District Not Recorded

 A former U.S. Army staff sergeant pleaded guilty today to accepting thousands of dollars in bribes from contractors while he was deployed to Iraq, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Eastern District of Tennessee William C. Killian.

Richard A. Gilliland, 44, of Fayetteville, Tenn., pleaded guilty before U.S. Magistrate Judge Susan K. Lee in the Eastern District of Tennessee to a criminal information charging him with one count of conspiracy to accept illegal bribes.

According to court documents, from October 2007 until November 2008, Gilliland was a U.S. Army staff sergeant who worked with the Civil Affairs Unit at Camp Victory in Iraq and also was assigned as a pay agent responsible for U.S. government funds.  As a pay agent, Gilliland was responsible for paying contractors to perform work in accordance with civil development objectives set forth by U.S. Army commanders in furtherance of the strategic mission of Coalition Forces in Iraq. 

While deployed to Iraq in October 2007, Gilliland worked closely with two Iraqi contracting companies and their American representatives.  Gilliland admitted to receiving approximately $27,200 and a laptop in bribes from American representatives of the contracting companies in return for his attempt to influence contracts for the Iraqi-based contractors and his assistance in acquiring used and non-working generators from the Defense Reutilization and Marketing Office.  After receiving the bribes, Gilliland wired the cash payments he received back to the United States.

The case is being prosecuted by Special Trial Attorney Mark Grider of the Criminal Division’s Fraud Section, on detail from the Special Inspector General for Iraq Reconstruction (SIGIR), and Assistant U.S. Attorney John MacCoon of the Eastern District of Tennessee.  The case was investigated by SIGIR.

Matthew Pendley, 26, a former corrections officer at the Bernalillo County Metropolitan Detention Center (MDC) in Albuquerque, N.M., pleaded guilty today to one count of obstructing justice when he lied to law enforcement during their investigation of the assault on an inmate at the hands of another corrections officer.

 

According to court documents, during the early morning hours of Dec. 21, 2011, Pendley was assigned to the Receiving-Discharge-Transfer (RDT) Unit at MDC where individuals are brought to be booked soon after they are arrested. During the course of his shift, Pendley entered the shower room/dress out area and witnessed Demetrio Gonzales, another corrections officer, assaulting an inmate. The inmate was not posing a physical threat to anyone, and therefore, the assault was not justified. There was no legitimate law enforcement purpose for Gonzales to use force on the inmate. As a result of the assault, the inmate sustained injuries and began bleeding. When the Bernalillo County Sheriff’s Office (BCSO) began investigating, instead of telling detectives that he witnessed the assault, Pendley lied, claiming that he did not remember what Gonzales was doing in the shower room/dress out area.

 

A sentencing date has not yet been set.

 

Demetrio Gonzales previously pleaded guilty to violating the civil rights of the inmate by choking and striking the inmate multiple times. He was sentenced on Jan. 8, 2013, to 33 months in prison followed by three years of supervised released.

 

A third former MDC corrections officer, Kevin Casaus, was also indicted by a federal grand jury in June 2012 on related charges. Casaus is charged with violating the victim’s civil right rights when he shoved and struck the victim while in the shower area/dress out area. Casaus is further charged with obstruction of justice and falsification of records, first for making false statements to detectives of the BCSO and then for falsifying his incident report. Casaus’ trial is set for March 4, 2013. He is presumed innocent unless proven guilty.

 

This case is being 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.

WASHINGTON – La División de Derechos Civiles del Departamento de Justicia anunció hoy el lanzamiento de su primer video educativo en español. El video fue elaborado por la Oficina del Consejero Especial [Office of Special Counsel (OSC)] para Prácticas Injustas de Empleo Relacionadas a la Inmigración para ayudar a los empleadores a evitar cargos de discriminación durante el proceso del Formulario I-9 de Verificación de Elegibilidad para el Empleo y para ayudar a los empleados a enterarse de sus derechos legales.  La OSC hace cumplir la provisión contra la discriminación que contiene la Ley de Inmigración y Nacionalidad [Immigration and Nationality Act (INA)], la que prohíbe a los empleadores el discriminar en la contratación, el despido, el reclutamiento o la recomendación a personas autorizadas para trabajar, independientemente de su estado de ciudadanía u origen nacional. Asimismo, la ley prohíbe la discriminación durante los procesos del Formulario I-9 y de Verificación Electrónica [E-Verify].

La OSC elaboró un video sobre este tema llevado frecuentemente a la atención de la OSC por medio de llamadas a su línea directa y cargos presentados por empleados. Los empleadores suelen creer incorrectamente que necesitan verificar de nuevo la autorización de trabajo de trabajadores que tienen el status  de residente permanentes cuando sus Tarjetas de Residente Permanente [Permanent Resident Cards or Green Card] se vencen.  El nuevo video de la OSC aclara esta práctica y explica que esto no está permitido y que puede ser motivo de reclamos bajo la provisión contra la discriminación.

“Creemos que este video ayudará tanto a los empleadores como a los empleados de todo el país a comprender las normas de verificación de la elegibilidad para el empleo y que también ayudará a los residentes permanentes legales a conservar sus empleos”, dijo Thomas E. Perez, Secretario de Justicia Auxiliar de la División de Derechos Civiles.  “La ley federal prohíbe la discriminación en el proceso de verificación de elegibilidad para el empleo, y el Departamento de Justicia se compromete a hacer cumplir la ley”. 

Se puede observar el video en español en:  www.youtube.com/watch?v=HLps_3sWJxk
Una versión del mismo video con subtítulos en inglés se puede observar en :  www.youtube.com/watch?v=XWRSMNFxxKY
El video es parte de la serie de videos educativos de la OSC lanzo en el 2012. La OSC también opera una línea directa para empleadores y trabajadores, frecuentemente orientando a los empleadores acerca de cómo evitar la discriminación y educando a los  al respecto de sus derechos protegidos por la provisión contra la discriminación. La OSC ofrece ‘webinars’ o seminarios por internet en vivo para educar a los empleadores acerca de cómo evitar la discriminación en el trabajo y educar a los empleados respecto de sus derechos. El próximo seminario por internet en español se dará a cabo hoy febrero 20 del 2013 a las 3:00pm tiempo del Este.  Usted se puede registrar por internet en: http://www.justice.gov/crt/about/osc/webinars.php.  Para obtener más información sobre las protecciones contra la discriminación laboral  bajo la ley de inmigración, llame a la línea directa del trabajador de la OSC al: 1-800-255-7688 (1-800-237-2525, TDD para las personas con problemas auditivos); llame a la línea directa del empleador de la OSC al: 1-800-255-8155 (1-800-362-2735, TDD para las personas con problemas auditivos); envíe un mensaje de correo electrónico u ‘email’ a: osccrt@usdoj.gov; o visite el portal en Internet de la OSC, www.justice.gov/crt/about/osc. 

The Department of Justice Civil Rights Division and the U.S. Attorney’s Office for the District of Connecticut announced today, together with the town of East Haven, Conn., and the East Haven Board of Police Commissioners, they have selected Kathleen O’Toole as the Joint Compliance Expert (JCE) to assess and report on the implementation of a comprehensive settlement agreement to reform the East Haven Police Department (EHPD).  The district court approved the agreement on Dec. 21, 2012.

 

Under the agreement, the JCE will assist in determining whether the terms of the agreement have been fully and timely implemented. The JCE’s assessment will include a thorough review of EHPD’s policies, training curricula, standard operating procedures, plans, protocols and other operational documents related to the agreement. The JCE will also assess whether the implementation of the agreement is resulting in constitutional policing, increased community trust, and the professional treatment of individuals by EHPD officers.

 

Following a joint review that included multiple candidates, the parties selected Ms. O’Toole to serve as JCE. She brings extensive policing experience and a collaborative compliance framework that will assist the parties, the court, and other stakeholders to evaluate the implementation of critical reforms by EHPD. Ms. O’Toole is an internationally-recognized leader in the law enforcement field and recently completed a six-year term as Chief Inspector of the Garda Síochána Inspectorate, an oversight body responsible for bringing reform, best practice, and accountability to the Irish national police service. Previously, she worked her way up the ranks of the Boston Police Department, beginning as a patrol officer and eventually serving as Boston Police Commissioner. Ms. O’Toole also served as Massachusetts Secretary of Public Safety. Ms. O’Toole intends to hire several other police experts to assist her in assessing compliance with the agreement. She will begin her work as JCE immediately.

 

“We are pleased to have worked collaboratively with the town to select Ms. O’Toole, who we believe is uniquely positioned to assess and report on the East Haven Police Department’s reform efforts,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “We look forward to working together with Ms. O’Toole and the town to ensure effective and constitutional policing by the East Haven Police Department.”

 

U.S. Attorney David Fein commented, “I am pleased that the joint selection of Kathleen O’Toole as the Joint Compliance Expert will now allow the real work to begin on the implementation of the settlement agreement approved by the court.”

 

The full text of the settlement agreement is available at www.justice.gov/crt/about/spl/findsettle.php .  For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt .

The Justice Department announced today that Texas Champion Bank of Alice, Texas, will establish uniform pricing policies, conduct employee training and pay $700,000 as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of national origin.

 

The settlement, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Southern District of Texas. The complaint alleges that Texas Champion charged higher prices on unsecured consumer loans made to His panic borrowers through its branch offices in violation of the Equal Credit Opportunity Act (ECOA).

 

“The complaint filed today demonstrates that the Civil Rights Division is committed to fair lending enforcement across the entire spectrum of credit markets,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “We commend Texas Champion for working cooperatively with the Justice Department in reaching an appropriate resolution of this case.”

 

The lawsuit originated from a 2010 referral by the Federal Deposit Insurance Corporation (FDIC) to the Justice Department’s Civil Rights Division. Texas Champion is a member of the FDIC.

 

Under the settlement, Texas Champion will pay $700,000 to approximately 2,000 Hispanic victims of discrimination, monitor its loans for potential disparities based on national origin, and provide equal credit opportunity training to its employees. Texas Champion will also revise its pricing policies to ensure that the price charged for its loans is set in a non-discriminatory manner consistent with the requirements of ECOA. The agreement also prohibits the bank from discriminating on the basis of national origin in any aspect of a credit transaction.

 

“The Southern District of Texas is committed to ensuring banks and other lending institutions do not discriminate against borrowers on the basis of race or national origin,” said U.S. Attorney for the Southern District of Texas Kenneth Magidson. “The consent order filed today should serve as a reminder that discrimination in lending will not be tolerated.”

 

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 24 lending matters under the Fair Housing Act, ECOA, and the Servicemembers Civil Relief Act. The settlements in these matters provide for a minimum of $660 million in monetary relief for impacted communities and more than 300,000 individual borrowers. The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at http://www.justice.gov/crt/publications .

 

The Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Texas, and the FDIC are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov .

 

A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at www.justice.gov/fairhousing .

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 Feb. 15, 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.

Executive Office for Immigration Review

WASHINGTON – The U.S. Trustee Program has filed in bankruptcy court a national settlement with law firm Kaye Scholer LLP in the bankruptcy case of GSC Group, Inc. If approved by the Bankruptcy Court for the Southern District of New York, the proposed settlement will resolve the U.S. Trustee’s allegations that Kaye Scholer failed to make accurate and complete disclosures in the case. In particular, the U.S. Trustee alleged that Kaye Scholer filed inaccurate documents about its retention as counsel to the chapter 11 debtor.

Under the proposed settlement, Kaye Scholer will pay $1.5 million; adopt policies and procedures approved by an independent expert to ensure the accuracy and completeness of disclosure, including checks for conflicts of interest and assurance that attorneys review documents filed in their name; establish a special compliance review committee to certify under penalty of perjury the law firm’s continuing compliance; and provide training to its attorneys and other staff to ensure the accuracy and completeness of documents it files in bankruptcy court.

If approved by the bankruptcy court, the settlement will mark the first time the U.S. Trustee Program has obtained relief that includes an independent expert’s review of a law firm’s practices.

“Leading law firms are not above the bankruptcy rules of disclosure and other professional obligations, and this agreement shows that violations will be addressed transparently and appropriately,” stated Clifford J. White III, Director of the Executive Office for U.S. Trustees. “I am pleased that Kaye Scholer has agreed to monetary remedies and independent review of its practices, so that the practices of the law firm, from senior partners on down, will be improved in the future.”

Director White noted that “the relief provided in this settlement, in conjunction with relief agreed to by financial adviser Capstone Advisory Group LLC in this same case, should cause all professionals in the bankruptcy system to review their own internal practices. Professionals in large bankruptcy cases are paid extraordinary sums of money, and failing to follow the rules pertaining to disclosure of possible conflicts of interest and related matters is not acceptable.”

Director White also commended U.S. Trustee Tracy Hope Davis for bringing the original action in the bankruptcy court in Manhattan, as well as attorneys who worked on the case, including Trial Attorney Andrea Schwartz of the U.S. Trustee’s Office in Manhattan and Trial Attorney Carole Ryczek of the U.S. Trustee’s Office in Madison, Wis.

The case is In re GSC Group Inc., U.S. Bankruptcy Court, Southern District of New York, No. 10-14653.

Contact:

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

Lender Processing Services Inc. (LPS), a publicly traded mortgage servicing company based in Jacksonville, Fla., has agreed to pay $35 million in criminal penalties and forfeiture to address its participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States. The settlement, which follows a felony guilty plea from the chief executive officer of wholly owned LPS subsidiary DocX LLC, was announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Middle District of Florida Robert E. O’Neill.

 

The non-prosecution agreement, which LPS entered into today with the U.S. Department of Justice and the U.S. Attorney’s Office for the Middle District of Florida, requires the company to make the payment and meet a series of other conditions.

 

Lorraine Brown, the former CEO of DocX LLC, pleaded guilty on Nov. 20, 2012, in federal court in Jacksonville to conspiracy to commit mail and wire fraud. During her guilty plea, Brown admitted to her leadership role in the scheme.

 

LPS has taken a number of remedial actions to address the misconduct at DocX. Among other things, LPS has wound down all of DocX’s operations, re-executed and re-filed mortgage assignments as appropriate and terminated Brown and others. LPS has also demonstrated changes in its compliance, training and overall approach to ensuring its adherence to the law, and has retained an independent consultant to review and report on LPS’s document execution practices; assess related operational, compliance, legal and reputational risks; and establish a plan for reimbursing any financial injuries to mortgage servicers or borrowers.

 

According to the statement of facts accompanying the agreement, before its wind-down, DocX was in the business of assisting residential mortgage servicers with creating and executing mortgage-related documents to be filed with property recorders’ offices throughout the United States. Employees of DocX, at the direction of Brown and others, falsified signatures on the documents. Through this scheme and unbeknownst to the clients, Brown and subordinates at DocX directed authorized signers to allow other, unauthorized personnel to sign and to have documents notarized as if they were executed by authorized signers. These signing practices were used at DocX from at least March 2003 until late 2009, and were implemented to increase profits.

Also to increase profits, Brown hired temporary workers to sign as authorized signers. These temporary employees would sign mortgage-related documents at a much lower cost and without the quality controls represented to clients. These documents were then falsely notarized by employees at DocX, allowing the fraud scheme to remain undetected.

 

After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country. Many of these documents – particularly mortgage assignments, lost note affidavits and lost assignment affidavits – were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions.

 

In entering into the non-prosecution agreement with LPS, the Justice Department took several factors into consideration. Soon after discovering the misconduct at DocX, LPS conducted a thorough internal investigation, reported all of its findings to the government, cooperated with the government’s investigation and effectively remediated any problems it discovered. The government’s investigation also revealed that Brown and others at DocX took various steps to actively conceal the misconduct from detection, including from LPS senior management and auditors.

 

Brown, 51, of Alpharetta, Ga., faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. She is scheduled to be sentenced on April 23, 2013, before U.S. District Judge Henry Lee Adams Jr. in Jacksonville.

 

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

 

Today’s disposition is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). 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.

Related Materials:

LPS Non-Prosecution Agreement
LPS Statement of Facts

A Gainesville, Fla., woman was sentenced today to serve one year and one day in prison for her role in the obstruction of a multinational investigation into the disappearance of her husband, then an employee in the U.S. Consulate in Curacao, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Pamela C. Marsh for the Northern District of Florida, Director of the U.S. State Department’s Diplomatic Security Service ( DSS) Gregory B. Starr and Special Agent in Charge of the FBI’s Miami Field Office Michael B. Steinbach.

Abby Beard Hogan, 50, was sentenced by U.S. District Judge M. Casey Rodgers in the Northern District of Florida. In addition to her prison term, Hogan was sentenced to two years of supervised release. On March 29, 2012, Hogan pleaded guilty before U.S. Magistrate Judge Gary R. Jones to one count of obstruction of justice.

 

According to court documents, on the night of Sept. 24, 2009, Abby Hogan’s husband, James Hogan, an employee at the U.S. Consulate in Curacao, a Caribbean island that was part of the Netherlands Antilles, left his home on foot and subsequently disappeared. In the early hours of Sept. 25, 2009, James Hogan called his wife and spoke for approximately three minutes. The next day, when James Hogan failed to report to work, the U.S. government and Dutch and Antillean law enforcement launched an island-wide search and opened an investigation into Hogan’s disappearance. On Sept. 25, 2009, a diver located James Hogan’s blood-stained clothing on a local beach.

 

According to evidence submitted in Abby Hogan’s sentencing hearing, she repeatedly provided false information to U.S. law enforcement about the time period before James Hogan’s disappearance and withheld relevant information. Abby Hogan initially told investigators that, before his disappearance, she and her husband had an argument. She subsequently modified that statement and claimed that there had been no argument, just a minor disagreement over her husband’s next assignment for the State Department.  Abby Hogan further told U.S. law enforcement agents that James Hogan had been in a “good mood” prior to leaving for his walk on the evening of his disappearance. She repeatedly denied that there had been any marital problems or that her husband had been upset or depressed in any way.  Abby Hogan further stated that she could not remember the full three-minute conversation before her husband disappeared because she was sound asleep when her husband called. She claimed she fell back asleep after the call, and did not awake until the following morning. In fact, all of these statements were false, as established by the deleted emails and other computer forensic evidence , which was submitted to the court.

 

According to court documents, after law enforcement interviews, between Sept. 30, 2009, and Jan. 15, 2010, Abby Hogan deleted more than 300 emails from her email account. These emails contained information that Abby Hogan knew was relevant to specific questions she had been asked by U.S. law enforcement. The emails also contained information that she had either previously misrepresented or knowingly omitted during her interviews with law enforcement, including that she was engaged in an extramarital affair; the night James Hogan disappeared, the couple had argued, and he left the house angry and upset; and that she did not want law enforcement to know what had happened that evening.

 

The case was prosecuted by Senior Trial Attorney Teresa Wallbaum of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Frank Williams for the Northern District of Florida. The Criminal Division’s Office of International Affairs provided assistance. The case was investigated by DSS and the FBI’s Miami Field Office and Legal Attaché Office in Bridgetown, Barbados. Assistance was also provided by Curacao law enforcement authorities.

The U.S. Department of Justice and the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) announced today the establishment of a National Commission on Forensic Science as part of a new initiative to strengthen and enhance the practice of forensic science.

 

The National Commission on Forensic Science will be composed of approximately 30 members, bringing together forensic science service practitioners, academic researchers, prosecutors, defense attorneys, judges and other relevant stakeholders to develop policy recommendations for the Attorney General. The commission will consider guidance on practices for federal, state and local forensic science laboratories developed by groups of forensic science practitioners and academic researchers administered by NIST.

 

“Forensic science is an essential tool in the administration of justice and needs to be continually evaluated as science progresses,” said Deputy Attorney General James M. Cole. “Forensic science helps identify perpetrators, convict the guilty, exonerate the innocent, and protect public safety. This initiative is led by the principle that scientifically valid and accurate forensic analysis strengthens all aspects of our justice system.” 

 

“The Department of Justice and the National Institute of Standards and Technology have a history of successful collaboration,” said Under Secretary of Commerce for Standards and Technology and NIST Director Patrick Gallagher. “Through this initiative, we will work even more closely with the forensic science community to strengthen the forensic science system.”

 

The commission will have responsibility for developing guidance concerning the intersections between forensic science and the courtroom and developing policy recommendations, including uniform codes for professional responsibility and requirements for training and certification.

 

The new initiative provides a framework for coordination across forensic disciplines under federal leadership, with state and local participation. The Department of Justice, through its involvement in the commission, will take an active role in developing policy recommendations and coordinating implementation. The NIST-administered guidance groups will develop and propose discipline-specific practice guidance that will become publicly available and be considered for endorsement by the commission and the Attorney General. This coordinated effort will help to standardize national guidance for forensic science practitioners. Additionally, NIST will continue to develop methods for forensic measurements and validate select existing forensic science standards.

 

Specific criteria for membership will be announced in an upcoming Federal Register notice, and applicants will have 30 days from the publication of the notice to submit their applications.

 

As a non-regulatory agency of the U.S. Department of Commerce, NIST promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards and technology in ways that enhance economic security and improve our quality of life. To learn more about NIST, visit www.nist.gov .

WASHINGTON – The U.S. Trustee Program has filed in bankruptcy court a national settlement with financial adviser Capstone Advisory Group LLC in the bankruptcy case of GSC Group, Inc. If approved by the Bankruptcy Court for the Southern District of New York, the proposed settlement will resolve the U.S. Trustee’s allegations that Capstone failed to make accurate and complete disclosures to support the bankruptcy court’s approval of its employment in the case. In particular, the U.S. Trustee alleged that Capstone made inaccurate representations about its relationship with a contractor assigned to lead its engagement and to perform work in the case.

Under the proposed settlement, Capstone will pay $1 million; waive an additional success fee of $2.75 million; adopt policies and procedures approved by an independent monitor to ensure accurate and complete disclosure, including with respect to employment of contractors and conflicts of interest; and undergo compliance reviews by the monitor for two years.

If approved by the bankruptcy court, the settlement will mark the first time the U.S. Trustee Program has obtained relief that includes an independent monitor’s review of a professional firm.

“This important settlement shows that the U.S. Trustee Program will take vigorous enforcement action when we uncover evidence that experienced professional firms have failed to satisfy their bedrock obligations to provide true and complete facts to the U.S. Trustee and the bankruptcy court,” stated Clifford J. White III, Director of the Executive Office for U.S. Trustees.  “I commend Capstone for recognizing the seriousness of this matter by voluntarily accepting significant financial consequences and subjecting itself to independent review to ensure that similar conduct does not recur.”

Director White also commended U.S. Trustee Tracy Hope Davis for bringing the original action in the bankruptcy court in Manhattan, as well as attorneys who worked on the case, including Trial Attorney Andrea Schwartz of the U.S. Trustee’s Office in Manhattan and Trial Attorney Carole Ryczek of the U.S. Trustee’s Office in Madison, Wis.

The USTP also reached agreement with the contractor and his affiliated companies.

The case is In re GSC Group Inc., U.S. Bankruptcy Court, Southern District of New York, No. 10-14653.

Contact:

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

Transocean Deepwater Inc. pleaded guilty today to a violation of the Clean Water Act (CWA) for its illegal conduct leading to the 2010 Deepwater Horizon disaster, and was sentenced to pay $400 million in criminal fines and penalties, Attorney General Holder announced today. 

In total, the amount of fines and other criminal penalties imposed on Transocean are the second-largest environmental crime recovery in U.S. history – following the historic $4 billion criminal sentence imposed on BP Exploration and Production Inc. in connection with the same disaster.

“Transocean’s guilty plea and sentencing are the latest steps in the department’s ongoing efforts to seek justice on behalf of the victims of the Deepwater Horizon disaster,” said Attorney General Holder. “Most of the $400 million criminal recovery – one of the largest for an environmental crime in U.S. history – will go toward protecting, restoring and rebuilding the Gulf Coast region.”

“The Deepwater Horizon explosion was a senseless tragedy that could have been avoided,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.  “Eleven men died, and the Gulf’s waters, shorelines, communities and economies suffered enormous damage.  With today’s guilty plea, BP and Transocean have now both been held criminally accountable for their roles in this disaster.”

Transocean’s guilty plea was accepted, and the sentence was imposed, by U.S. District Judge Jane Triche Milazzo of the Eastern District of Louisiana.  During the guilty plea and sentencing proceeding, Judge Milazzo found, among other things, that the sentence appropriately reflects Transocean’s role in the offense conduct, and that the criminal payments directed to the National Academy of Sciences and National Fish and Wildlife Foundation are appropriately designed to help remedy the harm to the Gulf of Mexico caused by Transocean’s actions.  The judge also noted that the fines and five year probationary period provide just punishment and adequate deterrence.

Transocean pleaded guilty to an information, previously filed in federal court in New Orleans, charging the company with violating the CWA.  During the guilty plea proceeding today, Transocean admitted that members of its crew onboard the Deepwater Horizon, acting at the direction of BP’s well site leaders, known as “company men,” were negligent in failing to investigate fully clear indications that the Macondo well was not secure and that oil and gas were flowing into the well.

The criminal resolution is structured to directly benefit the Gulf region.  Under the order entered by the court pursuant to the plea agreement, $150 million of the $400 million criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill.  This portion of the criminal recovery will also be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the spill.  An additional $150 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.

Transocean was also sentenced, according to the plea agreement, to five years of probation – the maximum term of probation permitted by law.

A separate proposed civil consent decree, which resolves the United States’ civil CWA penalty claims, imposes a record $1 billion civil Clean Water Act penalty, and requires significant measures to improve performance and prevent recurrence, is pending before U.S. District Judge Carl J. Barbier of the Eastern District of Louisiana.

The charges and allegations pending against individuals in related cases are merely accusations, and those individuals are considered innocent unless and until proven guilty.

The guilty plea and sentencing announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill.  The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the director of the task force.  The task force includes prosecutors from the Criminal Division and the Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana, as well as other U.S. Attorneys’ Offices; and investigating agents from:  the FBI; Environmental Protection Agency, Criminal Investigative Division; Environmental Protection Agency, Office of Inspector General; Department of Interior, Office of Inspector General; National Oceanic and Atmospheric Administration, Office of Law Enforcement; U.S. Coast Guard; U.S. Fish and Wildlife Service; and the Louisiana Department of Environmental Quality.

This case was prosecuted by Deepwater Horizon Task Force Director John D. Buretta, Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black and Rohan Virginkar.

A former employee at the Marine Corps Logistics Base Albany pleaded guilty today to receiving bribes related to the award of contracts for machine products, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.

Michelle Rodriguez, 32, of Albany, Ga., pleaded guilty before U.S. District Judge W. Louis Sands in the Middle District of Georgia to one count of bribery of a public official.

During her guilty plea, Rodriguez, who worked as a supply technician in the Maintenance Center Albany (MCA), admitted to participating in a scheme to award contracts for machine products to companies operated by Thomas J. Cole and Frederick Simon, both of whom pleaded guilty to bribery charges in January 2013.

According to court documents, the MCA is responsible for rebuilding and repairing ground combat and combat support equipment, much of which has been used in military missions in Afghanistan, Iraq and other parts of the world.  To accomplish the scheme, Rodriguez would transmit bid solicitations to Simon by fax or email, usually following up with a text message specifying how much the company seeking the contract should bid.  Simon, with Cole’s knowledge, would then bid the amount specified by Rodriguez on each order, which was normally higher than fair market value.  Rodriguez was paid $75.00 cash per order.  Rodriguez admitted during today’s hearing that she awarded Cole and Simon’s companies nearly 1,300 machine product orders, all in exchange for bribes.

Rodriguez also admitted that in 2011, she began routing some orders through a second company, owned by Cole, because the volume of orders MCA placed with the first company was so high.  Rodriguez admitted receiving approximately $161,000 in bribes during the nearly two-year scheme.  Cole and Simon previously admitted to personally receiving approximately $209,000 and $74,500 in proceeds from the scheme, respectively.  Rodriguez, Cole and Simon all conceded that the total loss to the Department of Defense from overcharges associated with the machine product orders placed during the scheme was approximately $907,000.

At sentencing, Rodriguez faces a maximum potential penalty of 15 years in prison and a fine of twice the gross gain or loss from the offense.  As part of her plea agreement with the United States, Rodriguez agreed to forfeit the bribe proceeds she received from the scheme, as well as to pay full restitution to the Department of Defense.  The plea agreement also required her to resign her position at the MCA.  Sentencing is scheduled for April 25, 2013.

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

Gilbert T. Lopez Jr., the former chief accounting officer of Stanford Financial Group Company, and Mark J. Kuhrt, the former global controller of Stanford Financial Group Global Management, were each sentenced today to 20 years in prison for their roles in helping Robert Allen Stanford perpetrate a fraud scheme involving Stanford International Bank (SIB).  Both were convicted by a Houston federal jury on Nov. 19, 2012.
  
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Kevin Perkins of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell; and Special Agent in Charge Lucy Cruz of Internal Revenue Service-Criminal Investigation.

The trial against Lopez and Kuhrt spanned five weeks.  After approximately three days of deliberations, the jury found both Lopez, 70, and Kuhrt, 40, both of Houston, guilty of 10 of 11 counts in the indictment.  Each defendant was convicted of one count of conspiracy to commit wire fraud and nine counts of wire fraud.  Each was found not guilty on one wire fraud count.  Both defendants were taken into custody immediately following the jury’s verdict.

In addition to the prison terms, U.S. District Judge David Hittner, who presided over the trial, sentenced Lopez and Kuhrt to serve three years of supervised release and ordered Lopez to pay a $25,000 fine.  At today’s hearing, Judge Hittner also found that both defendants obstructed justice by committing perjury at trial. 

Stanford, who was previously convicted in a separate trial, illegally used billions of dollars of SIB’s assets to fund his personal business ventures, to live a lavish lifestyle and for other improper purposes.  He was later sentenced to 110 years in prison. James M. Davis, Stanford’s chief financial officer – who pleaded guilty and cooperated with the government soon after SIB was shut down in February 2009 and testified at both Stanford’s trial and the trial of Lopez and Kuhrt – was sentenced to 60 months in prison for his role in the scheme.

The evidence presented at Lopez and Kuhrt’s trial established that they were aware of and tracked Stanford’s misuse of SIB’s assets, kept the misuse hidden from the public and from almost all of Stanford’s other employees and worked behind the scenes to prevent the misuse from being discovered.  They also helped Stanford falsely represent to SIB customers during the economic crash in late 2008 that Stanford had infused hundreds of millions of dollars into SIB when he had not.  As part of that effort, Lopez and Kuhrt helped design a fraudulent real estate transaction that involved falsely inflating parcels of land purchased at $63.5 million to a purported value of $3.2 billion.

The investigation was conducted by the FBI, U.S. Postal Inspection Service, IRS-CI and the U.S. Department of Labor, Employee Benefits Security Administration.  The case was prosecuted by Deputy Chief Jeffrey Goldberg and Trial Attorney Andrew Warren of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorney Jason Varnado of the Southern District of Texas.

David Hausman, an antiques dealer in Manhattan, was sentenced today in Manhattan federal court to six months in jail for obstruction of justice and creating false records in connection with illegal rhinoceros horn trafficking, announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, and Preet Bharara, U.S. Attorney for the Southern District of New York.

In addition to the jail term, the judge sentenced Hausman, 67, of New York, N.Y., to pay a $10,000 fine to the Lacey Act Reward Fund and $18,000 to the Rhino Tiger Conservation Fund.  Hausman was also sentenced to one year of supervised release to follow his sentence and ordered to pay a $200 special assessment fee.

In his July 2012 guilty plea, Hausman admitted that he committed these offenses while holding himself out to the U.S. Fish & Wildlife Service (FWS) as an antiques expert who purportedly wanted to help the agency investigate rhinoceros horn trafficking. Hausman was arrested in February 2012 as part of “Operation Crash,” a nationwide, multi-agency crackdown on those involved in the black market trade of endangered rhinoceros horn. 
 
“Mr. Hausman’s blatant deception of officers conducting a federal investigation was illegal and reprehensible,” said Assistant Attorney General Moreno. “He posed as someone who was protecting this endangered species when he was really obtaining and using inside information to further the illegal trade in black rhino horns. We will vigorously prosecute all those who violate the wildlife protection laws enacted by Congress to protect endangered species like the black rhinoceros from extinction.”

“With today’s sentence, David Hausman now knows that trafficking in endangered, and legally protected species, and obstructing law enforcement’s ability to do its job have grave consequences,” said U.S. Attorney Bharara.”   

“Rhino populations across the globe are being decimated by poachers seeking to meet rising demand for rhino horn for ceremonial purposes and as a traditional ‘medicine,’ despite the fact that it has no demonstrable medicinal benefits,” said U.S. Fish & Wildlife Service Director Dan Ashe.  “As this week's arrests and sentencing demonstrate, we continue to work with the Department of Justice and international law enforcement agencies to do everything we can to shut this trafficking down and hold perpetrators responsible under the law.”

Background on Operation Crash

Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth.   They have no known predators other than humans.  All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. 

Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.  Nevertheless, the demand for Rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. 

Operation Crash is a continuing investigation being conducted by the Department of the Interior’s FWS in coordination with other federal and local law enforcement agencies including U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  A “crash” is the term for a herd of rhinoceros.  Operation Crash is an ongoing effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns. 
Hausman’s Offenses

According to the information, plea agreement and statements made during court proceedings: 

In December 2010, Hausman – while purporting to help the government crack down on illegal rhinoceros trading – advised FWS that the taxidermied head of a black rhinoceros containing two horns had been illegally sold by a Pennsylvania auction house.  Upon learning that the sale was not finalized, Hausman covertly purchased the rhinoceros mount himself, using a “straw buyer” to conceal that he was the true purchaser because federal law prohibits interstate trafficking in endangered species.  Hausman instructed the straw buyer not to communicate with him about the matter by email to avoid creating a paper trail that could be followed by law enforcement.  After the purchase was completed, Hausman directed the straw buyer to remove the horns and mail them to him.  He then made a realistic set of fake horns using synthetic materials and directed the straw buyer to attach them on the rhinoceros head in order to deceive law enforcement in the event that they conducted an investigation.  After his arrest, Hausman contacted the straw buyer and they agreed that the rhinoceros mount should be burned or concealed. 

In a second incident, in September 2011, Hausman responded to an internet offer to sell a (different) taxidermied head of a black rhinoceros containing two horns.  Unbeknownst to Hausman, the on-line seller was an undercover federal agent.  Before purchasing the horns on Nov. 15, 2011, Hausman directed the undercover agent to send him an email falsely stating that the mounted rhinoceros was over 100 years old, even though the agent had told him that the rhinoceros mount was only 20 to 30 years old.  There is an antique exception for certain trade in rhinoceros horns that are over 100 years old.  By falsifying the age of the horns, Hausman sought to conceal his illegal conduct.  Hausman also insisted on a cash transaction and told the undercover agent not to send additional emails so there would be no written record.  After buying the black rhinoceros mount at a truck stop in Princeton, Ill., agents followed Hausman and observed him sawing off the horns in a motel parking lot. 

At the time of his arrest, FWS agents seized four rhinoceros heads from Hausman’s apartment as well as six black rhinoceros horns – two of which were the horns he was seen sawing off in the parking lot – numerous carved and partially carved rhinoceros horns, fake rhinoceros horns and $28,000 in cash. 

U.S. Attorney Bharara and Assistant Attorney General Moreno commended FWS and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Newark for their outstanding work in this investigation.

The case is being handled by the U.S. Attorney’s Complex Frauds Unit and the Environmental Crimes Section of the U.S. Department of Justice’s Environment and Natural Resources Division.  Assistant U.S. Attorney Janis M. Echenberg and Richard A. Udell, a Senior Trial Attorney with the Justice Department’s Environmental Crimes Section, are in charge of the prosecution.

A federal court in Cleveland has barred MAI-designated real estate appraiser Michael Ehrmann and his firm, Jefferson & Lee Appraisals Inc., from preparing property appraisals for federal tax purposes, the Justice Department announced today. Judge Dan Aaron Polster of the U.S. District Court for the Northern District of Ohio signed the civil injunction order against Ehrmann and Jefferson & Lee Appraisals. The defendants consented to the injunction without admitting the allegations against them.

Federal law allows a taxpayer in certain limited circumstances to claim a charitable deduction for the value of a conservation easement donated to a qualified organization. The easement’s value must be determined by a qualified appraiser. According to the government complaint, Ehrmann’s appraisals repeatedly overstated the value of conservation easements placed on historic properties, including the Book Cadillac Hotel in Detroit and the Powerhouse Building in the Flats District of Cleveland.

In its complaint, the government contends that Ehrmann distorted data and provided misinformation or unsupported personal opinions to get artificially high values for conservation-easement donations. The complaint also alleges that “Ehrmann knows that his clients will use the inflated values provided in his appraisals to claim overstated charitable contribution deductions.” According to the government complaint, the amount of improper tax deductions attributable to Ehrmann’s flawed appraisals could reach hundreds of millions of dollars.

In 2011, in the U.S. District Court for the District of Columbia, the Justice Department obtained an injunction against the Trust for Architectural Easements, formerly known as the National Architectural Trust, barring it from engaging in abusive practices relating to the valuation and donation process for historic-conservation easements. The Internal Revenue Service has listed abuse of charitable deductions as one of its “Dirty Dozen” tax scams . The Justice Department has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters in the past decade. Information about these cases is available on the Justice Department website .

Related Materials:

United States v. Michael Ehrmann, et al.
Agreed Order of Permanent Injunction (PDF)

Fairfax, Va.-based skilled nursing facility Fairfax Nursing Center (FNC) and its owners have agreed to pay $700,000 to resolve allegations that they violated the False Claims Act by knowingly submitting or causing the submission to Medicare of false claims for non-reimbursable rehabilitation therapy services, the Justice Department announced today.

 

The settlement resolves claims that FNC provided excessive, medically unnecessary, or otherwise non-reimbursable physical, occupational, and speech therapy services to 37 Medicare beneficiaries serviced by FNC between January 2007 and December 2010. The United States alleged that the rehabilitation therapy services provided by FNC to these beneficiaries were not reasonable and necessary for the treatment of their condition.  Specifically, the United States alleged that the therapy services were often excessive, duplicative, performed without clear goals or direction, and, in some instances, performed primarily to capture higher reimbursement rates.

 

“Today’s settlement is another example of the Department’s efforts to hold skilled nursing facilities accountable for the rehabilitation therapy services they deliver to some of the most vulnerable in our society,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “The provision of excessive and medically unnecessary therapy services will not be tolerated.”

 

“Medicare fraud takes many forms and arises in various segments of health care,” said U.S. Attorney Neil H. MacBride. “We continue to work toward recovery of money lost to overbillings to Medicare.”

 

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 nearly $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 two former FNC therapists and one former contract therapist 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 whistleblowers in this case will receive, collectively, $122,500 of the recovery. The lawsuit is captioned as United States of America & Commonwealth of Virginia ex rel. Christine Ribik, Nadine Kelly, & Stephanie Beauregard v. Fairfax Nursing Center, Inc., et al. No. 1:11-cv-496 (E.D. Va.).

 

The case was handled by the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Virginia, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the Medicaid Fraud Control Unit of the Commonwealth of Virginia Attorney General’s Office. The claims settled by this agreement are allegations only; there has been no determination of liability.

Three people have been charged this week in Newark, Miami and New York City with wildlife smuggling and related charges for their alleged roles in an international rhino horn smuggling ring, the Justice Department announced today.  The arrests and charges are the result of “Operation Crash”, a nationwide effort led by the U.S. Fish & Wildlife Service (FWS) and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.

Federal grand juries in Newark, N.J., and Miami have indicted Zhifei Li, in the international smuggling of rhinoceros horns.  Shusen Wei, a 44 year old Chinese business executive and an associate of Li, has also been charged with offering to bribe a federal agent in the Li case. Qing Wang was charged today in a related criminal complaint in federal court in the Southern District of New York for his role in smuggling libation cups carved from rhinoceros horns from New York to Li via Hong Kong. 

According to the indictment filed in Newark on Feb. 11, 2013, Li, a 28 year-old Chinese national, conspired to smuggle more than 20 raw rhinoceros horns from the United States to Hong Kong in 2011 and 2012.  Li wired hundreds of thousands of dollars over at least a year to a co-conspirator in the United States to fund purchases of rhinoceros horns.  Li’s co-conspirator smuggled the rhino horns in porcelain vases and mailed them to Hong Kong and China to a person other than Li, in an effort to evade detection by U.S. officials.  Li and his co-conspirator bought many of the horns in New Jersey from other members of the conspiracy.  Li was arrested in January on charges previously filed in New Jersey.  
   
Li also was indicted on Feb. 12, 2013, in Miami on wildlife trafficking and smuggling charges.  According to court records and government statements made in court, shortly after arriving in Florida in January 2013 for the Original Miami Beach Antique Show, Li purchased two endangered black rhinoceros horns from an undercover U.S. Fish & Wildlife Service agent in a Miami Beach hotel room for $59,000.  Li asked if the undercover officer could procure additional rhinoceros horns and mail them to his company in Hong Kong. 

 Also arrested on a related criminal complaint filed in Miami was Shusen Wei, a Chinese business executive, who also was attending the antique show and sharing a hotel room with Li.  According to documents filed in court in Miami, Wei was interviewed by agents after Li’s arrest and admitted to knowing about Li’s smuggling activities and to purchasing rhinoceros carvings from Li that apparently had been purchased in and smuggled from the United States.  After being served with a grand jury subpoena to appear in New Jersey, Wei left Miami for New York en route to China.  Prior to leaving Miami, Wei allegedly asked an undercover informant to invite a FWS special agent out to dinner in Miami and offer her money to assist Li.  After a series of recorded phone calls and text messages, Wei was arrested as he attempted to board a flight bound for China at JFK International Airport in New York on Saturday, Feb. 3, 2013, on charges of bribing a federal official.  According to documents filed in court, Wei proposed that the undercover informant offer the agent as much as $10,000. 

Qing Wang is scheduled to appear in court today to face charges in a criminal complaint in the Southern District of New York for his role in smuggling libation cups carved from rhinoceros horns from New York to Li in Hong Kong.  According to documents unsealed today, Wang was one of several that purchased items in the United States for Li.  In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups .  Drinking from such a cup was believed to bring good health and such carvings are highly prized by collectors. Wang is alleged to have been smuggling rhinoceros horn cups as well as ivory carvings to Li in Hong Kong.     

An indictment or criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans.  All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered.  Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population.  As a result, rhino populations have declined by more than 90 percent since 1970.  South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.    

Operation Crash (named for the term used to describe a herd of rhinoceros) is an ongoing multi-agency effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns.  The investigation resulting in the charges announced today has been conducted by the Special Investigations Unit of the FWS Office of Law Enforcement, with assistance from the Department of Homeland Security.  The Li case is being prosecuted by the U.S. Attorney’s Office of the District of New Jersey by Assistant U.S. Attorney Kathleen O’Leary.  The Wei case is being prosecuted by Assistant U.S. Attorney Tom Watts-FitzGerald in the Southern District of Florida. The Wang case is being prosecuted by Assistant U.S. Attorney Janis Echenberg in the U.S. Attorney’s Office of the Southern District of New York.  Senior Trial Attorney Richard A. Udell of the Environmental Crimes Section of the U.S. Department of Justice is assisting in and coordinating all of the prosecutions.  Additional support has been provided by the U.S. Attorney’s Office in the Eastern District of New York.

A retired employee of the Marine Corps Logistics Base Albany (MCLB-Albany) pleaded guilty today to receiving bribes in exchange for allowing heavy equipment to be stolen from the base for resale, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.

Shelby C. Janes, 67, of Albany, Ga., pleaded guilty before U.S. District Judge W. Louis Sands in the Middle District of Georgia to one count of bribery of a public official.

During his guilty plea, Janes, the former civilian inventory control manager of the distribution management center at MCLB-Albany, admitted to participating in a scheme in which he assisted an individual, referred to in court documents as “Person A,” in stealing heavy equipment – such as cranes, bulldozers and front-end loaders – from the base.  Person A, the owner of a commercial trucking business that was routinely contracted by the MCLB’s Defense Logistics Agency, then arranged to sell the equipment to private purchasers. 

According to court documents, while working at the distribution management center, Janes was responsible for supervising a number of employees in the inventorying of obsolete equipment returning from the Fleet Marine Corps.  This equipment was sent to MCLB-Albany for one of two purposes: to be demilitarized and disposed of through eventual sale or destruction, or to be rehabilitated, repaired and redistributed to the Fleet Marine Corps.  To accomplish the theft scheme, Janes and one of his employees, referred to in court documents as “Public Official A,” facilitated the theft of the equipment, including by letting the equipment be driven off the base.  Janes admitted that to facilitate the unlawful removal of the equipment, he typically prepared a false DD Form 1348 authorizing the Defense Logistics Agency to release the equipment to Person A, and that the equipment was then sold to private purchasers for tens of thousands of dollars.

Janes also admitted that he received payments from Person A after the sale of the stolen equipment, often delivered to him by Public Official A on behalf of Person A in the form of a check or cash, totaling approximately $98,500 during the approximately 15-month scheme.  Janes admitted that the total loss to the Department of Defense from the theft of government equipment was approximately $1,075,000.

At sentencing, Janes faces a maximum potential penalty of 15 years in prison and a fine of twice the gain or loss from the offense.  As part of his plea agreement with the United States, Janes agreed to forfeit the bribe proceeds he received from the scheme, as well as to pay full restitution to the Department of Defense.  A sentencing date has not yet been set.

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

A federal grand jury in Muskogee, Okla., has indicted Raymond A. Barnes, 42, and Christopher A. Brown, 31, the former jail superintendent and assistant jail superintendent, respectively, of the Muskogee County Jail (MCJ) on multiple counts of civil rights offenses related to allegations of excessive force on inmates at MCJ on or between August 2009 and May 2011. Brown is also charged with making material false statements to the FBI.

 

The indictment charges both Barnes and Brown with one count of conspiring to violate the rights of inmates housed at MCJ by assaulting inmates themselves or by directing other jailers employed by MCJ to do so. Specifically, the indictment alleges that as part the conspiracy, the defendants did the following: unjustifiably strike, assault, harm and physically punish inmates at MCJ who were restrained, compliant and not posing a physical threat to anyone; organize “meet and greets,” whereby jailers would scare, punish and harm incoming inmates from neighboring counties by throwing and slamming the handcuffed inmates to the ground upon their arrival at the MCJ; threaten to fire MCJ employees if they reported abusive behavior directly to the sheriff or to outside law enforcement authorities; require and encourage MCJ jailers to write incident reports that falsely justified uses of force and contained misleading or inaccurate accounts of what had occurred when force was used; and perpetuate an environment within the MCJ that allowed unlawful beatings and assaults against inmates to continue indefinitely and without consequence.

 

The indictment further charges the defendants with aiding and abetting each other in violating the rights of two different inmates when the MCJ jailers slammed and threw the inmates to the ground while they were handcuffed. The indictment alleges that these offenses resulted in bodily injury.

 

Brown is additionally charged with one count of making material false statements to the FBI. According to the indictment, Brown falsely claimed that during “meet and greets,” when an inmate from an out-of-county jail arrives at MCJ, the inmate is ordered out of the transport vehicle, and then is “gently placed” on the ground. The indictment alleges that this was false in that the defendant knew at the time of his statement to the FBI that during “meet and greets,” when an inmate arrived from an out-out-county jail, the MCJ jailers routinely threw and slammed inmates to the ground even though the inmates were restrained and not posing a physical threat to anyone.

 

Barnes and Brown face a maximum penalty of 10 years for each of the three civil rights offenses. Brown faces a maximum penalty of five years for making material false statements to the FBI.

 

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

 

This case is being investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and is being prosecuted by Fara Gold and Dana Mulhauser of the Civil Rights Division of the U.S. Department of Justice.

A federal grand jury in Muskogee, Okla., has indicted Dennis Frisbie Jr., 32, a former detention officer at the Muskogee County Jail (MCJ), on one count of making material false statements to the FBI.

 

According to the indictment, Frisbie falsely reported to the FBI that he had been shot by an unknown individual on or about July 9, 2011, and that he believed he was shot because he had previously been interviewed and cooperated with the FBI regarding an investigation into matters at the MCJ. The indictment alleges that this statement was false because Frisbie knew at the time of his statement to the FBI that he had not been shot by an unknown individual because of his previous cooperation with the FBI.

 

Frisbie faces a maximum penalty of five years for making material false statements to the FBI.

 

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

 

This case is being investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and is being prosecuted by Fara Gold and Dana Mulhauser of the Civil Rights Division of the U.S. Department of Justice.

Big game hunting outfitter Dennis Eugene Rodebaugh, 72, of Meeker, Colo., was sentenced in Denver today to 41 months in prison to be followed by three years supervised release for six felony counts of violating the Lacey Act, announced the Department of Justice Environment and Natural Resources Division, the U.S. Fish and Wildlife Service and Colorado Parks and Wildlife.  District Judge Christine M. Arguello also sentenced Rodebaugh, to pay a $7,500 fine to the Lacey Act reward fund and $37,390 in restitution to the state of Colorado for the value of illegally taken elk and deer.    

Rodebaugh was found guilty by a jury in September 2012 of aiding and abetting six violations of the Lacey Act by providing outfitting and guiding services from salt-baited tree-stands between 2005 and 2007.  Beginning in 1988, Mr. Rodebaugh began offering multi-day elk and deer hunts to out-of-state clients on the White River National Forest through his outfitting business, called “D&S Guide and Outfitter,” for between $1,200 and $1,600.  

Rodebaugh's assistant guide, Brian Kunz, was also sentenced today.  He previously pleaded guilty to two misdemeanor counts of violating the Lacey Act while working for Rodebaugh.  Based on his acceptance of responsibility and the government’s motion for downward departure based on his cooperation, the court sentenced Mr. Kunz to time served (one day) and one year of probation plus a $2,000 fine

Each spring and summer, Mr. Rodebaugh placed hundreds of pounds of salt as bait near the tree-stands from which his clients would hunt deer and elk with archery equipment. The placement and use of salt to aid in the taking of big game is unlawful in Colorado.  The interstate sale of big game outfitting and guiding services for the unlawful taking of big game with the aid of bait constitutes a violation of the Lacey Act.
 
This case was investigated by Colorado Parks and Wildlife and the U.S. Fish and Wildlife Service. 

The case was prosecuted by Senior Trial Attorney J. Ronald Sutcliffe and Trial Attorney Mark Romley, of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.

Attorney General Eric Holder issued the following statement today on the Senate passage of the Violence Against Women Act:

 

“I am extremely pleased the Senate has passed the reauthorization of the Violence Against Women Act, which contains important new provisions to expand access to justice for all victims of violence and strengthen law enforcement and prosecutorial tools to hold accountable those who commit these crimes. Notably, the tribal provisions included in the VAWA reauthorization and originally proposed by the Department of Justice, will close a significant jurisdictional gap that has left too many Native American women, precisely because they are Native American, exposed to violence for far too long. The status quo is simply unacceptable and the Senate has today acted courageously on behalf of our society’s most vulnerable, who deserve not only equal justice but also our unquestionable resolve to protect them. As the House of Representatives now moves to consider reauthorizing this critical law, I urge lawmakers to come together, as they have historically, to pass an improved and strengthened VAWA that continues its 18 years of progress towards ending the scourge of violence against all victims in our society.”

One of the leaders of an organization that laundered more than $20 million through “shell” business bank accounts pleaded guilty today in federal court in Houston, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

Enrique Morales, 42, of Houston and Guadalajara, Mexico, pleaded guilty today before U.S. District Judge Lee H. Rosenthal in the Southern District of Texas to conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business.
  
In August 2012, a federal grand jury in Houston indicted Morales and four of his co-defendants for their roles in operating a money transmitting business that provided professional money laundering services to narcotics traffickers as part of a scheme commonly referred to as “the Black Market Peso Exchange.”  According to the indictment, from October 2009 to September 2011, the defendants placed U.S. currency obtained through the sale of drugs in the U.S. into bank accounts held in the name of shell companies, which were owned and operated by the defendants.  The money was then transferred to different accounts in the U.S. and Mexico.  In exchange, pesos were transferred to bank accounts owned by the defendants’ clients.   
 
A total of five people arrested as part of this scheme have now been convicted.  Willie Whitehurst, Fulton Smith and Anthony Foster, all from Houston and money couriers for the organization, previously pleaded guilty to conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business.  Smith, 40, pleaded guilty yesterday, while Whitehurst, 44, and Foster, 47, pleaded guilty in January 2013.  An office manager for the organization, Sarah Combs, 48, of Dickinson, Texas, previously pleaded guilty to conspiracy to operate an unlicensed money transmitting business.

Foster, Whitehurst and Combs are scheduled for sentencing on May 9, 2013, while the sentencings of Smith and Morales are set for May 29, 2013.  For the money laundering conspiracy, Morales, Whitehurst, Foster and Smith face up to 20 years in federal prison and a $500,000 fine, or twice the value of the property involved in the offense, whichever is greater.  All five defendants face up to five years in federal prison and a fine of $250,000 for conspiracy to operate an unlicensed money transmitting business.
 
The case was investigated by the special agents with the Drug Enforcement Administration and Internal Revenue Service – Criminal Investigation.  The case is being prosecuted by Assistant U.S. Attorney Ted Imperato of the Southern District of Texas and Keith Liddle, trial attorney in the Money Laundering and Bank Integrity Unit of the Criminal Division’s Asset Forfeiture and Money Laundering Section.

The Money Laundering and Bank Integrity Unit investigates and prosecutes complex, multi-district and international criminal cases involving financial institutions and individuals who violate the money laundering statutes, the Bank Secrecy Act and other related statutes.  The unit’s prosecutions generally focus on three types of violators: financial institutions, including their officers, managers and employees, whose actions threaten the integrity of the individual institution or the wider financial system; professional money launderers and gatekeepers who provide their services to serious criminal organizations; and individuals and entities engaged in using the latest and most sophisticated money laundering techniques and tools.

The Justice Department announced today that, as part of its Barrier-Free Health Care Initiative , it has reached a settlement with Woodlawn Family Dentistry, of Alexandria, Va., under the Americans with Disabilities Act (ADA). This is the third settlement addressing HIV discrimination by a medical provider reached by the Justice Department in three weeks.

 

The Justice Department found that Woodlawn Family Dentistry required a patient with HIV to schedule all future appointments as the last appointment of the day. The department determined that, because the patient has HIV, Woodlawn failed to offer him the same options and availability in scheduling future appointments as it offered to other people. The department further determined that there was no lawful reason why Woodlawn could not treat the patient at any time during normal business hours.

 

“Ensuring that people with HIV are treated equally and with dignity is critical, especially in the medical field,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The ADA does not tolerate this type of discrimination and neither will the Justice Department.”

 

Under the settlement, Woodlawn must pay $7,000 to the patient and $3,000 in civil penalties. In addition, Woodlawn must train its staff on the ADA and develop and implement an anti-discrimination policy.

 

In the past two weeks, the department announced similar agreements with the Fayetteville Pain Center and the Castlewood Treatment Center to address HIV discrimination. All three 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 .

A former employee of a Department of Defense contracting company at Bagram Airfield, Afghanistan, was sentenced today to serve 30 months in prison for attempting to smuggle $150,000 in kickback proceeds he received for steering U.S. government subcontracts to an Afghan company, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Barry Grissom of the District of Kansas.

 Donald Gene Garst, 51, of Topeka, Kan., was sentenced by U.S. District Judge Julie A. Robinson in Topeka.  In addition to his prison term, Garst was sentenced to serve one year of supervised release and was ordered to pay a fine of $52,117.  The department previously forfeited the $150,000 Garst had attempted to smuggle into the United States.   

Garst pleaded guilty on Nov. 9, 2012, to a one-count information charging him with bulk cash smuggling.  According to court documents, Garst was employed by a private U.S. company that was contracted by the U.S. government and its armed forces at Bagram Airfield from January 2009 to May 2011.  Garst was involved in identifying, evaluating and monitoring subcontracts awarded to Afghan companies by his employer, and he used his position to meet executives of an Afghan construction company called Somo Logistics.  Garst then entered into an agreement with the Afghans under which he would receive kickback payments on a contract-by-contract basis in return for treating Somo Logisitcs favorably in the contracting process. 

In December 2010, Garst accepted a kickback for $60,000 on the first subcontract awarded to Somo Logistics.  The subcontract was for the term lease of heavy equipment meant to be used for construction on Bagram Airfield.  Garst hand-carried approximately $20,000 of the kickback proceeds into the United States, and he received the remainder via a series of structured wire transfers from Somo Logistics executives. 

In May 2011, Garst accepted a $150,000 kickback for a second subcontract for the lease of heavy construction equipment.  Garst shipped the $150,000 in cash to the United States, and his failure to declare the value of the shipment was discovered by law enforcement. 

Garst had further agreed to receive $400,000 on a third subcontract, but his scheme was discovered by law enforcement before he could receive that payment.          

 This case is being prosecuted by Assistant U.S. Attorney Jared Maag and Trial Attorney Wade Weems of the Criminal Division’s Fraud Section.  The case was investigated by Special Agents with the Army Criminal Investigations Division and the Defense Criminal Investigative Service, with assistance from the Special Inspector General for Afghanistan Reconstruction and the FBI.

A Florida resident pleaded guilty today to causing a presidential campaign committee to make a false statement to the Federal Election Commission (FEC), announced Assistant Attorney General Lanny A. Breuer of the Justice Department?s Criminal Division and Robert O. Davis, Acting U.S. Attorney for the Northern District of Florida. Jay Odom, 56, of Destin, Fla., pleaded guilty before Senior U.S. District Judge Lacey A. Collier in the Northern District of Florida to one count of causing another to make false statements to the FEC. According to court documents, in approximately December 2007, Odom directly and indirectly solicited employees of his business entities and their family members to each make the maximum allowable contributions to the authorized campaign committee of a presidential candidate. The employees were encouraged to make these donations with the understanding that Odom would advance funds to or reimburse these individuals for their contributions. Odom admitted to both knowing that this activity was illegal and intending to conceal the true source and amount of the campaign contributions. In 2007, Odom directly or indirectly used personal funds to reimburse individual contributions to the authorized campaign committee of the presidential candidate for a total of $23,000. As a result of this scheme, Odom intentionally caused the presidential candidate?s authorized campaign committee to file a report with the FEC that falsely stated that 10 individual donors had made federal campaign contributions when in fact each contribution was made by Odom. At sentencing, scheduled for April 23, 2013, Odom faces a maximum potential penalty of five years in prison. This case was investigated by the FBI. This case is being prosecuted by Assistant U.S. Attorney Randall J. Hensel and Trial Attorney Brian K. Kidd of the Criminal Division?s Public Integrity Section.

Today the United States filed a civil action against ATP Oil & Gas Corporation and ATP Infrastructure Partners, LP (ATP-IP) for civil penalties and injunctive relief under the Clean Water Act and the Outer Continental Shelf Lands Act.  The complaint was filed on behalf of the U.S. Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) and the U.S. Environmental Protection Agency (EPA).  The complaint addresses the defendants’ alleged unlawful discharges of oil and unpermitted chemical dispersants from the defendants’ floating oil and gas production platform, the ATP Innovator, into the Gulf of Mexico. 

The ATP Innovator is a production facility operating at Lease Block 711 of Mississippi Canyon in the Gulf of Mexico, approximately 45 nautical miles offshore of southeastern Louisiana. 

The violations were discovered during a BSEE inspection of the facility in March 2012.  Following further investigation by BSEE, the violations were referred to the Department of Justice by BSEE and EPA.  The case, United States v. ATP Oil & Gas Corporation et al., was filed in the District Court for the Eastern District of Louisiana. 

As alleged in the complaint, ATP failed to properly operate and maintain its wastewater treatment system on the ATP Innovator.  As a result, excess oil was discharged into the ocean, and an unauthorized chemical dispersant was added to the oily wastewater discharge to mask the presence of oil on the ocean’s surface.  The dispersant was added to the outfall pipe by way of a concealed metal tube that connected a tank of dispersant to the outfall pipe.  The connection of the metal tubing to the outfall pipe was located downstream of the sample collection point, making the addition of unauthorized dispersant undetectable in samples that are required to be collected to show compliance with ATP’s Clean Water Act discharge permit.

According to the complaint, the dispersant had been used from at least October 2010 to March 2012.  In addition to civil penalties under the Clean Water Act, the complaint also seeks injunctive relief for violations of the Clean Water Act and the Outer Continental Shelf Lands Act.

Related Materials:

ATP Complaint

NEW YORK -- Immigration Judge Joanna Bukszpan from the Executive Office for Immigration Review, New York Immigration Court, delivered the keynote speech and administered the oath of allegiance to approximately 150 candidates during a naturalization ceremony at 26 Federal Plaza in New York on Feb. 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 Bukszpan in September 1995. Judge Bukszpan received a bachelor of arts degree in 1963 from the City University of New York and a juris doctorate in 1976 from Brooklyn Law School. From 1978 to 1995, she was in private practice in New York. From 1976 to 1978, she worked as a trial attorney/general attorney (nationality) for the former Immigration and Naturalization Service in New York. Judge Bukszpan is a member of the District of Columbia and New York State Bars.

- EOIR -

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

Executive Office for Immigration Review

The Justice Department today moved to intervene in Murphy-Taylor v. State of Maryland, et al., a private lawsuit alleging sex discrimination by the state of Maryland, Queen Anne’s County and the Queen Anne’s County Sheriff. The United States’ complaint in intervention alleges that Kristy Murphy-Taylor’s supervisors in the sheriff’s office subjected her to severe sexual harassment and retaliated against her when she complained. The complaint alleges that these actions violate Title VII of the Civil Rights Act of 1964.

According to the complaint, over a number of years Ms. Murphy-Taylor was subjected to numerous acts of unwanted sexual conduct by multiple supervisors including, multiple incidents of unwanted sexual touching, sexually explicit comments about Ms. Murphy-Taylor and other female officers, and derogatory comments about Ms. Murphy-Taylor based on her sex and about women in general.

Despite Ms. Murphy-Taylor’s complaints to supervisory officials about the unwelcome conduct, the complaint alleges that the defendants failed to take prompt and effective corrective action, subjected her to intolerable working conditions intended to make her quit, and ultimately terminated her for complaining about the sexual harassment.

The United States determined that this case represents a matter of general public importance and that the Department of Justice should participate in it. By intervening, the United States will ensure that the law continues to protect employees and that the price of earning a living will not be enduring constant sexual harassment. The relief sought by the United States is past and future lost wages and compensatory damages for Ms. Murphy-Taylor as well as the implementation of effective sexual harassment policies and procedures and training on these policies and procedures.

Ms. Murphy-Taylor filed a charge of sex discrimination and retaliation with the Baltimore District Office of the Equal Employment Opportunity Commission (EEOC). After investigating these charges, finding reasonable cause to believe that the charging party was subject to discrimination because of her sex, and unsuccessfully attempting to conciliate the matter, the EEOC referred the charges to the Department of Justice. This lawsuit is brought by the Department of Justice as a result of a project designed to ensure vigorous enforcement of Title VII against state and local governmental employers by enhancing cooperation between the EEOC and the Civil Rights Division.

“The Department of Justice will not stand by while women are forced to endure unwanted sexual conduct in their workplaces and then penalized for protesting it,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division. “Through our partnership with the EEOC, the department continues its commitment to vigorously enforcing the right of employees to be free from sex discrimination in the work place.”

“The work of the commission is made more effective and efficient with interagency coordination,” said Jacqueline A. Berrien, chair of the Equal Employment Opportunity Commission. “Our ongoing project with the Justice Department helps to ensure that employees receive the full protection of the laws prohibiting workplace discrimination.”

“By working more closely together in appropriate cases, EEOC and DOJ are able to use our resources more efficiently to ensure the vigorous enforcement of Title VII in the public sector,” said EEOC District Director Spencer H. Lewis Jr., of the EEOC’s Philadelphia District Office. The Philadelphia District Office of the EEOC oversees Pennsylvania, Maryland, Delaware, West Virginia and parts of New Jersey and Ohio.

Title VII prohibits discrimination in employment on the basis of sex, race, color, national origin or religion, and prohibits retaliation against an employee who opposes an unlawful employment practice, or because the employee has made a charge or participated in an investigation, proceeding or hearing under the Act. More information about Title VII and other federal employment laws is available at www.usdoj.gov/crt/emp/index.html .

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its website at www.eeoc.gov.

A former registered nurse was sentenced today to serve 111 months in prison for his role in a health care fraud scheme involving defunct health provider Health Care Solutions Network Inc. (HCSN), announced Assistant Attorney General Lanny A. Breuer 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.

John Thoen, 53, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida.  In addition to his prison term, Thoen was sentenced to serve three years of supervised release.

On Nov. 20, 2012, Thoen pleaded guilty in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.

 According to court documents, HCSN operated community mental health centers (CMHC) at three locations in Miami-Dade County, Fla., and one location in Hendersonville, N.C.  HCSN purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness.  A PHP is a form of intensive treatment for severe mental illness.  According to court documents, HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not even provided.  HCSN obtained those beneficiaries in Miami by paying kickbacks to owners and operators of assisted living facilities.

According to court documents, Thoen was a licensed registered nurse in both Florida and North Carolina.  In Florida, Thoen participated in the admission to HCSN of patients who were ineligible for PHP services.  Thoen participated in the routine fabrication of patient medical records that were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Medicaid.

In North Carolina, Thoen, according to court documents, routinely submitted fraudulent PHP claims for Medicare patients who were not even present at the CMHC on days PHP services were purportedly rendered.  Thoen also caused the submission of fraudulent Medicare claims on days the CMHC was closed due to snow.

Thoen also admitted to his role in a money laundering scheme, involving Psychiatric Consulting Network Inc. (PCN), a Florida corporation that was utilized by HCSN as a shell corporation to launder health care fraud proceeds.  According to court documents, Thoen was president of PCN.

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 nine defendants have pleaded guilty.  Alleged co-conspirators Wondera Eason and Paul Layman are scheduled for trial on March 11, 2013, before Judge Altonaga in Miami.  And alleged co-conspirators Alina Feas, Dana Gonzalez, Gema Pampin 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 Attorney Allan J. Medina of the Criminal Division’s Fraud Section. This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  In support of the Medicare Fraud Strike Force, the FBI Criminal Investigative Division’s Financial Crimes Section has funded the Special Trial Attorney position.

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. 

Steven J. Wasserman, M.D., a dermatologist practicing in Venice, Fla., has agreed to pay $26.1 million to resolve allegations that he violated the False Claims Act by accepting illegal kickbacks from a pathology laboratory and by billing the Medicare program for medically unnecessary services, the Justice Department announced today. The settlement is the largest ever with an individual under the False Claims Act in the Middle District of Florida and one of the largest with an individual under the False Claims Act in U.S. history.

The government alleged that, in or around 1997, Dr. Wasserman entered into an illegal kickback arrangement with Tampa Pathology Laboratory (TPL), a clinical laboratory in Tampa, Fla., and Dr. José SuarezHoyos, a pathologist and the owner of TPL, in an effort to increase the lab’s referral business. Under that agreement, Dr. Wasserman allegedly sent biopsy specimens for Medicare beneficiaries to TPL for testing and diagnosis. In return, TPL allegedly provided Dr. Wasserman a diagnosis on a pathology report that included a signature line for Dr. Wasserman to make it appear to Medicare that he had performed the diagnostic work that TPL had performed. The government alleged that Dr. Wasserman then billed the Medicare program for TPL’s work, passing it off as his own, for which he received more than $6 million in Medicare payments. In addition, the government asserted that, in furtherance of his agreement with TPL, Dr. Wasserman substantially increased the number of skin biopsies he performed on Medicare patients, thus increasing the referral business for TPL.

 

The government further alleged that, in addition to his involvement in the alleged kickback scheme, Dr. Wasserman also performed thousands of unnecessary skin surgeries known as adjacent tissue transfers on Medicare beneficiaries. Adjacent tissue transfers are complicated and often time-consuming procedures physicians sometimes use to close a defect resulting from the removal of a growth on a patient’s skin. The government

alleged that Dr. Wasserman performed many of these procedures in order to obtain the reimbursement for them, and not because they were medically necessary.

 

“Doctors who take illegal kickbacks and perform unnecessary procedures not only put their own financial self-interest over their duty to their patients, they raise the cost of health care for all of us as patients and as taxpayers,” 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 the public health care programs to which we all contribute and on which we all depend.”

 

“This settlement represents a watershed achievement in our district’s civil healthcare fraud enforcement program,” said Robert O’Neill, U.S. Attorney for the Middle District of Florida. “Schemes of this magnitude require extraordinary remedies, and we are proud to have reached such an outstanding resolution for the taxpayers and their health programs.”

 

The allegations resolved by today’s settlement were initiated by a lawsuit originally filed in the District Court for the Middle District of Florida by Alan Freedman, M.D., a pathologist who formerly worked at TPL. Dr. Freedman filed the lawsuit under the qui tam, or whistleblower provisions of the False Claims Act. Under the False Claims Act, a private party may file suit on behalf of the United States for false claims and share in any recovery. The United States has the right to intervene in the action, which it did in this case, filing its own complaint in October 2010. Dr. Freedman will receive $4,046,000 of today’s settlement.

 

The United States previously settled with TPL and Dr. SuarezHoyos for $950,000 to resolve the allegations asserted against them in the same lawsuit.

 

“Anyone cheating patients and taxpayers should expect to pay a high price,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.  “Besides paying more than $26 million, Dr. Wasserman is excluded from treating patients and being paid under Medicare, Medicaid and all other federal health care programs.”    

 

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 billion.

 

Principal Deputy Assistant Attorney General Delery and U.S. Attorney O’Neill thanked the joint investigation team, which includes special agents with the Department of Health and Human Services-OIG and the FBI, for their efforts in the investigation of this matter.

 

The claims settled by this agreement are allegations only; there has been no determination of liability.

 

The lawsuit is captioned U.S. ex rel. Freedman v. SuarezHoyos et al., No. 04-933 (M.D. Fla.).

Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius today released a new report showing that for every dollar spent on health care-related fraud and abuse investigations in the last three years, the government recovered $7.90.  This is the highest three-year average return on investment in the 16-year history of the Health Care Fraud and Abuse (HCFAC) Program.

The government’s health care fraud prevention and enforcement efforts recovered a record $4.2 billion in taxpayer dollars in Fiscal Year (FY) 2012, up from nearly $4.1 billion in FY 2011, from individuals and companies who attempted to defraud federal health programs serving seniors and taxpayers or who sought payments to which they were not entitled.  Over the last four years, the administration’s enforcement efforts have recovered $14.9 billion, up from $6.7 billion over the prior four-year period.  Since 1997, the HCFAC Program has returned more than $23 billion to the Medicare Trust Funds.

These findings, released today in the annual HCFAC Program report, are a result of President Obama making the elimination of fraud, waste and abuse, particularly in health care, a top priority for the administration.

The success of this joint Department of Justice and HHS effort was made possible by the Health Care Fraud Prevention and Enforcement Action Team (HEAT), created in 2009 to prevent fraud, waste and abuse in the Medicare and Medicaid programs and to crack down on individuals and entities that are abusing the system and costing American taxpayers billions of dollars.  These efforts to reduce fraud will continue to improve with new tools and resources provided by the Affordable Care Act.

“This was a record-breaking year for the Departments of Justice and Health and Human Services in our collaborative effort to crack down on health care fraud and protect valuable taxpayer dollars,” said Attorney General Holder.  “In the past fiscal year, our relentless pursuit of health care fraud resulted in the disruption of an array of sophisticated fraud schemes and the recovery of more taxpayer dollars than ever before.  This report demonstrates our serious commitment to prosecuting health care fraud and safeguarding our world-class health care programs from abuse.”

“Our historic effort to take on the criminals who steal from Medicare and Medicaid is paying off: We are gaining the upper hand in our fight against health care fraud,” said Secretary Sebelius. “This fight against fraud strengthens the integrity of our health care programs and helps us fulfill our commitment to our seniors.”

About $4.2 billion stolen or otherwise improperly obtained from federal health care programs was recovered and returned to the Medicare Trust Funds, the Treasury and others in FY 2012.  This is an unprecedented achievement for the HCFAC Program, a joint Justice Department and HHS effort to coordinate federal, state and local law enforcement activities to fight health care fraud and abuse.

The administration is also using tools authorized by the Affordable Care Act to fight fraud, including enhanced screenings and enrollment requirements, increased data sharing across the government, expanded recovery efforts for overpayments and greater oversight of private insurance abuses.  

Since 2009, the Justice Department and HHS have improved their coordination through HEAT and increased the number of Medicare Fraud Strike Force teams to nine.  The Justice Department’s enforcement of the civil False Claims Act and the Federal Food, Drug and Cosmetic Act have produced similar record-breaking results.  These combined efforts coordinated under HEAT have expanded local partnerships and helped educate Medicare beneficiaries about how to protect themselves against fraud.   In FY 2012, the two departments continued their series of regional fraud prevention summits, and the Justice Department hosted a training conference for federal prosecutors, FBI agents, HHS Office of Inspector General agents and others.

The strike force teams use advanced data analysis techniques to identify high-billing levels in health care fraud hot spots so that interagency teams can target emerging or migrating schemes as well as with chronic fraud by criminals masquerading as health care providers or suppliers. In July, Attorney General Holder and Secretary Sebelius announced the launch of a ground-breaking partnership among the federal government, state officials, leading private health insurance organizations and other health care anti-fraud groups to share information and best practices to improve detection of and prevent payments to scams that cut across public and private payers.

In FY 2012, the Justice Department opened 1,131 new criminal health care fraud investigations involving 2,148 potential defendants, and a total of 826 defendants were convicted of health care fraud-related crimes during the year.  The department also opened 885 new civil investigations.

The strike force coordinated a takedown in May 2012 that involved the highest number of false Medicare billings in the history of the strike force program.  The takedown involved 107 individuals, including doctors and nurses, in seven cities, who were charged for their alleged participation in Medicare fraud schemes, involving about $452 million in false billings.  As a part of the May 2012 takedown, HHS also suspended or took other administrative action against 52 providers using authority under the health care law to suspend payments until an investigation is complete.

Strike force operations in the nine cities where teams are based resulted in 117 indictments, informations and complaints involving charges against 278 defendants who allegedly billed Medicare more than $1.5 billion in fraudulent schemes.  In FY 2012, 251 guilty pleas and 13 jury trials were litigated, with guilty verdicts against 29 defendants, in strike force cases.  The average prison sentence in these cases was more than 48 months.

The new authorities under the Affordable Care Act granted to HHS and the Centers for Medicare & Medicaid Services (CMS) were instrumental in clamping down on fraudulent activity in health care.  In FY 2012, CMS began the process of screening all 1.5 million Medicare-enrolled providers through the new Automated Provider Screening system that quickly identifies ineligible and potentially fraudulent providers and suppliers prior to enrollment or revalidation to verify the data.  As a result, nearly 150,000 ineligible providers have already been eliminated from Medicare’s billing system.

CMS also established the Command Center to improve health care-related fraud detection and investigation, drive innovation and help reduce fraud and improper payments in Medicare and Medicaid. 

From May 2011 through the end of 2012, more than 400,000 providers were subject to the new screening requirements and nearly 150,000 lost the ability to bill the Medicare program due to the Affordable Care Act requirements and other proactive initiatives.

The Department of Justice and HHS also continued their successes in civil health care fraud enforcement during FY 2012.  The Justice Department’s Civil Division Fraud Section, with their colleagues in U.S. Attorneys’ offices throughout the country, obtained settlements and judgments of more than $3 billion in FY 2012 under the False Claims Act (FCA).  These matters included unlawful pricing by pharmaceutical manufacturers, illegal marketing of medical devices and pharmaceutical products for uses not approved by the Food and Drug Administration, Medicare fraud by hospitals and other institutional providers, and violations of laws against self-referrals and kickbacks.  This marked the third year in a row that more than $2 billion has been recovered in FCA health care matters.  Additionally, the Civil Division’s Consumer Protection Branch, working with U.S. Attorneys’ offices, obtained nearly $1.5 billion in fines and forfeitures, and obtained 14 convictions in matters pursued under the Federal Food, Drug and Cosmetic Act.  

For more information on the joint DOJ-HHS Strike Force activities, visit: www.StopMedicareFraud.gov.

For more information on the fraud prevention accomplishments under the Affordable Care Act visit: http://www.healthcare.gov/news/factsheets/2012/02/medicare-fraud02142012a.html.

Related Material:

• FY 2012 HCFAC Report

BALTIMORE --Immigration Judge Lisa Dornell 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 Feb. 8, 2012. The Baltimore District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.

Biographical Information

Attorney General Janet Reno appointed Judge Dornell in April 1995. Judge Dornell received a bachelor of arts degree in 1983 from the University of Vermont and a juris doctorate in 1986 from the University of Texas at Austin School of Law. From 1990 to 1995, Judge Dornell served as senior litigation counsel, Office of Immigration Litigation, Civil Division, Department of Justice. From 1986 to 1990, she served as a trial attorney for the former Immigration and Naturalization Service (INS), New York district office, and as an assistant general counsel, INS Headquarters, Washington, D.C. Judge Dornell lectures on immigration topics and court procedure at several local law schools. She is a member of the District of Columbia and State of Texas 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.

Executive Office for Immigration Review

A federal grand jury has indicted two members of the Compton 155 street gang on federal hate crime charges related to a racially motivated attack on four African-American juveniles at a residence in the city of Compton, Calif., on New Year’s Eve.

Jeffrey Aguilar, aka “Terco,” 19, and Efren Marquez Jr., who is also known as “Stretch” and “Junior,” 21, were named in a five-count indictment returned late yesterday by the grand jury.

The indictment specifically charges Aguilar and Marquez with one count of conspiracy to interfere with housing rights and four counts of interfering with housing rights. The indictment alleges that they attempted to intimidate African-Americans from living in Compton.

Aguilar and Marquez allegedly are members of the Compton 155 street gang, which uses violence and threats of violence in an effort to drive African-Americans out of their “territory” on the west side of Compton. According to the indictment, members of the Compton 155 gang often refer to themselves as “NK” or “N***** Killers.” To instill fear in African-Americans, members of the gang tag their gang moniker and “NK” throughout their “territory.”

“Hate-fueled crimes have no place in our society,” said U.S. Attorney for the Central District of California Andre Birotte Jr. “No one should have to look over their shoulder in fear because of who they are. Incidents like the one described in the federal indictment prove that we must remain vigilant to ensure that the rights of every single American resident are protected at all times.”

“The Civil Rights Division will continue to protect the right of every person who lives in this country to do so free of racially-based violence and intimidation," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division of the Department of Justice.  “The Justice Department will not tolerate those individuals or gangs who would prevent a family from living in a particular neighborhood simply because of their race or the color of their skin.” 

The indictment specifically alleges that on Dec. 31, 2012, Aguilar, Marquez and a co-conspirator confronted an African-American juvenile, who was walking on a street in Compton, and threatened him by referring to themselves as “NKs.” The 17-year-old victim ran to his girlfriend’s house, where three other African-American juveniles were located. Aguilar and Marquez followed the 17-year-old victim to the home, yelled racial slurs at the four juveniles at the residence, and demanded that the African-Americans get out of the neighborhood. Aguilar and Marquez then allegedly assaulted the 17-year-old victim with a metal pipe and threatened another juvenile with a gun.

After the juveniles managed to escape and run into the house, the indictment alleges that Aguilar and Marquez left the scene and informed other gang members that the African-American juveniles lived in their “territory.” Shortly thereafter, Aguilar and approximately 15 other gang members went to the victims’ home and threatened them by yelling racial slurs and warning the juveniles that they did not belong in the neighborhood. During this time, a member of the gang smashed one of the windows of the house.

“The FBI is committed to the protection of civil liberties,” said Bill Lewis, Assistant Director in Charge of the FBI's Los Angeles Field Office. “No one should tolerate violence based on the color of their skin or live in fear based on the hatred of others.”

“Hate crimes seriously threaten our society’s democratic principles and affect the entire community,” said Los Angeles County Sheriff Lee Baca. “We had one hate crime in Compton for 2012, but one is too many. Tolerance is the key element of democracy.”

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

Aguilar and Marquez had been in state custody on unrelated charges. They were transferred to federal custody early this morning and are expected to be arraigned on the indictment this afternoon in U.S. District Court in Los Angeles.

If convicted, Aguilar and Marquez each would face a statutory maximum penalty of 10 years in prison for each of the five civil rights charges alleged in the indictment.

The case against Aguilar and Marquez is the result of an ongoing investigation being conducted by the Federal Bureau of Investigation and the Los Angeles County Sheriff’s Department.

The case is being prosecuted by Assistant U.S. Attorney Reema El-Amamy of the Violent and Organized Crime Section of the U.S. Attorney’s Office and Trial Attorney Saeed Mody of the Civil Rights Division of the Department of Justice.

Michael Farnell and James Farnell, residents of Boca Raton, Fla., were sentenced to prison terms today for income tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. Michael Farnell and James Farnell were previously indicted on April 19, 2012. Judge William P. Dimitrouleas sentenced Michael Farnell to a term of 18 months in prison and his brother James, Farnell, was sentenced to a term of 42 months. Michael Farnell was remanded into custody.  James Farnell was already in custody.

 

According to statements made in court and publicly filed documents, Michael Farnell and James Farnell sold stock in a privately held Florida-based technology company between 2004 and 2006 and failed to report the capital gains or pay taxes on the capital gains from those stock sales. In 2004, the U.S. Securities and Exchange Commission (SEC) filed suit against the Farnell brothers for securities violations at another company that they operated the year 2000. A majority of the stock sales at issue in this case violated the injunction from the SEC’s lawsuit. 

 

According to public documents and statements made in court, the Farnell brothers held their stock in this Florida-based technology company in the name of nominee trusts. The proceeds of the stock sales were deposited into bank accounts titled in the name of these nominee trusts. Neither brother filed tax returns in 2004 and 2005. James Farnell also failed to file a 2006 tax return. As part of the sentencing, Michael Farnell and James Farnell both agreed that they failed to report additional income paid to them by this Florida-based technology in 2001 through 2003.  

 

Michael Farnell was ordered to pay restitution of $448,128 and James Farnell was ordered to pay restitution of $434,115, both to the IRS. 

 

Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, thanked IRS – Criminal Investigation for investigating the case, and also thanked the U.S. Securities and Exchange Commission and the U.S. Attorney’s Office for their assistance with the investigation. The case is being prosecuted by Tax Division Trial Attorney Jed Silversmith and Assistant U.S. Attorney Bertha Mitrani.

Sixteen people were sentenced to prison today for hate crimes arising out of a series of religiously-motivated assaults on practitioners of the Amish religion, announced Thomas E. Perez, the Assistant Attorney General for the Civil Rights Division; Steven M. Dettelbach, the U.S. Attorney for the Northern District of Ohio; and Stephen Anthony, Special Agent in Charge of the FBI – Cleveland Field Office.

The defendants all reside in Bergholz, Ohio, unless otherwise noted. Samuel Mullet, 67, received a 15 year sentence. Johnny S. Mullet, 39; Lester Mullet, 28, of Hammondsville, Ohio; Levi F. Miller, 54; and Eli M. Miller, 33, received seven year sentences. Daniel S. Mullet, 38; Lester Miller, 38; and Emanuel Schrock, 44, received five year sentences. Raymond Miller, 28, of Irondale, Ohio; and Linda Shrock, 45, both received two year sentences. Freeman Burkholder, 32, of Irondale; Anna Miller, 33; Elizabeth A. Miller, 38, of Irondale; Emma J. Miller, 38; Kathryn Miller, 23, of Irondale; and Lovina Miller, 33, all received a sentence of one year and one day.

A jury found the defendants guilty last September following a lengthy trial. The convictions stem from five separate assaults that occurred in four Ohio counties between September and November 2011. In each assault, defendants forcibly removed beard and head hair from practitioners of the Amish faith with whom they had ongoing religious disputes.

The manner in which Amish men wear their beards and Amish women wear their hair are symbols of their faith, according to trial testimony.

Samuel Mullet Sr., Johnny S. Mullet, Daniel S. Mullet, Lester S. Mullet, Levi F. Miller, Eli M. Miller, Emanuel Shrock, Lester Miller, Raymond Miller, Freeman Burkholder, Anna Miller and Linda Shrock were convicted of conspiracy to violate Title 18, U.S. Code, Section 249, also known as the Matthew Shepard-James Byrd Hate Crimes Prevention Act, which prohibits any person from willfully causing bodily injury to any person, or attempting to do so by use of a dangerous weapon, because of the actual or perceived religion of that person, and Title 18, United States Code, Section 1512, which prohibits obstruction of justice, including witness tampering and the destruction or concealment of evidence.

The jury also convicted various groups of defendants with separate assaults, and Samuel Mullet Sr. and Lester Mullet with concealing or attempting to conceal various items of tangible evidence, including a camera and photographs of the attacks.

Samuel Mullet Sr. is the Bishop of the Amish community in Bergholz, while the remaining defendants are all members of that community. Mullet Sr. exerted control over the Bergholz community by taking the wives of other men into his home, and by overseeing various means of disciplining community members, including corporal punishment, according to trial testimony.

As a result of religious disputes with other members of the Ohio Amish community, the defendants planned and carried out a series of assaults on their perceived religious enemies. The assaults involved the use of hired drivers, either by the defendants or the alleged victims, because practitioners of the Amish religion do not operate motor vehicles. The assaults all entailed using scissors and battery-powered clippers to forcibly cut or shave the beard hair of the male victims and the head hair of the female victims, according to trial testimony.

During each assault, the defendants restrained and held down the victims. During some of the assaults, the defendants injured individuals who attempted to intervene to protect or rescue the victims. Following the attacks, some of the defendants participated in discussions about concealing photographs and other evidence of the assaults, according to evidence presented at trial.

“From the time of its founding as a nation, the United States of America has always been a beacon for those who seek religious freedom,” said Assistant Attorney General Perez. “The Department of Justice and the Civil Rights Division will vigorously defend every American’s right to worship in the manner of their choosing, including the members of the defendants’ community. However, violent assaults are not a form of religious expression. The actions of the defendants were designed to terrorize the victims, desecrate sacred symbols of their faith, and interfere with their right to worship. These prosecutions reflect the fact that the Department of Justice will not tolerate religiously motivated violence.”

“From day one, this case has been about the rule of law and defending the right of people to worship in peace. This was never about ‘haircuts.’ These were violent, religiously motivated home invasions that left the victims bloody, bruised and beaten,” said U.S. Attorney Dettlebach. “Our nation was founded on the bedrock principle that everyone is free to worship how they see fit. Violent attempts to attack this most basic freedom have no place in our country.”

“This case is an excellent example of cooperation between the many law enforcement agencies that investigated these crimes, along with the prosecution team from the United States Attorney’s Office and the Department of Justice,” said FBI Special Agent in Charge Anthony. “The FBI is committed to investigating hate crimes, including those perpetrated against people motivated by bias toward religion as in this case, or other areas protected by our civil rights statutes.”

This case was investigated by the Cleveland Division of the FBI and was prosecuted by Assistant U.S. Attorneys Thomas Getz and Bridget M. Brennan of the U.S. Attorney’s Office for the Northern District of Ohio and Deputy Chief Kristy Parker of the Civil Rights Division’s Criminal Section. The prosecutor’s and sheriff’s offices from Holmes, Carroll, Jefferson and Trumbull counties also provided significant assistance in the investigation and prosecution of this case.

The Justice Department reached a settlement agreement today with Avant Healthcare Professionals LLC, a healthcare staffing company based in Casselberry, Fla. , resolving allegations that the company posted discriminatory job advertisements on the internet.

 

According to the department’s investigation, hundreds of Avant Healthcare Professionals’ internet-based job postings contained discriminatory language, impermissibly preferring foreign-trained individuals seeking permanent residence or H-1B visa sponsorship over U.S. workers. The Immigration and Nationality Act (INA) prohibits employers from discriminating on the basis of citizenship or immigration status unless required by law, regulation or government contract. None of those limited exceptions applied to Avant’s recruitment efforts.

 

Under the terms of the settlement agreement, Avant has agreed to pay $27,750 in civil penalties, to change its internal policies and written procedures to incorporate the INA’s anti-discrimination protections, and to be subject to reporting and compliance monitoring requirements for a period of three years.

 

“Federal law protects authorized U.S. workers from illegal and discriminatory preferences,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Employers have a statutory obligation to monitor their online job postings to ensure that they do not violate the anti-discrimination provision of Immigration and Nationality Act.”

 

The Office of Special Counsel for Immigration Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA.  For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), sign up for a no-cost webinar at www.justice.gov/about/osc/webinars.php , email osccrt@usdoj.gov or visit the website at www.justice.gov/crt/about/osc .

WASHINGTON – The Department of Justice announced today that it has reached a settlement with Holtzbrinck Publishers LLC, which does business as Macmillan, and will continue to litigate against Apple Inc. for conspiring with Macmillan and four of the other largest U.S. book publishers to raise e-book prices to consumers.

 

Today’s proposed settlement was filed in the U.S. District Court for the Southern District of New York.  If approved by the court, the settlement will resolve the department’s competitive concerns involving Macmillan.  The department’s Antitrust Division previously settled its claims against four book publishers–Hachette Book Group Inc., HarperCollins Publishers L.L.C., Penguin Group (USA) Inc. and Simon & Schuster Inc. 

 
On April 11, 2012, the department filed a lawsuit against Apple and the five publishers alleging they conspired to eliminate retail price competition, resulting in consumers paying millions of dollars more for their e-books.  The settlement with Hachette, HarperCollins and Simon & Schuster was approved by the court in September 2012.  The public comment period on the department’s settlement with Penguin will close on March 5, 2013.  The trial against Apple is scheduled to begin in June 2013. 

 

“As a result of today’s settlement, Macmillan has agreed to immediately allow retailers to lower the prices consumers pay for Macmillan’s e-books,” said Jamillia Ferris, Chief of Staff and Counsel at the Department of Justice’s Antitrust Division.  “Just as consumers are already paying lower prices for the e-book versions of many of Hachette’s, HarperCollins’ and Simon & Schuster’s new releases and best sellers, we expect the prices of many of Macmillan’s e-books will also decline.”

 

According to the complaint, the five publishers and Apple were unhappy that competition among e-book sellers had reduced e-book prices and the retail profit margins of the book sellers to levels they thought were too low.  To address these concerns, the department said the companies worked together to raise retail e-book prices and eliminate price competition, substantially increasing prices paid by consumers.  Before the companies began their conspiracy, retailers regularly sold e-book versions of new releases and bestsellers for, as described by one of the publisher’s CEO, the “wretched $9.99 price point.”  As a result of the conspiracy, consumers were typically forced to pay $12.99, $14.99 or more for the most sought after e-books, the department said.

 

Under the proposed settlement agreement, Macmillan will immediately lift restrictions it has imposed on discounting and other promotions by e-book retailers and will be prohibited until December 2014 from entering into new agreements with similar restrictions.  The proposed settlement agreement also will impose a strong antitrust compliance program on Macmillan, including requirements that it provide advance notification to the department of any e-book ventures it plans to undertake jointly with other publishers and regularly report to the department on any communications it has with other publishers.  Also for five years, Macmillan will be forbidden from agreeing to any kind of most favored nation (MFN) provision that could undermine the effectiveness of the settlement.  

 

Macmillan has its principal place of business in New York City.  It publishes e-books and print books through publishers such as Farrar, Straus and Giroux and St. Martin’s Press. Verlagsgruppe Georg von Holtzbrinck GmbH owns Holtzbrinck Publishers LLC, which does business as Macmillan, and has its principal place of business in Stuttgart, Germany.

 
Hachette Book Group USA has its principal place of business in New York City.  It publishes e-books and print books through its publishers such as Little, Brown and Company and Grand Central Publishing. 

 

HarperCollins Publishers L.L.C. has its principal place of business in New York City.  It publishes e-books and print books through publishers such as Harper and William Morrow.

 

Penguin Group (USA) Inc. has its principal place of business in New York City.  It publishes e-books and print books through publishers such as The Viking press and Gotham Books.  Penguin Group (USA) Inc. is the U.S. subsidiary of The Penguin Group, a division of Pearson plc, which has its principal place of business in London.

 

Simon & Schuster Inc. has its principal place of business in New York City.  It publishes e-books and print books through publishers such as Free Press and Touchstone.

 

Apple Inc. has its principal place of business in Cupertino, Calif.  Among many other businesses, Apple distributes e-books through its iBookstore.

 

The proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register, consistent with the requirements of the Antitrust Procedures and Penalties Act.  Any person may submit written comments concerning the proposed settlement within 60-days of its publication to John R. Read, Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., 4th Floor, Washington, D.C. 20530.  These comments will be published either in the Federal Register or, with the permission of the court, will be posted electronically on the department’s website.  At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

A federal district judge in Florence, S.C., permanently barred Rachel D. Watson, of Florence, and Susann Allen of Darlington, S.C., from preparing federal income tax returns for others, the Justice Department announced today. The injunctions bar Watson and Allen from preparing returns for others and require them to send copies of the injunction to any employers for whom they prepared returns since Jan. 1, 2008.

According to the government’s complaint in the case, Watson and Allen prepared federal income tax returns at a number of businesses in South Carolina including, most recently, Fludd’s Express Tax Service and Gold Valley Pawn. The complaint alleged that Watson and Allen prepared returns that unlawfully claimed the Earned Income Tax Credit by reporting fictitious Schedule C businesses or business income or fictitious dependents. The complaint also alleged that Watson and Allen fabricated or inflated deductions. The complaint alleged that these activities led to their clients filing returns which unlawfully understated income tax liabilities and overstated refunds. Watson and Allen consented to the entry of the injunctions.

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. Susann Allen, et al.

Permanent Injunction By Stipulation and Consent (Watson) (PDF)
Permanent Injunction By Stipulation and Consent (Allen) (PDF)

Granite Construction Company, a California-based construction company specializing in roads, tunnels, bridges, airports and other infrastructure-related projects, reached a settlement with the United States following an investigation of alleged false claims in connection with federal construction projects across the country, the Justice Department announced today. Granite has agreed to pay the United States $367,500.

 

The settlement resolves claims that Granite overcharged the government on certain federal construction projects funded by the Department of Transportation (DOT) and the Army Corps of Engineers between 2006 and 2008. Specifically, in certain instances, Granite sought price increases in the form of change orders and requests for equitable adjustment which were inflated because the general liability and workman’s compensation insurance rates used to support the adjustments included added amounts or “cushions” that were not actually incurred by the company and therefore should not have been charged to the federal government. Granite disclosed the potential overcharges to the Justice Department.

 

“Federal contractors will be held accountable for their billing practices,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice’s Civil Division. “This settlement is an example of the department’s commitment to ensuring that contractors deal squarely and honestly with the government at all times.”

 

“To prevent and detect potential violations of law, we encourage federal contractors to apply consistent oversight to their operations throughout all phases of contracting,” said DOT Office of Inspector General Special Agent in Charge Hank Smedley.  “This settlement is an example of how we work with our law enforcement colleagues to protect taxpayer dollars.”

 

The investigation and settlement was the result of a coordinated effort by the Civil Division of the Department of Justice and the Department of Transportation Office of Inspector General. The claims settled by this agreement are allegations only, and there has been no determination of liability.

Antoinette Djonret was sentenced today to 144 months in prison for her involvement in two separate tax fraud schemes, the Justice Department and the Internal Revenue Service (IRS) announced. She was also ordered to pay $1,291,658 in restitution. In October 2012, Djonret had pleaded guilty to charges in the two cases. In the first case, Djonret pleaded guilty to charges of conspiracy and aggravated identity theft. She pleaded guilty to filing false tax returns in the second case.

According to court documents from the first case, between October 2009 and April 2012, Djonret and her co-conspirators used stolen identities to file more than 1,000 false tax returns that fraudulently claimed over $1.7 million in tax refunds. Djonret and her co-conspirators filed most of these tax returns from her residence in Montgomery, Ala.

 

According to court records, 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 by recruiting a number of individuals to purchase prepaid debit cards for use in the scheme. The individuals Djonret recruited to launder the refund proceeds recruited other individuals to purchase the debit cards. Djonret and her co-conspirators used the debit cards onto which the fraudulent tax refunds were placed. Three of the co-conspirators she recruited have also pleaded guilty and are currently awaiting sentencing.

 

Documents introduced as part of the sentencing established that Djonret was also involved in a separate tax fraud scheme. Prior to beginning her identity theft scheme, Djonret worked at a tax return preparation business called Premier Tax, where she prepared false tax returns for clients of the business.

 

“Sophisticated Stolen Identity Refund Fraud schemes have the potential to harm many taxpayers and put large amounts of public money at risk,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “Sentences like the one handed down today are a warning to criminal enterprises that there are severe penalties for committing these types of tax crimes.”

 

“These identity thieves are becoming more devious, creative, and conniving,” said George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama. “They steal our identities, steal government money, and prey upon our citizens. However, my office is unrelenting. These criminals must be and will continue to be prosecuted in order to obtain justice for our victims from the Middle District of Alabama as well as justice for our nation.” 

 

“Today’s announcement exemplifies IRS Special Agents’ intense focus on the rigorous pursuit of identity theft and refund fraud,” said Richard Weber, Chief IRS Criminal Investigation. “Djonret perpetuated an elaborate scheme driven by insatiable greed and a blatant disregard for the tremendous damage inflicted on innocent victims. Be assured that IRS Criminal Investigation, together with our partners at the U.S. Attorney’s Office, will hold those who engage in similar behavior fully accountable.”

 

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, Justin Gelfand and Michael Boteler, and Assistant U.S. Attorney Jared Morris, who prosecuted the two cases.

 

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

St. Joseph’s Medical Center, a hospital located in Towson, Md., has reached a settlement with the United States to pay $4.9 million in connection with its submission of false claims to Medicare, Medicaid and other federal healthcare programs, the Justice Department announced today.

 

This settlement resolves the hospital’s civil liability to the United States under the False Claims Act for the hospital’s disclosure that from 2007-2009 it engaged in a practice of admitting patients to the hospital unnecessarily. In particular, the hospital disclosed that it admitted patients for short stays – typically one or two days – that were not warranted by the patient’s medical condition, and thereby generated a larger reimbursement than was proper for each patient. Of the $4.9 million to be paid by St. Joseph’s, $4.6 million will go the United States, and $152,406 will go to the state of Maryland, which is also a party to the agreement.

 

“The improper admission of patients for the purpose of obtaining increased reimbursement is a significant drain on the resources of federal and state healthcare programs,” said Stuart F. Delery, Principal Deputy Assistant Attorney General of the Justice Department’s Civil Division. “This recovery reflects the Department’s continuing efforts to safeguard federal funds.”

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 billion.

 

Mr. Delery thanked the Department of Health and Human Services, Office of the Inspector General; the U.S. Attorney’s Office for the District of Maryland; and the Justice Department’s Commercial Litigation Branch, for their resolution of this matter.

The United States has asked a federal court to shut down a tax-preparation office in Miami, the Justice Department announced today. The civil injunction suit, filed in U.S. District Court for the Southern District of Florida, alleges that Olivia Greene and Walter Jefferson of Miami prepare returns through Angel Tax Service with falsely-claimed credits, including fuel tax credits, the earned-income tax credit, the work pay credit and educational credits.

According to the complaint, in order to conceal her role in this scheme, Greene prepared returns using an alias, Olivia Mayo. The complaint alleges that after the Internal Revenue Service (IRS) rejected Greene’s application for a preparer ID number, she hired other persons to obtain ID numbers in their names for Greene to use.

The IRS lists return-preparer fraud and false fuel tax credits as two of its “Dirty Dozen” tax scams .

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. Olivia Greene, etc., et al.
Complaint and Request for Injunctive Relief (PDF)

Ashu Bhandari, the former president and CEO of GEM Manufacturing LLC, a U.S. Virgin Islands-based company, was sentenced Thursday in federal court in St. Thomas, U.S.V.I., for felony customs violations for his role in a scheme to illegally import protected black coral into the United States, the Department of Justice announced. Bhandari is the last defendant to be sentenced as the result of a far reaching investigation into the illegal trade in black coral. The scheme cost Bhandari’s company, GEM Manufacturing, millions of dollars in financial penalties and sent two of his trading partners to prison.

At today’s hearing, the court imposed a criminal fine of $918,950 and sentenced Bhandari to one month in jail, to be followed by one month of home confinement and one year of supervised release, during which Bhandari would be required to complete 300 hours of community service and be banned from any business venture involving coral or coral products. In addition to the fine, Bhandari will be required to pay $229,687 to the University of the Virgin Islands to be used for community service projects designed to research and protect black corals.  The court recognized that Bhandari’s sentence was based, in part, on his cooperation with federal investigators in related illicit coral trafficking cases.

On Nov. 7, 2012, Ashu Bhandari pleaded guilty to one felony count of false classification of goods for his efforts to conceal his illegal importation of internationally protected black coral in 2009.  GEM was in the business of manufacturing high-end jewelry and sculpture products that utilize black coral. During his term as CEO, Bhandari was responsible for ensuring the continued supply of raw black coral for the company. Black corals are considered important habitat for the deep sea marine environment and are protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Each of the species of black coral is listed in Appendix II of CITES and is subject to strict trade regulations. 

Bhandari admitted that by 2008, he learned that GEM’s Taiwanese suppliers of black coral could not obtain legitimate CITES certificates. In spite of this knowledge, Bhandari made a “business decision to go forward” with the Taiwanese suppliers. The Taiwanese suppliers would label the coral shipments as “plastic” in order to fool customs authorities in Hong Kong and the United States.  Bhandari admitted that by 2009 he knew that the shipments he arranged on behalf of GEM were coming into St. Thomas falsely labeled.

 “Mr. Bhandari actively participated in an illegal scheme to traffic in protected black coral, a trade that has helped deplete a world resource that serves as essential habitat for marine biodiversity,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “As this case clearly shows, the Department of Justice will continue to aggressively prosecute those who violate U.S. law by illegally trafficking in protected species.” 

“The effective stewardship of our natural resources by vigorously enforcing environmental laws is a priority of the Department of Justice,” said Ronald W. Sharpe, U.S. Attorney for the District of the Virgin Islands. “This prosecution, like many cases involving the investigation and prosecution of those who set out to exploit our precious natural resources, was complex, time consuming and required the expertise of multiple law enforcement agencies. The dedication and cooperative efforts of the various law enforcement agencies involved in the successful prosecution of this matter are to be commended.”

“This investigation is the culmination of a three year joint investigation led by U.S. Fish and Wildlife Service’s Office of Law Enforcement in partnership with the National Oceanic and Atmospheric Administration, U.S. Immigration and Customs Enforcement-Homeland Security Investigations, U.S. Attorney’s Office, the U.S. Justice Department’s Environment and Natural Resources Division and U.S. Customs and Border Protection,” said U.S. Fish and Wildlife Service Resident Agent in Charge David Pharo. “This investigation serves as a great example of multiple agencies, working together to stem the tide of exploitation of internationally protected species originating in marine environments. This investigation demonstrates our commitment to combat illegal international wildlife trafficking and bring justice to those that exploit protected marine resources for personal gain no matter where they are located.”

 “Illegal importation and exportation of commercial quantities of CITES-protected corals is one of our Division's high priorities,” said Otha Easley, Acting Special Agent in Charge for the National Oceanic and Atmospheric Administration’s Office of Law Enforcement's Southeast Division. “Effective enforcement of CITES helps ensure that collection of these species is sustainable and that their survival in the wild is assured.”

“This sentence sends a clear message to black coral traffickers that we and our federal law enforcement partners are in the business of preventing illegal wildlife trade,” said Angel Melendez, Acting Special Agent in charge of HSI San Juan and U.S.V.I. “We will continue to identify and apprehend those who exploit protected species for commercial gain.”

Black coral is a precious coral that can be polished to a high sheen, worked into artistic sculptures and used in inlaid jewelry. Black coral is typically found in deep waters and many species have long life spans and are slow-growing.  Using deep sea submersibles, scientists have observed that fish and invertebrates tend to accumulate around the black coral colonies. Thus, black coral communities serve important habitat functions in the mesophotic and deepwater zones.  In the last few decades, pressures from overharvesting, due in part to the wider availability of scuba gear and the introduction of invasive species have threatened this group of coral.  Recent seizures of illegal black coral around the world have led many to believe that black coral poaching is on the rise.

On Oct. 26, 2011, in the related case of U.S. v. GEM Manufacturing LLC, Case No. 2011-19 (D. Virgin Islands), GEM was sentenced to criminal financial penalties and forfeitures exceeding $4.47 million and three and a half years of probation that included a 10-point compliance plan that incorporated an auditing, tracking and inventory control program.  GEM was also banned from doing business with its former coral supplier, Peng Chia Enterprise Co. Ltd. and its management team of Ivan and Gloria Chu.  Ashu Bhandari was the individual known as “Co-conspirator X” in the related case of U.S. v. Gloria and Ivan Chu, Case No. 2010-003 (D. Virgin Islands).   In January 2010, federal agents arrested the Chus as part of a sting operation in Las Vegas.  The Chus were subsequently indicted in 2010 for illegally providing black coral to GEM.  On June 23, 2010, Ivan Chu was sentenced to serve 30 months in prison and pay a $12,500 fine.  Gloria Chu was sentenced to serve 20 months in prison and pay a $12,500 fine.

The case, developed as a result of Operation “Black Gold”, was investigated by agents of the U.S. Fish and Wildlife Service (FWS) and NOAA with support from U.S. Immigration and Customs Enforcement-Homeland Security Investigations and U.S. Customs and Border Protection.  Analysis of coral samples by the FWS’s National Forensics Laboratory in Ashland, Ore., was critical to the investigation. The case was prosecuted by Christopher Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division and Nelson Jones of the U.S. Attorney’s Office in the U.S. Virgin Islands.

Everett Dwayne Avery, 26, of Detroit, was sentenced today by U.S. District Judge John Corbett O’Meara after pleading guilty to committing a hate crime by assaulting a man because the man was gay. Avery was sentenced to serve 18 months in prison to be followed by three years of supervised release.

The assault occurred on March, 7, 2011, while Avery and the victim were at a convenience store in Detroit. Avery used anti-gay slurs toward the victim as Avery and the victim waited in line in the convenience store. Shortly after the first slurs, while still in the store, Avery used another anti-gay slur and punched the victim in the face, fracturing the victim’s eye socket. Avery pled guilty to violating the federal Hate Crimes Protection Act on Aug. 29, 2012.

"Hate-fueled incidents like this one have 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."

“Congress has made it clear that it is a crime to assault people solely on the basis of their sexual orientation.  Prosecutions under this law are important to ensure that all people in our community know that they have the full protection of the law,” said U.S. Attorney for the Eastern District of Michigan Barbara McQuade.

Special Agent in Charge Foley stated, "Hate Crimes have no place in a civilized society. We are a nation of laws and our laws embrace diversity and differences. The law does not tolerate the type of hate demonstrated in this matter and the FBI will investigate and put forth for prosecution a violation of that law."

The case was investigated by the FBI. The case was prosecuted by Assistant U.S. Attorney Pamela Thompson from the U.S. Attorney’s Office, and Trial Attorney Sanjay Patel from the Civil Rights Division of the U.S. Department of Justice.

RBS Securities Japan Limited, a wholly owned subsidiary of The Royal Bank of Scotland plc (RBS), has agreed to plead guilty to felony wire fraud and admit its role in manipulating the Japanese Yen London Interbank Offered Rate (LIBOR), a leading benchmark used in financial products and transactions around the world, Assistant Attorney General Lanny Breuer of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Scott D. Hammond of the Justice Department’s Antitrust Division and Special Agent in Charge Timothy A. Gallagher of the FBI’s Washington Field Office Criminal Division announced today. 

A criminal information, being filed in U.S. District Court for the District of Connecticut, charges RBS Securities Japan with one count of wire fraud for engaging in a scheme to defraud counterparties to interest rate derivatives trades by secretly manipulating Yen LIBOR benchmark interest rates.  RBS Securities Japan has signed a plea agreement with the government admitting its criminal conduct, and has agreed to pay a $50 million fine.

In addition, the government is filing a criminal information in the District of Connecticut which charges parent company RBS as part of a deferred prosecution agreement (DPA).  The information charges RBS with wire fraud for its role in manipulating LIBOR benchmark interest rates, and with participation in a price-fixing conspiracy in violation of the Sherman Act by rigging the Yen LIBOR benchmark interest rate with other banks.  The DPA requires the bank to admit and accept responsibility for its misconduct as described in an extensive statement of facts, to continue cooperating with the Justice Department in its ongoing investigation and to pay a $100 million penalty beyond the fine imposed upon RBS Securities Japan.  

Together with approximately $462 million in regulatory penalties and disgorgement – $325 million as a result of a Commodity Futures Trading Commission (CFTC) action and approximately $137 million as a result of a U.K. Financial Services Authority (FSA) action – the Justice Department’s criminal penalties bring the total amount of the resolution with RBS and RBS Securities Japan to approximately $612 million.

“As we have done with Barclays and UBS, we are today holding RBS accountable for a stunning abuse of trust,” said Assistant Attorney General Breuer.  “The bank has admitted to manipulating one of the cornerstone benchmark interest rates in our global financial system, and its Japanese subsidiary has agreed to plead guilty to felony wire fraud.  The department’s ongoing investigation has now yielded two guilty pleas by significant financial institutions.  These are extraordinary results, and our investigation is far from finished.  Our message is clear:  no financial institution is above the law.”

“RBS secretly rigged the benchmark interest rates upon which many transactions and consumer financial products are based,” said Deputy Assistant Attorney General Hammond. “RBS’ conduct not only harmed its unsuspecting counterparties, it undermined the integrity and the competitiveness of financial markets everywhere.”

“The manipulation of LIBOR by RBS and its subsidiary directly affected the rates referenced by financial products held by and on behalf of American companies and investors. The FBI works to uncover wrongdoing such as this in order to protect American consumers and the integrity of financial markets,” said Special Agent in Charge Gallagher.  “Today’s announcement is the result of the hard work of the FBI special agents, financial analysts, and forensic accountants as well as the prosecutors who dedicated significant time and resources to investigating this case.”

According to court documents, LIBOR is an average interest rate, calculated based upon submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks.  LIBOR serves as the primary benchmark for short-term interest rates globally, and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products.  The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were valued at approximately $450 trillion. 

LIBOR, published by the British Bankers’ Association (BBA), a trade association based in London, is calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year.  The LIBOR for a given currency at a specific maturity is the result of a calculation based upon submissions from a panel of banks for that currency (the Contributor Panel) selected by the BBA.  From at least 2006 through 2010, RBS has been a member of the Contributor Panel for a number of currencies, including Yen LIBOR and Swiss Franc LIBOR, which are the focus of the plea agreement and DPA.

According to the DPA, at various times from at least 2006 through 2010, certain RBS Yen and Swiss Franc derivatives traders – whose compensation was directly connected to their success in trading financial products tied to LIBOR – engaged in efforts to move LIBOR in a direction favorable to their trading positions.  Through these schemes, RBS allegedly defrauded counterparties who were unaware of the manipulation affecting financial products referencing Yen and Swiss Franc LIBOR.  The alleged schemes included hundreds of instances in which RBS employees sought to influence LIBOR submissions in a manner favorable to their trading positions in two principal ways: internally at RBS through requests by derivatives traders for Yen and Swiss Franc LIBOR submissions, and externally through an agreement with a separately charged derivatives trader to request Yen LIBOR submissions.  The trader, Tom Alexander William Hayes, was formerly employed by a Japanese subsidiary of another Contributor Panel bank, UBS AG (UBS).

According to the DPA, RBS employees engaged in this conduct through electronic communications, which included both emails and electronic chats.  For example, in an electronic chat on March 16, 2009, an RBS Swiss Franc derivatives trader, (Trader-7), sought to benefit his trading book by asking the RBS LIBOR submitter (Submitter-1), “can we pls get a very very very low 3m [3 month] and 6m [6 month] fix today [please]” because “we have rather large fixings!”  Submitter-1 responded, “perfect, if that’s what u want.”  After thanking Submitter-1, Trader-7 informed Submitter-1 that “from tomorrow . . .  we need them thru the roof!!!!!” 

In another electronic chat on May 20, 2009, involving an RBS Yen derivatives trader, (“Trader-2”), Submitter-1, and others, the following exchange occurred:

 Trader-2: high 3s and low 6s pls [Submitter-1]

 Submitter-1: no problems

 Trader-2: grazias amigo . . . where will you lower 6s to?

 Submitter-1: 70

That day, RBS’s 6-month Yen LIBOR submission dropped two basis points from .72 to .70, before reverting to .72 the following two days.
 
RBS employees also allegedly furthered their collusive scheme with Hayes to fix the price of derivative instruments tied to Yen LIBOR through electronic communications.  For instance, in an electronic chat on April 20, 2007, Hayes requested that an RBS derivatives trader, (“Trader-3”), ask Submitter-1 for a low 3 month Yen LIBOR submission: 

Hayes: . . . if you could ask your guys to keep 3m low wd be massive help as long as it doesn’t interfere with your stuff . . . tx in adavance.

Approximately 30 minutes later, Hayes and Trader-3 had the following exchange:

Hayes:   mate did you manage to spk to your cash boys?

Trader-3:  yes u owe me they are going 65 and 71

Hayes:  thx mate yes i do . . . in fact i owe you big time

Approximately 45 minutes later, Hayes sent the following message to Trader-3:

Hayes:  mater they set 64! . . . thats beyond the call of duty!

* * * *
 Trader-3: no worries

By entering into a DPA with RBS, the Justice Department credits RBS’ cooperation in disclosing LIBOR misconduct within the financial institution, recognizes the significant remedial measures undertaken by RBS’ management to enhance internal controls, and acknowledges the additional reporting, disclosure and cooperation requirements undertaken by the bank.  The DPA does not prevent the Justice Department from prosecuting individuals for related conduct. 

The pending charges against Hayes are merely accusations and he is considered innocent unless and until proven guilty.

The prosecution of RBS is being handled by Deputy Chief Patrick Stokes and Trial Attorney Gary Winters of the Criminal Division’s Fraud Section, and New York Field Office Assistant Chief Elizabeth Prewitt and Trial Attorneys Eric Schleef and Richard Powers of the Antitrust Division.  Deputy Chiefs Daniel Braun and William Stellmach, Assistant Chief Rebecca Rohr and Trial Attorneys Luke Marsh and Alex Berlin of the Criminal Division’s Fraud Section, Trial Attorneys Daniel Tracer and Kristina Srica of the Antitrust Division, Jeremy Verlinda of the Antitrust Division’s Economic Analysis Group, Assistant U.S. Attorneys Eric Glover and Liam Brennan of the U.S. Attorney’s Office for the District of Connecticut and the Criminal Division’s Office of International Affairs have also provided valuable assistance in this matter.  The investigation is being conducted by special agents, forensic accountants and intelligence analysts of the FBI’s Washington Field Office. 
 
The investigation leading to these cases has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad.  The Justice Department acknowledges and expresses its deep appreciation for this assistance.  In particular, the CFTC’s Division of Enforcement referred this matter to the department and, along with the FSA, has played a major role in the investigation.  The Securities and Exchange Commission has also played a significant role in the LIBOR series of investigations.  Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.
 
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.

Related Materials:

Deferred Prosecution Agreement
Plea Agreement and Statement of Facts

The Justice Department announced today that, as part of its Barrier-Free Health Care Initiative, it has reached a settlement with Castlewood Treatment Center LLC, of St. Louis, Mo., under the Americans with Disabilities Act (ADA).  The settlement resolves allegations that Castlewood Treatment Center violated the ADA by refusing to treat a woman for a serious eating disorder because she has HIV.  This is the second settlement addressing HIV discrimination by a medical provider reached by the Justice Department in two weeks. 

The Justice Department found that Castlewood refused to treat Susan Gibson because of her HIV, despite Castlewood’s determination that she was qualified to receive counseling treatment for her eating disorder, and despite advice from its own medical staff that they were able to treat someone with HIV at Castlewood.  The department also determined that for months Castlewood staff told Gibson that she was on a waiting list for the program, even though they had no intention to admit her into the program.  In the meantime, Gibson’s condition worsened and her health declined.  Castlewood’s actions delayed Gibson from receiving appropriate medical treatment for up to seven months.  Gibson’s complaint was brought to the Justice Department’s attention by the American Civil Liberties Union, LGBT & AIDS Project.

“Excluding a person from necessary medical treatment solely because of HIV is unconscionable,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “The Civil Rights Division takes HIV discrimination in any form seriously, and will not allow for the marginalization of those living with HIV.” 

Under the settlement, the Castlewood Treatment Center must pay $115,000 to Gibson and $25,000 in civil penalties.  In addition, Castlewood must train its staff on the ADA and develop and implement an anti-discrimination policy.  The department will monitor Castlewood’s compliance for four years.

Last week the department announced a similar agreement with the Fayetteville Pain Center to address HIV discrimination.  Both 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 http://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.

Related Materials:

Castlewood Settlement Agreement

Louis Daniel Smith, 42, and Karis Delong, 38, both of Ashland, Ore., were charged with defrauding regulators and suppliers in a scheme to manufacture and sell industrial bleach as a cure for numerous illnesses, including arthritis, cancer, and the seasonal flu. Also charged were Chris Olson, 49, and Tammy Olson, 50, of Nine Mile Falls, Wash. A federal grand jury returned an indictment, unsealed yesterday, charging Smith, Delong and Tammy Olson with one count of conspiracy, four counts of interstate sales of misbranded drugs, and one count of smuggling. The grand jury charged Chris Olson with one count of conspiracy, one count of the interstate sale of a misbranded drug and one count of smuggling.

 

The indictment alleges that Smith and Delong operated a business called “Project GreenLife” (PGL) from 2004 to 2011. PGL provided various health products for sale over the internet. According to the indictment, Smith and Delong arranged the manufacture and sale of the “Miracle Mineral Supplement” (MMS), a mixture of Sodium Chlorite and water. Sodium chlorite is not meant for human consumption. Suppliers of the chemical include a warning sheet with the chemical that states that it is harmful if swallowed.

 

According to the indictment, PGL provided consumers directions to combine MMS with citric acid to create Chlorine Dioxide, and the instructions told consumers to drink this mixture to cure numerous illnesses. Chlorine Dioxide is a potent agent used to bleach textiles, among other industrial applications. In humans, Chlorine Dioxide is a severe respiratory and eye irritant that can cause nausea, diarrhea and dehydration.

 

As part of the scheme to manufacture MMS, the indictment alleges that Smith, Delong, and others smuggled sodium chlorite into the United States from Canada using fraudulent invoices to hide the true end use of the product. In these invoices, according to the indictment, they falsely claimed that the ingredients they were purchasing for MMS were to be used in wastewater treatment facilities.

 

According to the charging documents, Smith and Delong were the managing members of PGL Smith co-founded the company, and Delong frequently handled financial transactions for the company and recruited friends and family to participate in the business. The indictment alleges that Smith and Delong paid Tammy Olson to handle all customer inquiries regarding the product. It is alleged that Tammy Olson continued selling MMS on her own website after federal agents shut down the Project GreenLife website and production facilities.

 

The indictment also alleges that Smith and Delong paid Chris Olson to clandestinely manufacture MMS in a building on his property after regulators from the Food and Drug Administration (FDA) inspected PGL’s original manufacture and shipping locations.

 

“The Department of Justice is committed to protecting the health and safety of people with cancer and other serious medical conditions,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “Our most vulnerable citizens need real medicine – not dangerous chemicals peddled by modern-day snake oil salesmen.”

 

Charges contained in the indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty it is to determine guilt or innocence.

 

The case was investigated by agents of the FDA’s Office of Criminal Investigations and the U.S. Postal Inspection Service. The case is being prosecuted by Christopher E. Parisi, a Trial Attorney at the Department of Justice’s Consumer Protection Branch in Washington, D.C.

Five individuals and five corporations have been charged in an indictment unsealed today in Brooklyn, N.Y., for allegedly importing hazardous and counterfeit toys from China for sale in the United States, announced Assistant Attorney General Lanny Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of New York Loretta E. Lynch; Special Agent in Charge of Homeland Security Investigations (HSI) in New York James T. Hayes Jr.; Robert E. Perez, New York Field Operations Director of Customs and Border Protection (CBP); Chairman Inez Tenenbaum of the Consumer Product Safety Commission (CPSC); and Commissioner Raymond W. Kelly of the New York City Police Department (NYPD).
 
The 24-count indictment charges Chenglan Hu, 51, Hua Fei Zhang, 52, and Xiu Lan Zhang, 60, all Chinese nationals and residents of Queens, N.Y., and Guan Jun Zhang, 29, and Jun Wu Zhang, 28, both naturalized citizens and Queens residents, along with their closely held companies Family Product USA Inc., H.M. Import USA Corp., ZCY Trading Corp., Zone Import Corp. and ZY Wholesale Inc., with importing and trafficking hazardous toys in violation of the Consumer Product Safety Act (CPSA) and toys bearing copyright-infringing images and counterfeit trademarks, smuggling, money laundering and structuring.
 
“The defendants are accused of importing and selling toys that posed significant health hazards to children or were the product of blatant intellectual property theft,” said Assistant Attorney General Breuer. “They allegedly retooled their operations many times in order to avoid detection, and despite repeated citations by the authorities, they continued to peddle counterfeit toys featuring Dora the Explorer, SpongeBob SquarePants and other popular children’s characters.  Today’s actions reflect a Justice Department focused on ensuring that consumers receive safe and legitimate goods.”
 
“For years, the defendants sought to enrich themselves by importing and selling dangerous and counterfeit children’s toys without regard for the law or the health of our children,” said U.S. Attorney Lynch.  “Profits from the counterfeit items, as well as toys riddled with lead and choking hazards, went to provide the defendants with luxury cars.  We stand committed to protecting the residents of our communities from those who would engage in such conduct.”  
 
The five individual defendants were arrested this morning, and a federal task force comprising HSI agents, other federal agents and NYPD officers, aided by CBP officers and CPSC investigators, executed four search warrants and nine seizure warrants.  The agents, officers and investigators searched the defendants’ warehouse, two residences and an email account.  In addition, three luxury vehicles, including a Porsche and Lexus, three personal bank accounts and three corporate accounts were seized.  The agents also filed lis pendens on two of the defendants’ properties in Queens, N.Y.  The defendants’ initial appearances are scheduled this afternoon before U.S. Magistrate Judge Ramon E. Reyes Jr. in the Eastern District of New York.
 
The indictment charges that from July 2005 through January 2013 the individual defendants used their companies, the corporate defendants, to import toys from China that they sold, both wholesale and retail, from a storefront and warehouse in Ridgewood, N.Y., and other locations in Brooklyn and Queens.

According to the indictment, the defendants’ companies had children’s toys seized by CBP from shipping containers entering the United States from China on 33 separate occasions.  Seventeen of the 33 seizures were of violative toys – toys prohibited from import into and distribution in the United States, under laws and regulations enforced by the CPSC, because of excessive lead content, excessive phthalate levels, small parts that presented choking, aspiration or ingestion hazards, and easily accessible battery compartments.  Sixteen of the 33 seizures were of toys bearing copyright-infringing images and counterfeit trademarks, including knockoff versions of toys featuring a wide variety of popular children’s characters, such as Winnie the Pooh, Dora the Explorer, SpongeBob SquarePants, Betty Boop, Teenage Mutant Ninja Turtles, Power Rangers, Spiderman, Tweety, Mickey Mouse, Pokémon, as well as those from movies, such as the “Cars,” “Toy Story” and “High School Musical.”

The indictment charges that following each of the 33 seizures, the violator toy company was served written notice by CBP detailing the reason for the seizure, and a representative of the company signed a release form acknowledging the seizure and abandoning the seized goods.  Additionally, the violator company and its principal were served written notice by CPSC of the specific safety violations of the toys, and each time a representative of the company signed a release form acknowledging the seizure and abandoning the seized goods. 

Due to the number and volume of the seizures, the individual defendants allegedly shifted their use of the companies and alternated formal roles, in order to continue importing and distributing violative and infringing toys.  Each time the number of seizures accumulated for one company, the individual defendants allegedly formed a new toy company to continue importing the violative and infringing toys.

“The people and companies involved in this illegal trade not only allegedly infringed on intellectual property rights, they placed the lives of innocent children in danger,” said HSI Special Agent in Charge Hayes.  “They allegedly sold toys with high lead content and cheap knock offs with substandard parts that break easily and pose a choking hazard.  HSI is firm on using its unique customs expertise and law enforcement partnerships to put an end to the importation and sale of dangerous goods.”

“Customs and Border Protection is on the forefront of intercepting unsafe, counterfeit products,” said CBP New York Field Operations Director Perez.  “We are proud to have done our part preventing these dangerous toys from getting in the hands of our children.”

“Today’s action highlights the unprecedented level of cooperation and coordination among federal regulatory and law enforcement partners to keep U.S. consumers safe,” said CPSC Chairman Tenenbaum.  “The United States has some of the strongest toy standards and lowest lead limits in the world, and CPSC is committed to enforcing these child safety requirements at the ports and in the marketplace.”

“When it comes to trademark infringement, don’t mess with Mickey or other American icons,” said NYPD Commissioner Kelly.

In the indictment, the government is seeking forfeiture of the seized vehicles and bank accounts and the restrained properties, in addition to a money judgment to be determined at trial.

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

The case is being prosecuted by Trial Attorney Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Claire Kedeshian and William Campos of the Eastern District of New York.  This case was jointly investigated by the HSI Intellectual Property Rights Group and the NYPD, through its participation in the New York Border Enforcement Security Taskforce, with the assistance of CPSC and CBP.

The enforcement action announced today is one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force).  Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation, and hard work.  The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state, and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.  To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.