and charitable contributions, which he falsely reported on his customers’ federal income tax returns.

The suit alleged that the Internal Revenue Service has examined over 250 tax returns prepared by Bandzul and found that over 90 percent of tax returns understated the taxpayer’s liability. According to the complaint, the total harm to the U.S. Treasury caused by Bandzul’s misconduct could exceed $17 million.

In addition, Bandzul allegedly filed returns that claimed a refund larger than what Bandzul had disclosed to the taxpayer. Once the refund was paid, the suit alleged, Bandzul retained the additional amount without the taxpayer’s knowledge.

Bandzul consented to the entry of the injunction.

In the past decade the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website .          

BALTIMORE --Immigration Judge John F. Gossart, Jr. from the Executive Office for Immigration Review, Baltimore Immigration Court, delivered the keynote speech and administered the oath of allegiance to approximately 75 candidates during a naturalization ceremony at the George H. Fallon Federal Building in Baltimore, Md., on March 8, 2013. The Baltimore District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.

Biographical Information

Attorney General William French Smith appointed Judge Gossart in October 1982. Judge Gossart received a bachelor of science degree in 1967 from the University of Maryland and a juris doctorate in 1974 from the University of Baltimore School of Law. From 1975 through 1982, he served in various positions at the former Immigration and Naturalization Service, including general attorney, trial attorney, and deputy assistant commissioner for naturalization. Since 1997, Judge Gossart has served as an adjunct professor of immigration law at the University of Baltimore School of Law; has been a faculty member at the National Judicial College; and has guest lectured at numerous law schools and for the Maryland Institute for Continuing Professional Education of Lawyers. From 1967 to 1969, he served in the U.S. Army. Judge Gossart is a member of the Maryland State and District of Columbia Bars.

- EOIR -

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

WASHINGTON – Two Japanese air freight forwarding companies have agreed to plead guilty and to pay criminal fines totaling $18.9 million for their roles in a conspiracy to fix certain fees in connection with the provision of air freight forwarding services for air cargo shipments from Japan to the United States, the Department of Justice announced today. “K” Line Logistics Ltd. has agreed to pay a $3,507,246 criminal fine and Yusen Logistics Co. Ltd. has agreed to pay a $15,428,207 criminal fine.

Including today’s charges, as a result of this investigation, 16 companies have either pleaded guilty or agreed to plead guilty and have agreed to pay criminal fines totaling more than $120 million.

“Consumers were forced to pay higher prices on the goods they buy every day as a result of the noncompetitive and collusive service fees charged by these companies,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Prosecuting these kinds of global, price-fixing conspiracies continues to be a top priority of the Antitrust Division.”

Freight forwarders manage the domestic and international delivery of cargo for customers by receiving, packaging, preparing and warehousing cargo freight, arranging for cargo shipment through transportation providers such as air carriers, preparing shipment documentation and providing related ancillary services.

According to charges filed separately today in the U.S. District Court for the District of Columbia, “K” Line Logistics and Yusen Logistics engaged in a conspiracy to fix and to impose certain freight forwarding service fees, including fuel surcharges and various security fees, charged to customers for services provided in connection with air freight forwarding shipments of cargo shipped by air from Japan to the United States from about September 2002 until at least November 2007.

According to the charges, the companies carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate and impose certain freight forwarding service fees and charges on customers purchasing freight forwarding services for cargo shipped by air from Japan to the United States. The department said the companies levied freight forwarding service fees in accordance with the agreements reached and engaged in meetings and discussions for the purpose of monitoring and enforcing adherence to the agreed-upon freight forwarding service fees.

Each company is charged with price fixing in violation of the Sherman Act, which carries a maximum $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charges are the result of a joint investigation being conducted by the Antitrust Division’s National Criminal Enforcement Section, the FBI’s Washington Field Office and the Department of Commerce’s Office of Inspector General. Anyone with information concerning the price fixing or other anticompetitive conduct in the freight forwarding industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contract/newcase.htm or call the FBI’s Washington Field Office at 202-278-2000.

Hungarian nationals Beatrix Boka and Aleksandar Kunkin were sentenced today to serve 36 months and 46 months in prison, respectively, for their roles in moving approximately $550,000 in illicit proceeds derived from an international online marketplace fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Jerry E. Martin for the Middle District of Tennessee. 

Boka, 34, and Kunkin, 40, were sentenced by U.S. District Judge Aleta A. Trauger in the Middle District of Tennessee.  In addition to their prison terms, Boka and Kunkin were each sentenced to serve two years of supervised release and ordered to pay $464,581 in restitution.

Boka and Kunkin each pleaded guilty in November 2012 to one count of conspiracy to commit bank and wire fraud. 

According to testimony at Boka and Kunkin’s plea hearings, members of the conspiracy fraudulently listed vehicles for sale at online marketplaces such as eBay. When victims expressed interest in purchasing the vehicles, co-conspirators sent emails that directed the victims to wire payments to certain bank accounts, and victims never received the vehicles for which they paid.  From May to June 2012, Boka and Kunkin visited Bank of America branches in North Carolina and South Carolina and opened bank accounts under false identities, which were supported by fraudulent identity documents including counterfeit Hungarian passports.  In total, 36 victims sent approximately $550,102 to accounts opened by Boka and Kunkin.  Boka and Kunkin subsequently sent the bulk of the money to co-conspirators located abroad. 

The case is being prosecuted by Assistant U.S. Attorney Byron M. Jones of the Middle District of Tennessee and Trial Attorney Mysti Degani of the Criminal Division’s Computer Crime and Intellectual Property Section.  The case is being investigated by the FBI, the Tennessee Bureau of Investigation, the Metropolitan Nashville Police Department and the Cobb County, Ga., Sheriff’s Department.

FALLS CHURCH, Va. - The Executive Office for Immigration Review (EOIR) today announced the appointment of a second deputy chief immigration judge (DCIJ). Effective March 10, 2013, Assistant Chief Immigration Judge (ACIJ) Edward F. Kelly will become a DCIJ. Judge Kelly will assume direct supervision of the program components in the Office of the Chief Immigration Judge (OCIJ), including the legal unit, the language service unit, the organizational results unit, the chief clerk, and the executive officer.

“Judge Kelly’s appointment as deputy chief immigration judge is in recognition of his tremendous contributions to OCIJ’s efficiencies and services,” said Chief Immigration Judge Brian M. O’Leary. “With his expanded role, I am confident OCIJ will continue to improve our operations and inspire our staff.”

Biographical information follows:

Attorney General Holder appointed Judge Kelly as an ACIJ in March 2011. He received a bachelor of arts degree in 1982 and a juris doctorate in 1987, both from the University of Notre Dame. From November 2009 to March 2011, Judge Kelly served as senior counsel and chief of staff for OCIJ. From 2007 to 2009, he was counsel for operations for OCIJ at EOIR. From 1998 to 2007, Judge Kelly was a senior legal advisor for the Board of Immigration Appeals (BIA), EOIR. From 1995 to 1998, he served as a supervisory attorney and team leader for the BIA. From 1989 to 1993 and again from 1994 to 1995, Judge Kelly was an attorney advisor for the BIA. From 1987 to 1989, he served as an assistant counsel, Subcommittee on Immigration, Refugees, and International Law, U.S. House of Representatives, Washington, D.C. From 1982 to 1984, he served in the U.S. Peace Corps in Gabon, Africa. Judge Kelly is a member of the Virginia 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.

FALLS CHURCH, Va. - The Executive Office for Immigration Review (EOIR) today announced an important staffing update within the Office of the Chief Immigration Judge (OCIJ). Effective March 10, 2013, Deputy Chief Immigration Judge (DCIJ) Michael C. McGoings will become a member of the Senior Executive Service, continuing to directly supervise the assistant chief immigration judges and the 58 field courts.

“I am so pleased to welcome Judge McGoings into the Senior Executive Service, a corps of government leaders who share a wealth of experience and a true commitment to public service,” said Chief Immigration Judge Brian M. O’Leary. “His well-honed executive skills and broad perspective of government will continue to benefit OCIJ.”

Biographical information follows:

Attorney General Eric Holder appointed Judge McGoings as Deputy Chief Immigration Judge in October 2009. He received a bachelor of arts degree in 1965 from Morgan State University, a master of science degree in 1967 from the University of Illinois, and a juris doctorate in 1973 from The Catholic University of America. From March 1995 to October 2009, Judge McGoings served as an Assistant Chief Immigration Judge. During this time, from February to July 2009, he served as acting Chief Immigration Judge. From 1994 to 1995, Judge McGoings was an associate general counsel serving as Chief of the Enforcement Legal Program and from 1991 to 1994, he was an associate general counsel for the Employer Sanctions and Civil Document Fraud Legal Program at the former Immigration & Naturalization Service (INS). From 1987 to 1990, he worked as assistant general counsel for the former INS. Judge McGoings is a member of the District of Columbia and Pennsylvania bars.

- EOIR -

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

The Justice Department announced today that Chattanooga, Tenn., based nursing home manager Grace Healthcare LLC and its affiliate Grace Ancillary Services LLC (collectively, Grace) have agreed to pay $2.7 million, plus interest, to resolve allegations that they violated the False Claims Act by knowingly submitting or causing the submission to the Medicare and TennCare/Medicaid programs of false claims for medically unreasonable and unnecessary rehabilitation therapy. Grace Ancillary Services LLC provided the therapy in some of the skilled nursing facilities Grace Healthcare LLC owns and/or manages in Tennessee and elsewhere.

The settlement resolves claims that in ten nursing home facilities in which Grace provided physical, occupational, and speech therapy for periods ranging from 2007 through June of 2011, Grace pressured therapists to increase the amount of therapy provided to patients in order to meet targets for Medicare revenue that were set without regard to patients’ individual therapy needs and could only be achieved by billing for a large amount of therapy per patient. As part of the settlement, Grace has agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement.

“In today’s economic climate, it is more important than ever for the United States to make sure that Medicare and Medicaid funds are spent appropriately,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “The Department of Justice will not tolerate those who abuse government health care programs by providing services based on their own financial considerations, rather than the needs of their patients.”

“The continued viability of our federal healthcare benefit programs depends, in large part, on the honesty and integrity of the program participants,” said U.S. Attorney for the Eastern District of Tennessee Bill Killian. “Health care providers must make decisions regarding the level of services to be provided based solely on individual patient need rather than a desire to increase the bottom line. As this settlement demonstrates, when aggressive business practices cross the line into waste and abuse, we are committed to working with our federal and state partners to protect public funds.”

“Medicare does not pay for medically unnecessary rehabilitation services,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta.  “The Inspector General is committed to identifying improper billing to Medicare and Medicaid and returning those dollars to the taxpayers.

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion.

The allegations settled today arose from a lawsuit filed by a former Grace employee under the qui tam, or whistleblower provisions, of the False Claims Act. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery. The whistleblower in this case will receive $405,000. The case is United States of America and State of Tennessee ex rel. Ottinger v. Grace Healthcare, LLC, Grace Ancillary Services, LLC, and John Does 1-5, No. 3:10-cv-83 (E.D. Tenn.).

The case was handled by the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Tennessee, the Office of the Inspector General of the U.S. Department of Health and Human Services, the Tennessee Attorney General’s Office, and the Tennessee Bureau of Investigation’s Medicaid Fraud Control Unit. This action was supported by the Elder Justice and Nursing Home Initiative, which coordinates the Department’s activities combating elder abuse, neglect and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid and other federal health care programs.The claims settled by this agreement are allegations only; there has been no determination of liability.

Mark E. Thom Jr., 31, a Springdale Borough, Penn., Police Officer, pleaded guilty to a one count information charging him with violating the civil rights of an individual on Jan. 23, 2011 in Springdale, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division and David J. Hickton, U.S. Attorney for the Western District of Pennsylvania.

According to the information and plea documents, on Dec. 17, 2011, Thom used excessive force on the victim during the course of making an arrest by assaulting him with his fists and deploying a Taser, all while the victim was handcuffed and not posing a threat to Thom or others. In accordance with his guilty plea, Thom admitted that his conduct amounted to a willful deprivation of the victim’s right to be free from unreasonable seizures.

“Police officers who abuse their power to assault citizens undermine the system of constitutional government they are sworn to uphold,” said Assistant Attorney General Perez. “As the plea in this case shows, the Civil Rights Division will work closely with our United States Attorneys to aggressively enforce the laws that prohibit police misconduct.”

“Thom admitted to using excessive force by punching and using a Taser against a handcuffed, non-resisting victim,” said U.S. Attorney Hickton. “Thom’s unlawful and unjustified conduct constitutes a clear deprivation of the man’s civil rights, a violation that this office takes seriously, and will vigorously investigate and prosecute.”

“The FBI holds as one of its highest priorities the investigation of civil rights violations, and the Pittsburgh Division will pursue those who are entrusted with protecting our citizenry and violate that trust. The FBI will continue to work with its law enforcement partners to ensure that justice is served,” said FBI Special Agent in Charge of the Pittsburgh Field Office G. Douglas Perdue. “I encourage the public to contact our FBI Civil Rights Public Corruption Hotline at 412-432-4122 to report any potential Civil Rights violation.”

Sentencing is scheduled for July 12, 2013. Thom faces a maximum sentence of 10 years in prison, a fine of $250,000 and three years of supervised release.

This case was investigated by the Pittsburgh Office of the FBI, and is being prosecuted by Assistant U.S. Attorney Shaun Sweeney and Civil Rights Division Trial Attorney Adriana Vieco.

Corning Incorporated has agreed to pay the U nited States $5.65 million to resolve claims that it knowingly presented false claims to the United States for laboratory research products sold to federal agencies through Corning’s Life Sciences division. Corning, a New York based corporation, creates and makes glass and ceramic components for consumer electronics, mobile emissions controls, telecommunications and life sciences.

T he settlement resolves claims relating to a contract entered into by Corning in 2005 to sell laboratory research products to federal government entities through the General Services Administration’s (GSA) Multiple Award Schedule (MAS) program. The MAS program provides the government and other General Services Administration authorized purchasers with a streamlined process for procurement of commonly-used commercial goods and services. To be awarded a MAS contract, and thereby gain access to the broad government marketplace and the ease of administration that comes from selling to hundreds of government purchasers under one central contract, contractors must agree to disclose commercial pricing policies and practices, and to abide by the contract terms.

The settlement resolves allegations that, in contract negotiations and over the course of the contract’s administration, Corning knowingly failed to meet its contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, including discounts offered to other customers, and that Corning knowingly made false statements to GSA about its sales practices and discounts . The settlement further resolves allegations that Corning knowingly failed to comply with the price reduction clause of its GSA contract by failing to disclose to GSA discounts Corning gave to its commercial customers when they were higher than the discounts that Corning had disclosed to GSA, and by failing to pass those discounts on to government customers. The United States alleged that, because of these improper dealings, it received lower discounts and ultimately paid far more than it should have for Corning products.

“This settlement shows that the United States expects all contractors participating in the MAS program to make full and accurate disclosures of their commercial pricing practices to the GSA and to act in good faith when dealing with the United States government,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice’s Civil Division. “The failure to make full and accurate disclosures material to the government’s contracting processes will not be tolerated.”

“At a time when our political leaders are making tough choices about how to rein in federal spending, government contractors need to understand that they will not get away with overbilling the taxpayer,” said U.S. Attorney for the District of Columbia Ronald C. Machen Jr.  “Companies that want to take advantage of federal contracts are obligated to deal openly and fairly with their government customers.  When contractors fail to meet their obligations, we will hold them accountable and seek to make the taxpayer whole.”

“Contractors need to be honest and follow through with their promises to the federal government – or pay the consequences," said Brian D. Miller, Inspector General for the General Services Administration.

The settlement resolves a lawsuit filed in the U.S. District Court for the District of Columbia by a former Corning Life Sciences sales representative Kevin Jones under the qui tam, or whistleblower provisions, of the False Claims Act. Under the Act, private citizens may bring suit for false claims on behalf of the United States and share in any recovery obtained by the government. Mr. Jones will receive $904,000 as his share of the government’s recovery.

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

The Justice Department’s Consumer Protection Branch secured nearly $2 billion in criminal fines, forfeiture, restitution, and civil disgorgement in 2012, Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division, announced today at the Consumer Protection Working Group’s Second Annual Consumer Protection Summit. Since 2009, the consumer protection efforts of the Civil Division, working with U.S. Attorneys’ Offices around the country, have led to recoveries of more than $5.89 billion, over 140 criminal convictions, and total prison sentences exceeding 327 years.

“This summit and our other outreach efforts are essential to the fight against consumer fraud. But our real strength lies in the cases brought by the attorneys in the Consumer Protection Branch every day. The results the branch achieved in 2012 are outstanding, and reflect the determination of this Department of Justice to combatting consumer fraud,” said Principal Deputy Assistant Attorney General Delery, who serves as a co-chair of the Consumer Protection Working Group of the President’s Financial Fraud Enforcement Task Force. “The Consumer Protection Branch’s extraordinary work enforcing federal consumer protection laws has reached new levels, and is evidence that the department has made protecting consumers a top priority.”

The summit brings together over two dozen state and federal agencies to highlight some of the most significant issues facing consumers today: consumer debt, nutritional supplements, money and imposter scams and tax-related fraud. The summit exposes some of the most egregious fraud schemes, provides information on how consumers can protect themselves, and shares what the Consumer Protection Working Group is doing to combat fraud in these areas.

Recently reorganized, the Consumer Protection Branch deploys powerful enforcement tools in creative ways to protect the most vulnerable consumers from myriad forms of fraud and abuse, including financial fraud, new forms of telemarketing fraud, and immigration services fraud.

In 2012, for example, the branch prosecuted three Missouri individuals for their roles in a scheme to defraud consumers seeking immigration-related services. These individuals worked for a company that defrauded legal immigrants who were trying to abide by the rules. The firm falsely told consumers that it employed paralegals who would help customers correctly fill out immigration forms, that it handled excess call volume for U.S. Citizenship and Immigration Services (USCIS), and that fees paid to the firm included government processing fees. All three defendants in the case pled guilty to conspiring to defraud consumers.

Collaborating closely with state Attorneys General and other federal agencies, t he Consumer Protection Branch has been instrumental in the department’s effort to hold accountable those who, in violating the law, contributed toward the 2008 financial crisis. Earlier this year, the department filed a civil lawsuit against the credit rating agency Standard & Poor’s alleging that S&P engaged in a scheme to defraud investors in structured financial products known as Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs). The lawsuit, brought under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), alleges that investors, many of them federally insured financial institutions, lost billions of dollars on CDOs for which S&P issued inflated ratings that misrepresented the securities’ true credit risks. The complaint also alleges that S&P falsely represented that its ratings were objective, independent, and uninfluenced by S&P’s relationships with investment banks when, in reality, S&P’s desire for increased revenue and market share led it to favor the interests of these banks over investors. The Consumer Protection Branch played a key role in investigating and bringing the case, along with the Federal Programs Branch of the Civil Division and the U.S. Attorney’s Office for the Central District of California.

The Consumer Protection Branch has also responded to the financial crisis by aggressively pursuing various forms of financial fraud, including foreclosure rescue schemes targeting distressed homeowners. For instance, in 2012, the branch successfully prosecuted four individuals in connection with a firm that claimed to assist homeowners at risk of foreclosure.  The defendants represented that homeowners’ properties would be sold to investors, but that the present homeowners could stay in their homes.  The defendants designed sham sales to straw purchasers, created false loan applications and documents, pocketed the equity drawn out of the sham sales, and then allowed the loans to go into foreclosure. Victims lost their equity, and most were forced to move out of their homes. The defendants were sentenced to prison for terms of up to five and a half years.

In addition to playing a prominent role in the Consumer Protection Working Group, and organizing the annual Consumer Protection Summit the Consumer Protection Branch has employed new techniques to enhance its outreach and prevention efforts. For instance, the Branch has conducted webinars to educate financial institutions on the dangers of working with payment processors who may facilitate fraudulent schemes. It has also engaged consumer advocacy groups in new ways, and sought to create new partnerships with state attorneys general and military legal assistance providers.

While continuing to innovate, the branch has also sharpened its focus in traditional areas of enforcement, such as ensuring the safety of pharmaceutical products, medical devices, food, and dietary supplements. Health care fraud cases were the sources of the Consumer Protection Branch’s largest recoveries in 2012. The branch brought enforcement actions and criminal prosecutions in response to a number of violations, including the misbranding of pharmaceuticals, deficient manufacturing processes, the sale of adulterated and unsafe products, and the resale of prescription drugs that had been diverted from lawful channels of distribution. The branch recovered more than $1.9 billion in criminal fines and forfeiture and secured 16 criminal convictions in connection with these cases.

“Whether consumers are targeted by scammers looking to cheat them or manufacturers of food or pharmaceuticals that put profit ahead of consumer safety, the department will bring to bear its expertise and all available tools to root out conduct that harms consumers,” said Principal Deputy Assistant Attorney General Delery. “The success of the Consumer Protection Branch demonstrates our unwavering commitment to the protecting the health and safety of Americans.”

Another key component of the Consumer Protection Branch’s work is defense of the decisions of government agencies charged with protecting consumers. In 2012, the branch successfully defended cases involving, for example, the Food and Drug Administration’s (FDA) approval of various generic drugs to increase consumers’ market choices and the Federal Trade Commission’s (FTC) interpretation of a provision of the Fair Credit Reporting Act (FCRA) that requires lenders to disclose certain information to consumers. The branch was also instrumental in securing court orders requiring major tobacco companies to place statements on their websites, on cigarette packages, and at retail stores correcting past false statements that they had been making about the safety of their products.

Principal Deputy Assistant Attorney General Delery expressed his gratitude and appreciation for the dedicated public servants who work tirelessly to protect consumers. These individuals include attorneys, investigators, paralegals and other personnel throughout the Civil Division, the U.S. Attorneys’ Offices, the Department of Health and Human Services, the FDA, the FTC, the Consumer Product Safety Commission, the Postal Inspection Service and other federal and state agencies.

Related Materials:

Principal Deputy Assistant Attorney General Stuart F. Delery Speaks at the Second Annual Consumer Protection Summit

WASHINGTON – The Department of Justice and the Federal Trade Commission (FTC) announced today that the deadline for submitting written comments on their recent Patent Assertion Entity Activities Workshop has been extended from March 10, 2013 to April 5, 2013.

The workshop, held on Dec. 10, 2012, explored the impact of patent assertion entity (PAE) activities on innovation and competition and the implications for antitrust enforcement and policy.  Additional information about the workshop is available at the  Department of Justice and FTC websites.  Comments may be submitted via e-mail to: ATR.LPS-PAEPublicComments@usdoj.gov.  Submitted comments will be made publicly available on the Department of Justice and FTC websites.

Press contacts:

Department of Justice                                  
Office of Public Affairs
Gina Talamona
202-514-2007

Federal Trade Commission
Office of Public Affairs
Peter Kaplan
202-326-2334

A 29-count indictment was unsealed today in Montgomery, Ala., charging Bryant Thompson, an Alabama corrections officer, and Quincy Walton, a former Alabama corrections officer, with federal tax crimes, the Justice Department and the Internal Revenue Service (IRS) announced. Thompson and Walton are both charged with one count of conspiracy to defraud the United States; Thompson is additionally charged with 10 counts of wire fraud and 10 counts of aggravated identity theft, and Walton is additionally charged with four counts of theft of government money and four counts of aggravated identity theft.

According to the indictment, Thompson, a corrections officer at the Alabama Department of Corrections, unlawfully obtained the names and Social Security numbers of inmates in the custody of the state of Alabama and caused to be filed false tax returns in the names of those inmates. The IRS issued tax refund checks in the names of inmates whose identities Thompson unlawfully obtained and Walton cashed those checks.

An indictment is merely a formal charge by the grand jury. The defendants are presumed innocent unless and until proven guilty.

If convicted, Thompson and Walton face a maximum sentence of five years in federal prison for the conspiracy count, a maximum of 20 years for each wire fraud count, a maximum of 10 years for each theft of government money count and a minimum of two years for aggravated identity theft. In addition to prison time, Thompson and Walton also face the possibility of fines and restitution to the IRS and other victims.

The case was investigated by IRS Criminal Investigation and is being prosecuted by Trial Attorneys Alexander R. Effendi and Justin K. Gelfand of the Justice Department’s Tax Division.

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

Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Peter McDonough of Pleasanton, Calif., and Michael Renquist of Livermore, Calif.

Including today’s pleas, 29 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

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

“The conspirators suppressed competition and lined their pockets through fraudulent and collusive conduct at the expense of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division and its law enforcement partners at the FBI will continue to hold accountable individuals who subvert the competitive process at foreclosure auctions around the country.”

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

“The FBI and the Antitrust Division continue to bring to justice those individuals who engage in fraudulent anticompetitive practices at foreclosure actions,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The foundation of our real estate market depends on fairness and transparency of all participants, and we are committed to working with our local and federal partners to ensure that conspirators are held accountable.”

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

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

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

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

Sulaiman Abu Ghayth, aka “Suleiman Abu Gayth”, a former associate of Usama Bin Laden, has been arrested and charged in an indictment unsealed today in New York City with conspiracy to kill U.S. nationals, announced Attorney General Eric Holder, Assistant Attorney General for National Security Lisa Monaco, U.S. Attorney for the Southern District of New York Preet Bharara, the Assistant Director-in-Charge of the FBI’s New York Field Office George Venizelos, and the Police Commissioner of the City of New York (NYPD) Raymond W. Kelly.  Abu Ghayth is expected to be presented and arraigned tomorrow, March 8, 2013, at 10:00 a.m. before U.S. District Judge Lewis A. Kaplan.

“No amount of distance or time will weaken our resolve to bring America's enemies to justice,” said Attorney General Holder. “To violent extremists who threaten the American people and seek to undermine our way of life, this arrest sends an unmistakable message: There is no corner of the world where you can escape from justice because we will do everything in our power to hold you accountable to the fullest extent of the law.”

“The arrest of Abu Ghayth is an important milestone in our ongoing counterterrorism efforts.  I applaud the many agents, analysts and prosecutors responsible for bringing about this significant case and arrest,” said Assistant Attorney General Monaco.

“It has been 13 years since Abu Ghayth allegedly worked alongside Usama Bin Laden in his campaign of terror, and 13 years since he allegedly took to the public airwaves, exhorting others to embrace al Qaeda’s cause and warning of more terrorist attacks like the mass murder of 9/11,” said U.S. Attorney Bharara.  “The memory of those attacks is indelibly etched on the American psyche, and today’s action is the latest example of our commitment to capturing and punishing enemies of the United States, no matter how long it takes.”

“Sulaiman Abu Ghayth held a key position in al Qaeda, comparable to the consigliere in a mob family or propaganda minister in a totalitarian regime,” said FBI Assistant Director-in-Charge Venizelos. “He used his position to persuade others to swear loyalty to al Qaeda’s murderous cause. He used his position to threaten the United States and incite its enemies. His apprehension is another important step in the campaign to limit the reach of al Qaeda and enhance our national and international security.”

 “While New York City must remain vigilant to continued terrorist threats against it, Abu Ghayth's apprehension and prosecution promises to close another chapter in al Qaeda's notoriously violent history of killing Americans,” said NYPD Commissioner Kelly.  “This case also represents another success in the ongoing partnership between Federal agents and NYPD detectives through the JTTF.”

As alleged in the superseding indictment that has been filed against Abu Ghayth in federal court:

Since around 1989, al Qaeda has been an international terrorist organization, dedicated to opposing non-Islamic governments with force and violence.  Usama Bin Laden served as the leader or “emir” of al Qaeda until his death on or about May 2, 2011.  Members of al Qaeda typically have pledged an oath of allegiance, called bayat, to Bin Laden and to al Qaeda. 

The core purpose of al Qaeda, as stated by Bin Laden and other leaders, is to support violent attacks against property and nationals, both military and civilian, of the United States and other countries.  Between 1989 and 2001, al Qaeda established training camps, guest houses, and business operations in Afghanistan, Pakistan, and other countries for the purpose of training and supporting its agenda of violence and murder.  Members and associates of al Qaeda have executed a number of terrorist attacks, all in furtherance of the organization’s stated conspiracy to kill Americans, including the attacks on the United States on September 11, 2001 in New York, Virginia, and Pennsylvania, which killed approximately 2,976 people. 

From at least May 2001 up to around 2002, Abu Ghayth served alongside Usama Bin Laden, appearing with Bin Laden and his then-deputy Ayman al-Zawahiri, speaking on behalf of the terrorist organization and in support of its mission, and warning that attacks similar to those of September 11, 2001 would continue.

In particular, around May 2001, Abu Ghayth urged individuals at a guest house in Kandahar, Afghanistan, to swear bayat to Bin Laden.  On the evening of Sept. 11, 2001, after the terrorist attacks on the United States, Bin Laden summoned Abu Gayth and asked for his assistance and he agreed to provide it.  On the morning of Sept. 12, 2001, Abu Ghayth, appeared with Bin Laden and Zawahiri, and spoke on behalf of al Qaeda, warning the United States and its allies that “[a] great army is gathering against you” and called upon “the nation of Islam” to do battle against “the Jews, the Christians and the Americans.”  Also, after the September 11, 2001 terrorist attacks, Abu Ghayth delivered a speech in which he addressed the then-U.S. Secretary of State and warned that “the storms shall not stop, especially the Airplanes Storm,” and advised Muslims, children, and opponents of the United States “not to board any aircraft and not to live in high rises.”

Abu Gayth arranged to be, and was, successfully smuggled from Afghanistan into Iran in 2002.

The indictment charges Abu Ghayth with participating in a conspiracy to kill United States nationals.  The offense carries a maximum term of imprisonment of life.  No trial date has yet been set in the case.

The charges and arrest of Abu Ghayth are the result of the close cooperative efforts of the U.S. Attorney’s Office for the Southern District of New York, the Joint Terrorism Task Force – which principally consists of agents and detectives of the FBI and the New York City Police Department – the United States Marshals Service and the National Security Division of the U.S. Department of Justice.  The Justice Department’s Office of International Affairs and the U.S. Department of State also provided assistance.
       
The prosecution is being handled by Assistant United States Attorneys John P. Cronan and Michael Ferrara of the Terrorism and International Narcotics Unit of the U.S. Attorney’s Office for the Southern District of New York, with assistance from Trial Attorney Jolie Zimmerman of the National Security Division’s Counterterrorism Section.

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

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that MOHAMMAD JAHANGIR MIAH, age 38, a citizen of Bangledesh, was sentenced to 21 months in prison today in the United States District Court for the Northern Mariana Islands. MIAH was sentenced after pleading guilty to conspiracy to unlawfully produce and transfer identification document, regarding the production of fraudulent CNMI driver’s licenses. The charge stems from an Indictment filed on January 10, 2011 against MIAH, William A. Hocog, Tahira Dolores S. Miah, Hongmei Sun, and Hui Qiang Yan. The other four defendants also pled guilty in this case.

The sentencing is the result of a day-long hearing before Chief Judge Ramona V. Manglona. In determining the sentence, Chief Judge Manglona considered MIAH’s criminal activities both in local and federal court. She also found that he had obstructed justice by not being truthful to the United States Probation Office during the preparation of the Presentence Report. Chief Judge Manglona also concluded that MIAH was an organizer of this criminal activity under the U.S. Sentencing Guidelines.

MIAH was immediately remanded to the custody of the United States Marshals Service and will begin serving his 21-month sentence with credit for time served. He also was ordered to forfeit $960.00.

The case was investigated by the Homeland Security Investigations Agency (HSI) and the Federal Bureau of Investigation (FBI). The case was prosecuted by Assistant United States Attorney Stephen F. Leon Guerrero and Assistant United States Attorney Kirk W. Schuler.

Following a four-day jury trial in Baton Rouge, La., a federal jury convicted Angela Myers today of wire fraud, making false claims, subscribing to false tax returns and aggravated identity theft, the Justice Department and Internal Revenue Service (IRS) announced.

Based on the evidence presented at trial, Myers operated “Angie’s Tax Service,” a tax preparation business located in Baton Rouge. Myers electronically filed false claims for tax refunds using the names and Social Security numbers of identity theft victims. Myers filed the identity theft tax returns using a unique preparer identification number assigned to her daughter. Many of the victims were nursing home patients who resided at Port Allen Care Center in Port Allen, La., and who did not have the ability to leave the nursing home.

The evidence also revealed that Myers lied on her own 2007 and 2008 federal income tax returns, failing to report hundreds of thousands of dollars of tax preparation fees that she earned at Angie’s Tax Service and used to buy various items, including an RV and a $50,000 investment product.

“Prosecuting stolen identity refund fraud is a top priority of the Justice Department,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “The verdicts returned today demonstrate that the American people will not tolerate criminals who prey on the most vulnerable in our society to enrich themselves.”

“Identity theft is a very serious crime that victimizes honest taxpayers and causes immense hardship,” stated Richard Weber, Chief, IRS Criminal Investigation. “Many of Myers’ victims were nursing home patients. Be assured that IRS has made a commitment to pursue identity theft and we will work tirelessly with our partners at the U.S. Attorney’s Office to hold those who engage in similar conduct accountable.”

Assistant Attorney General Keneally commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, and Trial Attorneys Justin Gelfand and Jason Poole, who prosecuted the case with the assistance of the U.S. Attorney’s Office for the Middle District of Louisiana.

A former health care clinic director and licensed therapist pleaded guilty today in connection with a health care fraud scheme involving defunct health provider Health Care Solutions Network Inc. (HCSN), announced Acting Assistant Attorney General Mythili Raman of the Justice Department's Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

 Paul Thomas Layman, 66, of Miami, pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud. 

Layman’s co-conspirator Dana Gonzalez, 43, of Miami, a registered clinical social worker intern in Florida, pleaded guilty yesterday to one count of conspiracy to commit health care fraud for her role in the scheme.

During the course of the conspiracy, Layman was employed as a substance abuse counselor, therapist and clinical director of HCSN’s Partial Hospitalization Program (PHP).  A PHP is a form of intensive treatment for severe mental illness.
        
In Florida, HCSN operated community mental health centers at three locations. During his employment, Layman worked full time at all HCSN locations in Florida in various capacities.  According to court documents, Layman was aware that HCSN in Florida paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid.  Layman also knew that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia and Alzheimer's disease. 

 Court documents reveal that Layman was aware that HCSN personnel in Florida were fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN facilities in Florida for purported PHP treatment and were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Florida Medicaid.  During his employment at HCSN in Florida, Layman signed fabricated PHP therapy notes and other medical records used to support false claims to government sponsored health care programs.

 HCSN also operated one location in Hendersonville, N.C.  At the Hendersonville location, Layman served as the clinical director and assisted HCSN owner Armando Gonzalez in obtaining necessary licensing, credentials and Medicare authorizations for HCSN.  According to court documents, from 2008 through 2009, Layman purportedly supervised therapists at HCSN in Hendersonville, including Alexandra Haynes, who was an unlicensed therapist purportedly performing PHP therapy to HCSN patients.  For their roles in the conspiracy, Gonzalez pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering, and Haynes pleaded guilty to one count of conspiracy to commit health care fraud.  On Monday, Feb. 25, 2013, Gonzalez was sentenced to serve 168 months in prison for his role in the scheme.

According to court documents, Dana Gonzalez worked at HCSN in Florida from approximately April 2005 through December 2010.  At HCSN in Florida, Gonzalez fabricated patient medical records, which were used to support false and fraudulent billing to Medicare and Florida Medicaid.  In 2011, Gonzalez worked at HCSN in North Carolina, where she fabricated therapy notes and medical records, and provided unlicensed therapy when licensed therapists were absent.

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

 Fifteen defendants have been charged for their alleged roles in the HCSN health care fraud scheme, and 12 defendants have pleaded guilty.  Alleged co-conspirator Wondera Eason is scheduled for trial on April 22, 2013, before Judge Altonaga in Miami.  Alleged co-conspirators Alina Feas and Lisset Palmero are scheduled for trial on June 3, 2013.  Defendants are presumed innocent until proven guilty at trial.

The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorneys Allan J. Medina and Steven Kim of the Criminal Division's Fraud Section.  This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida.   

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Frank William Carter, 43, a former police officer of the Laredo, Texas, Police Department (LPD), pleaded guilty today in federal court to violating the civil rights of an arrestee, the Justice Department announced today.

During his guilty plea before U.S. District Judge Diana Saldaña, Carter admitted that while using his authority as a LPD officer, he entered the backseat of a LPD patrol car where the victim was handcuffed and detained and struck the victim several times. According to information presented in court, rear-facing dash camera audio and video recordings revealed that Carter yelled obscenities at the victim while he punched the victim in the head and body. Carter also repeatedly slammed the victim’s face into the back of the seat. The victim remained handcuffed during the entire incident and never resisted or attempted to harm Carter.

“Mr. Carter has admitted that he used unjustified and unlawful force against a handcuffed arrestee,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Justice Department will continue to prosecute law enforcement officers who violate the constitutional rights of individuals in their custody.”

Judge Saldaña has ordered a pre-sentence report to be due April 11, 2013, at which time she will set sentencing date and decide whether to accept the guilty plea Carter entered today. Carter faces a maximum penalty of ten years in prison.

This case was investigated by FBI Special Agent Anthony Manganaro and Texas Ranger Nathan Mutz. The case is being prosecuted by Civil Rights Division Trial Attorneys Ryan Murguía and Christopher Lomax, with the assistance of the U.S. Attorney’s Office for the Southern District of Texas.

A federal jury late yesterday convicted Kevin Casaus, 25, a former corrections officer at the Bernalillo County, N.M., Metropolitan Detention Center (MDC) in Albuquerque, N.M., on obstruction of justice and falsification of records charges, announced the Justice Department.

Casaus and fellow former MDC corrections officers, Demetrio Juan Gonzales, 40, and Matthew Pendley, 26, were indicted in June 2012, and charged with various crimes related to the assault of an inmate housed at MDC on Dec. 21, 2011, and subsequent attempts to cover up and impede the investigation of the assault.  In Oct. 2012, Gonzales pleaded guilty to violating the civil rights of an individual in his custody when he struck and choked the victim in the shower room/dress out area of MDC.  Pendley pleaded guilty in Feb. 2012 to obstructing justice by making false statements to law enforcement during their investigation of the assault on an inmate. 

According to the evidence at trial, during the early morning hours of Dec. 21, 2011, Gonzales was assigned to the Receiving-Discharge-Transfer (RDT) Unit at MDC where individuals are brought to be booked soon after they are arrested.  His job was to photograph and fingerprint those who are brought to RDT for booking.  The victim, who had been arrested for Driving While Intoxicated, was verbally uncooperative during the booking process, but was not a physical threat to anyone.  Gonzales testified that he became angry at the victim and walked him to the shower room where he knew there were no surveillance cameras.  Several other corrections officers, including Casaus, followed Gonzales to the shower room.  There, Gonzales physically assaulted the victim, striking him multiple times, and choking him.  Gonzales testified that he beat the victim “in a blind rage” and then had to wash the victim’s blood off his hands.  He further testified that the victim did not do anything to justify the beating.

According to the testimony, Casaus and two other corrections officers were present in the shower room during the beating.  Additionally, a former inmate who was in the hallway outside the shower room at the time of the beating, overheard groans and sounds consistent with the assault coming from the shower room.  He was then tasked with cleaning the blood that was on the floors and walls of the shower room.  The victim testified that, after Gonzales left the shower room, Casaus assaulted him by shoving him and striking him. Casaus falsely stated during a recorded interview with a Bernalillo County Sheriff’s Office investigator that the victim was not assaulted in the shower room, the victim was not bleeding, and that they only brought the victim to the shower room to ask him to change out of his clothes.  Casaus falsified his report when he wrote that he saw blood on the victim's clothes, but did not know where the blood came from.

The jury deliberated approximately four hours before returning a verdict of guilty on the obstruction of justice and falsification of records charges, and not guilty on the assault charge.

“Today's verdict affirms that law enforcement officers are not above the very laws they are sworn to uphold,” said Assistant Attorney General Thomas E. Perez.  “As in this case, the Civil Rights Division will work closely with our United States Attorneys to vigorously prosecute police misconduct.”

Casaus faces a maximum penalty of 20 years in prison when he is sentenced.  His sentencing hearing has yet to be scheduled.  Gonzales was sentenced in Jan. 2013 to 33 months in prison.  Pendley’s sentencing hearing also has not been scheduled.

“When those who are sworn to uphold the law and protect others instead abuse their power and position, they undermine the public’s confidence in the justice system and our government institutions,” said Kenneth J. Gonzales, U.S. Attorney for the District of New Mexico.  “The U.S. Attorney’s Office and the Department of Justice are committed to promoting trust in our system of justice by vigorously prosecuting those who obstruct justice.”

“Corrections officers have a special duty to safeguard the civil rights of the inmates they oversee.  That is why the Albuquerque FBI aggressively investigated this case that also resulted in the guilty pleas of two other former MDC officers,” said Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI.  “I would like to congratulate the FBI Special Agents for their hard work, and the U.S. Attorney's Office and the Justice Department’s Civil Rights Division for three successful and important civil rights prosecutions.  I also want to thank the Bernalillo County Sheriff's Office and the Metropolitan Detention Center's executive management and internal affairs staff.”

This case was investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Mark T. Baker for the District of New Mexico and Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice.

The Bureau of Justice Assistance (BJA) awarded $1 million to the National Crime Prevention Council (NCPC) to support the development of a National Public Education Campaign on the subject of responsible gun ownership and safe gun storage. With the award, NCPC will create, produce, and distribute television, radio, and outdoor Public Service Announcements (PSAs) that encourage gun owners to safely store their firearms so that they do not fall into the wrong hands. The campaign will also emphasize the importance of immediately reporting lost or stolen guns to local law enforcement to ensure public safety.

“As part of President Obama's comprehensive plan to reduce gun violence, the Administration is committed to working with firearm owners and enthusiasts to prevent tragic accidents and keep guns from falling into the wrong hands,” said Attorney General Eric Holder. “We are determined to implement the kinds of common-sense solutions that our citizens - and especially our young people - deserve.”

Ensuring the public is educated in responsible gun ownership and firearm safety is a critical aspect to reducing gun violence. Gun owners, community groups and businesses must be aware and reminded to practice safe firearm storage and to make certain that firearms in the home are not casually accessible. This public awareness campaign will endeavor to decrease the threat of gun violence by promoting principles of responsible firearm ownership nationwide and providing guidelines for the safe usage and storage of firearms.

NCPC, founded in 1982, is the nation’s nonprofit leader in crime prevention. For 30 years, they have delivered crime prevention tips and public service advertising campaigns that empower citizens individually and collectively to keep themselves, their families and their communities safe from crime.

It is planned that the PSAs created through this award will be distributed to more than 1,700 television stations, nearly 15,000 radio stations and more than 500 cable networks in 210 markets in summer 2013.

The Justice Department announced today that American Systems Corporation, Anixter International Inc., and Corning Cable Systems LLC have agreed to pay the U nited States $3 million to settle allegations that they violated the False Claims Act and the Anti-Kickback Act in bidding on a contract with the CIA.

The settlement announced today resolves claims against these contractors related to a CIA contract awarded to American Systems in early 2009 to provide supplies and services. American Systems teamed with Anixter to bid on the contract with Corning as a supplier. The United States alleged t hat American Systems, Anixter and Corning provided gratuities, including meals, entertainment, gifts and tickets to sporting and other events, to CIA employees and outside consultants in order to influence contract specifications that would favor the three companies in the award of the contract. The settlement also resolves allegations that the three companies improperly received source selection information from a CIA employee to whom they had provided gratuities, and that they had concealed the gratuities prior to award.

“This settlement shows that the United States will protect the integrity of the federal procurement process from the wrongful activities of unscrupulous contractors,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice, Civil Division. “Plying government officials with meals and entertainment to gain favorable treatment in the award of federal contracts corrupts the procurement process and will not be allowed.”

“Improper gifts and gratuities paid to government officials are a corrupting influence on government contracts. Combating this type of conduct is a high priority in the Eastern District of Virginia,” said U.S. Attorney for the Eastern District of Virginia Neil MacBride.

“This case clearly reflects that the CIA will respond effectively to allegations of fraud affecting agency programs,” said CIA Inspector General David B. Buckley. “My office treats contract fraud and related employee misconduct as one of our top investigative priorities, and we work closely with agency employees and the Department of Justice to ensure that illegal acts are addressed in an effective manner.”

The allegations resolved by the settlement were initiated by a lawsuit filed in the Eastern District of Virginia under the qui tam, or whistleblower, provisions of the False Claims Act by former Anixter sales representative, William Jones. Under the False Claims Act, private citizens may sue on behalf of the United States for false claims and share in any recovery obtained by the government. Jones will receive $585,000 as his share of the government’s recovery.

This settlement was the result of a coordinated effort by the United States Attorney's Office for the Eastern District of Virginia; the Department of Justice, Civil Division, Commercial Litigation Branch; and the CIA, Office of Inspector General. The claims settled by this agreement are allegations only; there has been no determination of liability.

The Justice Department, in conjunction with the U.S. Attorney’s Office for the Eastern District of Washington, announced today that Colorado-based CH2M Hill Hanford Group Inc. (CHG) and its parent company, CH2M Hill Companies Ltd. (CH2M Hill) have agreed that CHG committed federal criminal violations, defrauding the public by engaging in years of widespread time card fraud.  In order to resolve CHG’s civil and criminal liability, CH2M Hill has agreed to pay a total of $18.5 million, commit an additional $500,000 towards accountability systems, consent to a corporate monitor, and to continue actively cooperating with the ongoing fraud investigation .

Between 1999 and 2008, CH2M Hill had a Department of Energy contract to manage and clean 177 large underground storage tanks containing mixed radioactive and hazardous waste at the Department of Energy’s Hanford Nuclear Site in southeastern Washington (the Tank Farms Contract). The Hanford Site was used for the production of nuclear weapons during World War II and the Cold War. According to the statement of facts agreed to by the United States and CH2M Hill, CHG hourly employees involved in the cleanup routinely overstated the number of hours they worked, and CHG management condoned the practice and submitted inflated claims to the Department of Energy that included the fraudulently claimed hours.

Specifically, CH2M Hill and the United States agreed that CHG’s hourly workers “consistently refuse[d] to perform any overtime work unless that overtime was offered, or ‘called out,’ in 8 hour blocks.”  As stated in the agreed statement of facts, “[t]he inability of CHG’s upper management to secure the necessary overtime volunteers for various jobs threatened CHG’s ability to complete various projects linked to the Tank Farms Contract performance incentives. This in turn threatened CHG’s ability to earn certain fees, and therefore profits under the Tank Farms Contract.” According to the agreed statement of facts, the inability to obtain performance based incentives would have directly impacted the personal corporate bonuses of certain members of CHG’s upper management. Consequently, “certain members of CHG’s upper management, certain direct supervisors of the hourly workers, and certain other supervisory personnel, accepted the practice of hourly workers only working until the particular overtime job was completed, leaving Hanford, and falsely claiming a full 8 hours even when the job took less than 8 hours,” according to the agreed statement of facts.

Unfortunately, the widespread time card fraud at CHG was not limited to overtime abuse and had occurred for many years, in some instances even pre-dating the Tank Farms Contact, as stated in the agreed statement of facts. Further the agreed statement of facts provides that, “[c]ertain members of CHG’s upper management, certain direct supervisors of hourly employees, and other certain supervisory personnel, did not discipline, formally or informally, CHG hourly workers for routinely engaging in known time card fraud. In fact, certain of CHG’s direct supervisors of hourly workers engaged in patterns designed to avoid the detection of the routine time card fraud by law enforcement and internal auditors.” In this manner, as CH2M Hill agrees, CHG “knowingly, willfully, and with intent to defraud, facilitated CHG’s hourly workers routinely getting paid for hours they did not work and combined, conspired, and agreed with CHG hourly workers to accomplish the same, all at the sole expense of the citizens of the United States.”

“Contractors owe a duty to the taxpayers to accurately bill the United States for work performed,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “This settlement demonstrates that the Department of Justice, working together with its law enforcement partners, will hold contractors accountable for false billing and restore wrongfully taken funds to the Treasury.”

“This sort of systemic fraud is an appalling abuse of the trust we place in our contractors at Hanford and it simply will not be tolerated,” said Michal C. Ormsby, U.S. Attorney for the Eastern District of Washington. “However, we are pleased that CH2M Hill has stepped up and admitted to the criminal conduct of its subsidiary and has agreed to pay back a good faith estimate of what was taken, including criminal proceeds from the conspiracy.” U.S. Attorney Ormsby went on to outline that pursuant to the global agreement, “CH2M Hill has also agreed to take substantial remedial steps going forward including having its remaining subsidiary at the Hanford Site, CH2M Hill Plateau Remediation Company, consent to a corporate monitor for 3 years, and to commit an additional $500,000 towards making sure something like this does not happen again.” U.S. Attorney Ormsby also noted that, “under this global resolution, CH2M Hill will continue its commendable cooperation and help ensure that all individuals who participated in this conspiracy and profited from it will be brought to justice as well.”

“I am pleased with today’s announcement.  I would like to express my thanks to the entire team – including Inspector General Special Agents, the United States Attorney's Office, the Department of Justice Civil Frauds Division and the FBI—for their efforts on this investigation,” said Gregory H. Friedman, the Department of Energy Inspector General. “It is essential that Department of Energy contractors be held accountable for effective stewardship of U.S. taxpayer dollars.”

The global resolution consists of CH2M Hill paying $16,550,000 to resolve its civil liability under the False Claims Act. In addition, CH2M Hill entered into a Non-Prosecution Agreement with the United States Attorney’s Office for the Eastern District of Washington to resolve its criminal liability. Under the terms of that agreement, CH2M Hill will refund an additional $1.95 million in wrongfully obtained profits, dedicate $500,000 to foster increased accountability at the Hanford Site, and pay for independent monitoring to ensure that CH2M Hill takes adequate corrective actions. To date, eight individuals have pleaded guilty to engaging in the same time card fraud scheme and conspiracy that CH2M Hill has now admitted CHG itself was a conspirator in.

The civil fraud allegations under the False Claims Act resolved by today’s settlement were initially alleged in a whistleblower lawsuit filed by Carl Schroeder, a former employee of CH2M Hill and one of those who pleaded guilty to the scheme. Under the False Claims Act, private citizens can sue on behalf of the United States and share in the recovery. The act, however, bars whistleblowers from recovering if they were convicted based on their role in the scheme.

This case was handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Washington, with investigative assistance provided by the Department of Energy Office of Inspector General and the FBI.

The False Claims Act suit was filed in the United States District Court for the Eastern District of Washington, and is captioned United States ex rel. Schroeder v. CH2M Hill, No. 09-cv-5038 (E.D. Wash.).

Corey Means was sentenced yesterday to 20 months in prison and Melba Wilson to eight months home detention for their involvement in a million dollar identity theft tax scheme, the Justice Department and the Internal Revenue Service (IRS) announced.

According to court documents, between October 2009 and April 2012, Antoinette Djonret and her co-conspirators used stolen identities to file over 1,000 false tax returns that fraudulently claimed over $1.7 million in tax refunds. Djonret orchestrated this scheme. She obtained stolen identities from multiple sources, including Alabama state databases. She also established an elaborate network for laundering the refund money. Djonret recruited Corey Means, Melba Wilson and others into the conspiracy. Melba Wilson and Corey Means recruited individuals to obtain prepaid debit cards and gave the cards to Djonret. Corey Means also provided addresses to Djonret for the purpose of receiving prepaid debit cards. The fraudulent tax refunds obtained by the conspiracy were directed to these prepaid debit cards and Djonret and her co-conspirators would then use the cards to obtain the proceeds. Djonret was previously sentenced to 144 months in prison for her role in this scheme and for other criminal conduct.

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

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

New Jersey-based Par Pharmaceutical Companies Inc. pleaded guilty in federal court today and agreed to pay $45 million to resolve its criminal and civil liability in the company’s promotion of its prescription drug Megace ES for uses not approved as safe and effective by the Food and Drug Administration (FDA) and not covered by federal health care programs, the Justice Department announced.

Chief Executive Officer Paul V. Campanelli pleaded guilty on behalf of Par before U.S. Magistrate Judge Madeline Cox Arleo earlier today in Newark, N.J., federal court. Judge Arleo fined Par $18 million and ordered $4.5 million in criminal forfeiture. Par also agreed to pay $22.5 million to resolve its civil liability.

“Today’s resolution emphasizes the importance of the U.S. government’s coordinated efforts to combat health care fraud. We expect companies to make honest, lawful claims about the drugs they sell. We will be vigorous in our enforcement efforts when they break the law, to ensure that they are held accountable,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division.

“The FDA requires drug makers to go through a stringent approval process before new drugs – or new uses for existing drugs – are made available to doctors and their patients,” said Paul J. Fishman, U.S. Attorney for the District of New Jersey. “Today, Par admitted that it chose to ignore that process in pursuit of more sales and greater profits. It is paying the price for its choice.”

“Individual accountability of Par’s board and executives is required under the comprehensive five-year integrity agreement the Office of the Inspector General has with the company,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.  “For example, company executives may have to forfeit annual bonuses if they or their subordinates engage in significant misconduct, and sales representatives may not be paid incentive compensation for the drug involved in the case, or successor branded versions of that drug.”

“The public has been well served by this investigation and the FDA commends the efforts of the U.S. Attorney's Office in New Jersey, the Department of Justice and the other law enforcement agencies that worked with us to vigorously pursue this matter,” said Mark Dragonetti, Special Agent in Charge of the FDA’s Office of Criminal Investigation's New York Field Office. “Today’s settlement demonstrates the FDA’s continued commitment to target companies that disregard the safeguards of the drug approval process and promote drugs for uses before they have been proven to be safe and effective.”

Par pleaded guilty to an information charging it with a criminal misdemeanor for misbranding Megace ES in violation of the Federal Food, Drug and Cosmetic Act (FDCA). Megace ES, a megestrol acetate drug product was approved by the FDA to treat anorexia, cachexia, or other significant weight loss suffered by patients with AIDS. The Megace ES distributed nationwide by Par was criminally misbranded because its FDA-approved labeling lacked adequate directions for use in the treatment of non-AIDS-related geriatric wasting, a use that was intended by Par but never approved by the FDA. The FDCA requires companies such as Par to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be distributed in interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. In addition to the criminal fine and forfeiture, the plea agreement mandates that Par implement several compliance measures and annually provide the U.S. Attorney’s Office with a sworn certification from its chief executive officer that the company has not unlawfully marketed any of its pharmaceutical products.

The civil settlement agreement requires Par to pay $22.5 million to the federal government and various states to resolve claims arising from its off-label marketing. The civil settlement resolves allegations that Par, by promoting the sale and use of Megace ES for uses that were not FDA-approved and not covered by Federal health care programs, caused false claims to be submitted to these programs. The United States further alleged that Par deliberately and improperly targeted sales to elderly nursing home residents with weight loss, whether or not such patients suffered from AIDS, and launched a long-term care sales force to market to this population. During this marketing campaign, Par was allegedly aware of adverse side effects associated with the use of megestrol acetate in elderly patients, including an increased risk of deep vein thrombosis, toxic reactions in elderly patients with impaired renal function, and mortality. The United States alleged that Par made unsubstantiated and misleading representations about the superiority of Megace ES over generic megestrol acetate for elderly patients to encourage providers to switch patients from generic megestrol acetate to Megace ES, despite having conducted no well-controlled studies to support a claim of greater efficacy for Megace ES. Except as admitted in the plea agreement, the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims.

In addition to the criminal and civil resolutions, Par also agreed to enter into a five-year corporate integrity agreement with the Office of the Inspector General of the Department of Health and Human Services (HHS-OIG) that requires enhanced accountability, increased transparency and wide-ranging monitoring activities conducted by both internal and independent external reviewers.

The plea agreement and corporate integrity agreement include provisions that require Par to implement changes to the way it does business.  The plea agreement and agreement prohibit Par from providing compensation to sales representatives or their managers based on the volume of sale of Megace ES, and in the corporate integrity agreement, based on the volume of Megace ES and any branded successor megestrol acetate drug.  Under the agreement, Par is also required to change its executive compensation program to permit the company to recoup annual bonuses from covered executives if they, or their subordinates, engage in significant misconduct.

The settlement resolves three lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. The civil lawsuits were filed in the District of New Jersey and are captioned U.S. ex rel. McKeen and Combs v. Par Pharma ceutical, et al., U.S. ex rel. Thompson v. Par Pha rmac eutical, et al., and U.S. ex rel. Elliott & Lundstrom v. Bristol-M yers Squibb, Par Pharma ceutical, et al. As part of today’s resolution, relators McKeen and Combs will receive $4.4 million.

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.1 billion.

The owner and operator of a Houston-area ambulance company was convicted by a federal jury in Houston of multiple counts of health care fraud for submitting false and fraudulent claims to Medicare, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office and Special Agent in Charge Mike Fields of the U.S. Health and Human Services Office of Inspector General, Office of Investigations Houston Office announced today.

Olusola Elliott, 44, of Fort Bend County, Texas, was convicted late yesterday by a federal jury in U.S. District Court in the Southern District of Texas of one count of conspiracy to commit health care fraud and six counts of health care fraud.

Elliott was the owner and operator of Double Daniels LLC, a Texas entity that purportedly provided non-emergency ambulance services to Medicare beneficiaries in the Houston area.  According to evidence presented at trial, Elliott and others conspired from April 2010 through December 2011 to unlawfully enrich themselves by submitting false and fraudulent claims to Medicare for ambulance services that were medically unnecessary and not provided.  Evidence showed that Elliott falsified patient records in order to fraudulently bill Medicare on behalf of beneficiaries who were not in need of ambulance services. 

During the course of the scheme, Elliott submitted and caused the submission of approximately $1,713,716 in fraudulent ambulance service claims to Medicare.  According to court documents, Elliot transferred the proceeds of the fraud to himself and others after Medicare payments were sent to Double Daniels.

 Elliot is scheduled for sentencing on May 31, 2013, in Houston.  The six health care fraud counts and the conspiracy count each carry a maximum potential penalty of 10 years in prison and a $250,000 fine  

This case is being prosecuted by Trial Attorneys Christopher Cestaro and Laura M.K. Cordova of the Criminal Division’s Fraud Section with assistance from former Special Assistant U.S. Attorney James S. Seaman.  The case was investigated by the FBI, HHS-OIG and the Texas Attorney General Medicaid Fraud Control Unit.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section. 

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

The Justice Department announced today that it has reached a settlement with the University of Medicine and Dentistry of New Jersey School (UMDNJ) under the Americans with Disabilities Act (ADA). The settlement resolves complaints that the UMDNJ School of Medicine and the UMDNJ School of Osteopathic Medicine unlawfully excluded applicants because they have hepatitis B. This is the first ADA settlement ever reached by the Justice Department on behalf of people with hepatitis B.

In 2011, the two applicants in this matter applied and were accepted to the UMDNJ School of Osteopathic Medicine, and one of them was also accepted to the UMDNJ School of Medicine. The schools later revoked the acceptances when the schools learned that the applicants have hepatitis B. The Justice Department determined that the schools had no lawful basis for excluding the applicants, especially because students at the schools are not even required to perform invasive surgical procedures, and that the exclusion of the applicants contradicts the Centers for Disease Control and Prevention’s (CDC) updated guidance on this issue.

According to the CDC’s July 2012 “Updated Recommendations for Preventing Transmission and Medical Management of Hepatitis B Virus (HBV) – Infected Health Care Workers and Students,” no transmission of Hepatitis B has been reported in the United States from primary care providers, clinicians, medical or dental students, residents, nurses, or other health care providers to patients since 1991.

“Excluding people with disabilities from higher education based on unfounded fears or incorrect scientific information is unacceptable,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We applaud the UMDNJ for working cooperatively with the Justice Department to resolve these matters in a fair manner.”

“It is especially important that a public institution of higher learning – especially one with a mission to prepare future generations of medical professionals – strictly follow the laws Congress has enacted to protect from discrimination those people who have health issues,” said U.S. Attorney for the District of New Jersey Paul Fishman. “The remedies to which the school has agreed should ensure this does not happen again.”

Under the settlement agreement, the UMDNJ must adopta disability rights policy that is based on the CDC’s Hepatitis B recommendations, permit the applicants to enroll in the schools, provide ADA training to their employees and provide the applicants a total of $75,000 in compensation and tuition credits.

Both of the applicants in this matter come from the Asian American Pacific Islander community. The CDC reports that Asian American Pacific Islanders (AAPIs) make up less than 5 percent of the total population in the United States, but account for more than 50 percent of Americans living with chronic Hepatitis B. Nearly 70 percent of AAPIs living in the United States were born, or have parents who were born, in countries where hepatitis B is common. Most AAPIs with Hepatitis B contracted Hepatitis B during childbirth . The Civil Rights Division is committed to ensuring that this community is not subjected to discrimination because of disability.

Title II of the ADA prohibits state and local government entities, like the UMDNJ, from discriminating against individuals with disabilities in programs, services, and activities. State and local governments must also make reasonable modifications in policies, practices, and procedures when the modifications are necessary to avoid discrimination on the basis of disability, unless those modifications would result in a fundamental alteration.

More information about the Civil Rights Division and the laws it enforces is available at the website www.justice.gov/crt.  More information about the ADA and today’s agreement with UMDNJ can be accessed at the ADA website at www.ada.gov or by calling the toll-free ADA information line at 800-514-0301 or 800-514-0383 (TTY).

A third indictment, this time charging two former officers at Roxbury Correctional Institution (RCI), was returned today, in relation to assaults of an inmate, identified as K.D., and subsequent obstruction of justice, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. On Feb. 26, 2013, a grand jury returned two indictments charging a total of nine current or former RCI officers with two subsequent assaults of the same inmate, K.D.

In the indictment returned today, former RCI Lieutenant Robert Harvey and former Correctional Officer Keith Morris are charged with a civil rights offense for their alleged assault on K.D., an inmate, during the 3 p.m. to 11 p.m. shift on March 8, 2013. Harvey also faces an obstruction of justice charge for allegedly filing a false report related to the assault.

Harvey faces a maximum sentence of 30 years in prison, and Morris faces a maximum term of 10 years in prison.

These indictments bring the total number of individuals charged in relation to this case to 14. Including today’s charges, seven current or former RCI officers have been charged with a civil rights offense for their alleged involvement in a series of assaults on K.D. Two former RCI officers, Dustin Norris and Philip Mayo, recently entered guilty pleas acknowledging that they conspired with other officers to assault K.D. Ten current or former RCI officers have been charged with conspiracy or obstruction offenses for their alleged efforts to cover up staff involvement in the assaults on K.D. Ryan Lohr, a former RCI officer, previously entered a guilty plea admitting that he conspired with other officers to obstruct the investigation into an assault on K.D.

These three cases, which are ongoing, are being investigated by the Frederick Resident Agency of the FBI, and are being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Justice Department’s Civil Rights Division, with the assistance of P. Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.

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

Bryan Underwood, a former civilian guard at a U.S. Consulate compound under construction in China, was sentenced today to nine years in prison in connection with his efforts to sell for personal financial gain classified photographs, information and access related to the U.S. Consulate to China’s Ministry of State Security (MSS), announced Lisa Monaco, Assistant Attorney General for the Justice Department’s National Security Division; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Gregory B. Starr, Director of the U.S. State Department’s Diplomatic Security Service.

Underwood pleaded guilty Aug. 30, 2012, in the U.S. District Court for the District of Columbia to one count of attempting to communicate national defense information to a foreign government with intent or reason to believe that the documents, photographs or information in question were to be used to the injury of the United States or to the advantage of a foreign nation. He was sentenced by the Honorable Ellen S. Huvelle. Upon completion of his prison term, Underwood will be placed on two years of supervised release.

 Underwood, 32, a former resident of Indiana, was first charged in an indictment on Aug. 31, 2011, with two counts of making false statements and was arrested on Sept. 1, 2011.  On Sept. 21, 2011, he failed to appear at a scheduled status hearing in federal court in the District of Columbia. The FBI later located Underwood in a hotel in Los Angeles and arrested him there on Sept. 24, 2011.  On Sept. 28, 2011, Underwood was charged in a superseding indictment with one count of attempting to communicate national defense information to a foreign government, two counts of making false statements and one count of failing to appear in court pursuant to his conditions of release.

 “Bryan Underwood betrayed America’s trust by attempting to sell access to secure areas of the very U.S. Consulate compound he was charged to protect,” said Assistant Attorney General Monaco. “Today, he is being held accountable for his actions.  As this case demonstrates, we remain vigilant in protecting America’s secrets and in bringing to justice those who seek to compromise them.”
  
“Access to classified information is a special responsibility to be honored, not a financial opportunity to be exploited,” said U.S. Attorney Machen.  “Bryan Underwood is going to prison because he tried to make millions by selling secret photos of a U.S. Consulate to a foreign government.  His sentence demonstrates our dedication to jealously guarding our nation’s secrets.  We all owe a great debt of gratitude to the agents who detected and stopped Underwood before he succeeded in betraying our country.”
 
“Bryan Underwood attempted to betray his country by using his access to sensitive information for his own benefit. Fortunately, he was stopped before classified information fell into the wrong hands,” said FBI Assistant Director in Charge Parlave. “Together with our partner agencies, the FBI will continue to diligently work to combat potential acts of espionage that threaten our national security.”

“The close working relationship between the U.S. Department of State’s Diplomatic Security Service, the FBI and the U.S. Attorney’s Office resulted in the conviction of Bryan Underwood before he could potentially harm the security of our country,” said Director Starr of the Diplomatic Security Service. “This was a great success by all of the agencies involved.”

According to court documents, from November 2009 to August 2011, Underwood worked as a cleared American guard (CAG) at the site of a new U.S. consulate compound that was under construction in Guangzhou, China.  During this time, the compound was not yet operational. CAGs are American civilian security guards with top secret clearances who serve to prevent foreign governments from improperly obtaining sensitive or classified information from the construction site. Underwood received briefings on how to handle and protect classified information as well as briefings and instructions on security protocols for the U.S. Consulate, including the prohibition on photography in certain areas of the consulate.

In February 2011, Underwood was asked by U.S. law enforcement to assist in a project at the consulate and he agreed. In March and April of 2011, Underwood lost a substantial amount of money in the stock market. According to court documents, Underwood then devised a plan to use his assistance to U.S. law enforcement as a “cover” for making contact with the Chinese government.  According to his subsequent statements to U.S. law enforcement, Underwood intended to sell his information about and access to the U.S. Consulate to the Chinese MSS for $3 million to $5 million. If any U.S. personnel caught him, he planned to falsely claim he was assisting U.S. law enforcement.

As part of his plan, Underwood wrote a letter to the Chinese MSS, expressing his “interest in initiating a business arrangement with your offices” and stating, “I know I have information and skills that would be beneficial to your offices [sic] goals. And I know your office can assist me in my financial endeavors.”  According to court documents, Underwood attempted to deliver this letter to the offices of the Chinese MSS in Guangzhou, but was turned away by a guard who declined to accept the letter.  Underwood then left the letter in the open in his apartment hoping that the Chinese MSS would find it, as he believed the MSS routinely conducted searches of apartments occupied by Americans.

In May 2011, Underwood secreted a camera into the new U.S. consulate compound and took photographs of a restricted building and its contents. Several of these photographs depict areas or information classified at the Secret level. Underwood also created a schematic that listed all security upgrades to the U.S. consulate and drew a diagram of the surveillance camera locations at the consulate. In addition, according to his subsequent statements to U.S. law enforcement, Underwood “mentally” constructed a plan in which the MSS could gain undetected access to a building at the U.S. consulate to install listening devices or other technical penetrations.

According to court documents, the photographs Underwood took were reviewed by an expert at the State Department’s Bureau of Diplomatic Security who had original classification authority for facilities, security and countermeasures at the U.S. Consulate. The expert determined that several of the photographs contained images classified at the Secret level and that disclosure of such material could potentially cause serious damage to the United States.

In early August 2011, Underwood was interviewed several times by FBI and Diplomatic Security agents, during which he admitted making efforts to contact the Chinese MSS, but falsely claimed that he took these actions to assist U.S. law enforcement.  On Aug. 19, 2011, Underwood was again interviewed by law enforcement agents and he admitted that he planned to sell photos, information and access to the U.S. Consulate in Guangzhou to the Chinese MSS for his personal financial gain.

           After initially being arraigned in this case on Sept. 1, 2011, Underwood was released on his personal recognizance, with certain conditions, including staying within the Washington, D.C. metropolitan area and returning to court for a status hearing on Sept. 21, 2011. Instead of returning to court as promised, Underwood purchased a bicycle, racks, panniers, helmet and multiple energy snack bars. He left a fake suicide note at his hotel room in Springfield, Va. Then, alive and well, he pedaled west out of Springfield and eventually boarded a bus in Wytheville, Va., under a false name. He was arrested on Sept. 24, 2011 in a hotel room in Los Angeles, with over $10,000 in cash and 80,000 Japanese yen. He has been in custody ever since.

The U.S. government has found no evidence that Underwood succeeded in passing classified information concerning the U.S. Consulate in Guangzhou to anyone at the Chinese MSS.

This investigation was conducted jointly by the FBI’s Washington Field Office and the State Department’s Bureau of Diplomatic Security. The prosecution was handled by the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Brandon L. Van Grack from the Counterespionage Section of the Justice Department’s National Security Division.

Three Philippine nationals were convicted today in Los Angeles of illegally importing military grade weapons into the United States after being caught in a sting operation that was conducted in the Philippines, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Bill Lewis, Assistant Director in Charge of the FBI's Los Angeles Field Office. 

Sergio Syjuco, 26, Cesar Ubaldo, 27, and Arjyl Revereza, 26, each of the Philippines, were convicted after a four-week trial by a federal jury in U.S. District Court in the Central District of California of conspiring to illegally import the weapons into the United States, and aiding and abetting the importation of those weapons.  The defendants were charged in an indictment filed on Jan. 12, 2012.

According to the evidence presented at trial, the defendants conspired to sell high-powered military and assault weapons to a buyer interested in bringing weapons into the United States to arm drug dealers in Mexican drug cartels and Mexican Mafia gang members.  In November 2010, Ubaldo met with a prospective weapons buyer, who was actually an undercover FBI agent, and offered to introduce the agent to suppliers of high-powered firearms.  Ubaldo subsequently introduced the undercover agent to Syjuco, who supplied the weapons, and Revereza, who was a police officer in the Philippines Bureau of Customs who facilitated the movement of the illegal weapons through Philippines customs and eventually into the United States.  The weapons supplied included a rocket propelled grenade launcher, a mortar launcher, an M203 single-shot grenade launcher and 12 Bushmaster machine guns, as well as explosives including mortars and grenades.  The trial evidence demonstrated that the defendants also illegally imported into the United States the highest level military body armor.

The weapons, which were tracked and safeguarded by the FBI during their shipment, landed in Long Beach, Calif., on June 7, 2011, where they were seized by the FBI. 

At sentencing, which is scheduled for June 10, 2013, each defendant faces a maximum potential penalty of five years in prison and a $250,000 fine for conspiracy to import weapons into the United States, as well as 20 years in prison and a $1,000,000 fine for causing the importation of all of the weapons, excluding the 12 fully automatic Bushmaster firearms.  In addition, defendants Syjuco and Revereza face a maximum potential penalty of 20 years in prison and a $1,000,000 fine for causing the importation of all of the weapons in this case, and five years in prison and a $250,000 fine for causing the importation of the 12 fully automatic Bushmaster firearms in this case.

The investigation was conducted by agents and investigators of the FBI, the U.S. Secret Service and the Philippine National Bureau of Investigation.  Deputy Chief Kim Dammers and Trial Attorney Margaret Vierbuchen of the Criminal Division’s Organized Crime and Gang Section prosecuted the case.

FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced the investiture of two immigration judges. Deputy Chief Immigration Judge Michael C. McGoings presided over the investiture during a ceremony held at EOIR’s headquarters on March 1, 2013.

After a thorough application process, Attorney General Eric Holder appointed Craig A. Harlow and Sunita B. Mahtabfar to their new positions. “The efficient and timely adjudication of detained aliens’ cases are the highest priority for EOIR,” said McGoings. “The addition of Mr. Harlow and Ms. Mahtabfar to our immigration judge corps will allow us to better address our detained caseload.”

Biographical information follows.

Craig A. Harlow, Immigration Judge, Pearsall Immigration Court

Attorney General Eric Holder appointed Judge Harlow in February 2013. Judge Harlow received a bachelor of arts degree in 1989 from Lubbock Christian University in Lubbock, Texas, and a juris doctorate in 1992 from St. Mary’s University School of Law in San Antonio. From June 2012 to February 2013, he served as an assistant chief counsel, Office of Chief Counsel, U.S. Immigration and Customs Enforcement (ICE), Department of Homeland Security, in Dallas. From October 2010 to May 2012, Judge Harlow served as deputy chief counsel for ICE in Oakdale, La. From September 2007 to September 2010, he was the senior attorney for the New Orleans Office of Chief Counsel. From October 1992 to August 2007, Judge Harlow was an assistant chief counsel for ICE in Oakdale, entering on duty through the Attorney General’ s Honors Program. From May 1991 to August 1991, he was a summer law intern in the Oakdale Immigration Court. Judge Harlow is a member of the State Bar of Texas.

Sunita B. Mahtabfar, Immigration Judge, El Paso Service Processing Center

Attorney General Eric Holder appointed Judge Mahtabfar in February 2013. Judge Mahtabfar received a bachelor of arts degree in 1994 from the University of Texas at Austin in Austin, Texas, and a juris doctorate in 1998 from Thurgood Marshall School of Law in Houston. From November 2006 to February 2013, she served as an attorney in the Office of the Assistant Chief Counsel, U.S. Customs and Border Protection, Department of Homeland Security (DHS), in El Paso, Texas. From February 2003 to November 2006, she served as an asylum officer for U.S. Citizenship and Immigration Services, DHS, in Houston. From June 2000 to February 2003, Judge Mahtabfar served as a staff attorney for the Department of Public Safety in Houston. Judge Mahtabfar is a member of the State Bar of Texas.

- 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.

William B. Clayton, a residential builder formerly of Corolla, N.C., pleaded guilty today before Judge Terrence W. Boyle to corruptly obstructing and impeding the due administration of the tax laws, the Justice Department and the Internal Revenue Service (IRS) announced.

According to the indictment, Clayton failed to file federal income tax returns over a six-year period, resulting in the assessment of taxes and penalties and the initiation of IRS collection proceedings. Between May 2007 and August 2010, Clayton took steps to obstruct the IRS’s efforts to collect his unpaid tax liabilities, such as concealing property from the IRS and destroying a former property in Corolla that had been acquired by the government. According to court records, in an effort to pay down Clayton’s tax liabilities, the IRS scheduled a public auction of Clayton’s former property. In the days leading up to the auction, Clayton committed, or caused the commission of, various acts of destruction and demolition at the Corolla property, including destroying an outdoor pool deck and pool house, forcibly removing a guest house from the property and transporting it to a non-consenting neighbor’s property, and forcibly removing cabinets, counter tops, a kitchen island, sinks, toilets, and light fixtures.

Clayton’s sentencing hearing is scheduled for May 28, 2013. Clayton faces a maximum potential penalty of three years’ imprisonment, one year of supervised release, and a $250,000 fine.

The investigation of this case was conducted by IRS-Criminal Investigation. The case is being prosecuted by Trial Attorney Adam Hulbig of the Justice Department’s Tax Division.