District Not Recorded

WASHINGTON – A Virginia man was sentenced today in federal court to serve one year and one day in prison for selling counterfeit General Motors (GM) automotive diagnostic devices  used by mechanics to identify problems with and assure the safety of motor vehicles, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, FBI Assistant Director Ronald T. Hosko of the Criminal Investigative Division and Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field Office.

Justin DeMatteo, 31, of Saxe, Va., was sentenced by Senior U.S. District Judge Claude M. Hilton in the Eastern District of Virginia, following his Sept. 26, 2012, guilty plea to one count of trafficking in goods bearing counterfeit marks.  In addition to his prison term, DeMatteo was sentenced to three years of supervised release and ordered to pay restitution of $328,500 (the full amount of GM’s losses).  At DeMatteo’s plea proceeding, the court entered a consent order of forfeiture requiring him to forfeit $109,074 in criminal proceeds and all facilitating property and contraband seized during the execution of search warrants at his business and home on Dec. 15, 2011.

In court documents, DeMatteo admitted he sold counterfeit GM Corporation-branded “Tech 2” vehicle diagnostic systems between January and May 2011.  The Tech 2 is a hand-held computer used to diagnose problems in vehicles that use electronic controls and interfaces. For newer vehicles, GM designed a new diagnostic interface – the Controller Area Network diagnostic interface (CANdi) module, which serves as an enhancement to the Tech 2 and completes the interface necessary to communicate with future on-board computer systems. 

DeMatteo also admitted he offered for sale purported Tech 2 units and CANdi modules that bore counterfeit GM marks.  DeMatteo sold the counterfeit Tech 2 units on eBay and accepted payment via PayPal.  DeMatteo purchased the units from unauthorized manufacturers in the People’s Republic of China (PRC) and in many cases had them drop-shipped directly from the PRC to U.S. customers.  On Dec. 15, 2011, federal agents executed search warrants at DeMatteo’s residence in Saxe and place of business in South Boston, Va.  Among other things, agents seized numerous counterfeit GM Tech 2 units and CANdi modules, and various computer equipment and documents that contained evidence linking DeMatteo to the sale of the counterfeit Tech 2 units.  According to the stipulated statement of facts and plea agreement, the number of Tech 2 and CANdi units sold by DeMatteo or seized during the searches totaled nearly 100.  The retail price of 100 authentic products would have been more than $380,000.

The case was prosecuted by Assistant U.S. Attorney Lindsay Kelly of the Eastern District of Virginia and Trial Attorney Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section and was investigated by the FBI’s Intellectual Property Rights Unit, as part of “Operation Engine Newity,” an international initiative targeting the production and distribution of counterfeit automotive products that impact the safety of the consumer, and the FBI Richmond Division. 

The FBI is a full partner at the National Intellectual Property Rights Coordination Center (IPR Center).  The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy.  The IPR Center uses the expertise of its 19 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to intellectual property (IP) theft.  Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and the war fighters.  To report IP theft or to learn more about the IPR Center, visit www.IPRCenter.gov.

The sentencing announced today was the result of one of many enforcement 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/.

WASHINGTON – A New Zealand fishing company that owned and operated the tuna fishing vessel San Nikunau, and a former chief engineer on the ship, were sentenced in federal court today for environmental crimes and obstruction of justice, announced Assistant Attorney General Ignacia S. Moreno of the Justice Department’s Environment and Natural Resources Division and U.S. Attorney for the District of Columbia Ronald C. Machen Jr.

Sanford Ltd. was ordered to pay a criminal fine of $1.9 million and pay $500,000 in community service to the National Marine Sanctuaries Foundation for the benefit of the Fagatele Bay National Marine Sanctuary in American Samoa.  The former Chief Engineer James Pogue was sentenced to 30 days in jail to be followed by two years of supervised release and ordered to pay a criminal fine of $6,000. 

“Companies, like Sanford, who benefit from fishing in the oceans and selling their catch in the U.S. must comply with the laws that protect the oceans,” said Assistant Attorney General Moreno. “Today’s sentence makes clear that companies, like Sanford, who deliberately break the law by discharging oil waste into the ocean over a period of years and lie to the U.S. Coast Guard (USCG) about their activities, will be held fully accountable under U.S. laws.”

“Deliberately polluting our oceans is not only harmful to our environment– it is criminal,” said U.S. Attorney Machen.  “Today’s sentence sends a clear message to owners and operators of commercial vessels who illegally dump oily waste and try to cover it up.  We are committed to protecting our precious natural resources and will punish companies and individuals who ignore their obligations to our planet and future generations.”

“Some of the world's most pristine marine ecosystems are located in the South Pacific and it is important that the rule of law is regarded and respected even in the most remote areas,” said Captain Joanna Nunan, USCG Commander, Coast Guard Sector Honolulu and Captain of the Port in American Samoa.  “The U.S. Coast Guard is committed to working with the maritime community to help ensure compliance with these environmental standards.”

According to the government’s evidence, in July 2011, the U.S. Coast Guard conducted a Port State Control examination when the vessel returned to Pago Pago, American Samoa. The investigation revealed that the vessel had been routinely discharging oily waste water, without first using equipment to clean the waste water, and making false entries or no entries in an oil record book that vessels are required to maintain accurately, all in violation of international and U.S. laws. 

According to evidence presented at trial, Sanford Ltd. operates the fishing vessel San Nikunau, a vessel that routinely delivers tuna to a cannery in Pago Pago.  Over the past five years, Sanford was paid over $24 million for tuna deliveries.  Sanford Ltd. was convicted of numerous charges including conspiracy and causing the vessel to enter into the port of Pago Pago with a knowingly falsified oil record book.  Sanford Ltd. was also convicted of failing to maintain an accurate oil record book and failing to disclose that required pollution prevention equipment had not been used on the vessel.  Sanford Ltd. was also convicted of discharging machinery space bilge waste into the port of Pago Pago without using required pollution prevention equipment, including the oil water separator.

Pogue, of Idaho, served as the chief engineer on the vessel between 2001 and 2010.  Pogue was convicted of failing to maintain an oil record book for the vessel and failing to account for transfers of machinery space bilge waste to other areas of the vessel.  In addition, Pogue was convicted of intending to influence a Coast Guard investigation by falsely stating in the oil record book that required pollution prevention equipment had been used when it had not. 

This case was investigated by the U.S. Coast Guard.  The case was prosecuted by Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, Assistant U.S. Attorney Frederick W. Yette of the U.S. Attorney's Office for the District of Columbia and James E. McLeod, a Special Assistant U.S. Attorney from U.S. Coast Guard headquarters.

The Justice Department announced today that a settlement has been reached with David Hamilton for violations of the Freedom of Access to Clinic Entrances (FACE) Act.  Under the terms of the agreement Hamilton will pay $2,500 in compensatory damages to the victim of Hamilton’s use of force outside the EMW Women’s Surgical Center in Louisville, Ky.  The United States and Hamilton came to the agreement at a settlement conference held Jan. 7, 2013, in Louisville.  On Jan. 10, 2013, the United States sent Hamilton’s attorney a joint stipulation of dismissal to be filed with the court as soon as Hamilton tenders payment.  

The agreement settles a lawsuit the United States filed against Hamilton for his alleged violation of the FACE Act, which makes it unlawful for any person to use force to intentionally injure, intimidate, or interfere with, or attempt to injure, intimidate, or interfere with, anyone because that person is or has been obtaining or providing reproductive health services.  The United States’ complaint alleged that on Jan. 30, 2010, Hamilton, a regular protester, grabbed and pushed a volunteer escort at the center.  At the time of the incident, the victim was attempting to escort a patient to the front entrance of the center.  The complaint alleged that Hamilton’s actions constituted a use of force that intimidated and interfered with individuals who were attempting to obtain and provide reproductive health services at the center. 

The FACE Act limits statutory compensatory damages to $5,000.  The $2,500 Hamilton agreed to pay will go to the victim in this matter per the terms of the statute.  Hamilton no longer resides in the Louisville area.  

 “It is absolutely crucial that those individuals who desire reproductive health services be able to obtain them in an environment that is free of interference, intimidation and fear,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “By continuing to enforce the Freedom of Access to Clinic Entrances Act, we are helping to ensure that they are able to do so.”

This civil action was filed by Civil Rights Division Special Litigation Section Deputy Chief Julie Abbate and Trial Attorneys Aaron Fleisher and Jack Morse.

The Justice Department announced today that it has sued a Kissimmee, Fla., tax return preparer, seeking to bar him permanently from preparing federal tax returns for others. The civil injunction suit, filed in Orlando, Fla., with the U.S. District Court for the Middle District of Florida, alleges that Carlos A. Cabrera and his business – Cabrera Financial Group – prepare federal income tax returns for customers that claim improper losses for non-existent businesses and fabricated education credits in order to unlawfully understate customers’ tax liabilities.       

According to the civil injunction complaint, Cabrera prepared over 17,000 tax returns for 2009 and 2010, with an average tax understatement of $4,222 per return for returns the Internal Revenue Service examined. The government suit alleges that the total losses to the U.S. Treasury from Cabrera’s misconduct could be tens of millions of dollars for those two years alone.

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

Related Materials:

United States v. Carlos A. Cabrera

Complaint for Permanent Injunction and Other Relief (PDF)

 

The Justice Department announced that yesterday it reached an agreement with Illinois officials to help ensure that military service members, their family members and other U.S. citizens living overseas have an opportunity to participate fully in the upcoming Feb. 26, 2013, special primary election, and the April 9, 2013, special election to fill a vacated seat in the state’s 2nd Congressional District.  The agreement is necessary to ensure Illinois’s compliance with the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA) as amended by the 2009 Military and Overseas Voter Empowerment Act (MOVE Act).

The agreement, filed yesterday evening, which must be approved by the federal district court in Chicago, requires that by Jan. 15, 2013, the state will ensure expedited transmittal of ballots for the special primary election to UOCAVA voters who have requested them by that date.  The agreement also requires that by Jan. 31, 2013, the state will resolve any candidate petition challenges and ensure expedited notice to UOCAVA voters of the final list of candidates for the special primary election.  The voted ballots must be postmarked by Feb. 25, 2013, and received by March 6, 2013, to be counted in the special primary election.   

The agreement also requires that by March 8, 2013, the state will ensure expedited transmittal of ballots for the April 9, 2013 special election to all UOCAVA voters who have requested them.  Under Illinois law, the voted ballots must be postmarked by April 8, 2013, and received by April 23, 2013 to be counted in the special election. 

In addition, for both the special primary election and the special election, the state will provide all UOCAVA voters the option of returning their marked ballots by email, fax or express mail at no expense to the voter.       

“This agreement reflects this department’s continued and resolute commitment to ensure that members of our armed forces, their families and overseas citizens are offered a full and meaningful opportunity to vote in all federal elections, including special elections scheduled to fill vacated seats,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “I am pleased that we are able to reach this agreement with Illinois officials, which will ensure that these voters can fully participate in the state’s upcoming special primary election and special election.”

The UOCAVA requires states to allow uniformed service voters, serving both overseas and within the United States, and their families and overseas citizens to register to vote and to vote absentee for all elections for federal office.  In 2009, Congress enacted the MOVE Act, which made broad amendments to UOCAVA.  Among those changes was a requirement that states transmit absentee ballots to voters covered under UOCAVA, by mail or electronically at the voter’s option, no later than 45 days before federal elections.

Under the terms of the agreement, the state will also provide detailed reports to the department concerning the transmission of ballots for the special primary election and special election.  The state will also take actions as are necessary to assure that UOCAVA voters shall have a fair and reasonable opportunity to participate in future federal elections, including actions needed to fully remedy any potential UOCAVA violations arising from Illinois law governing the state’s special election calendar. 

More information about UOCAVA and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/about/vot/misc/activ_uoc.php . Please report any complaints to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

 

Related Materials:

Illinois Complaint
Illinois Proposed Consent Decree

 

Assistant Attorney General for the Tax Division Kathryn Keneally, U.S. Attorney for the District of Idaho Wendy J. Olson and the Internal Revenue Service (IRS) announced today that a Coeur d’Alene, Idaho, jury convicted Michael George Fitzpatrick, 51, of Hope, Idaho, of two counts of income tax evasion after a four-day trial before U.S. District Judge Larry A. Burns.  In September 2012, Fitzpatrick was tried on four tax fraud counts.  That jury rendered guilty verdicts on two counts of failure-to-file 2004 corporate income tax returns but was unable to reach verdicts on the tax evasion counts.  The verdict today was the result of a second trial on those two charges.  Fitzpatrick was remanded into custody immediately.

According to the indictment and evidence introduced at both trials, Fitzpatrick operated a business selling products which purported to help individuals eliminate credit card debt. During 2003 and 2004 the business’s gross sales exceeded $9 million, operating under the names Dynamic Solutions Inc. (DSI) and NAES.  The evidence proved Fitzpatrick last filed an individual income tax return in 1996.  At trial the government proved the corporations failed to report $3.7 million and Fitzpatrick himself failed to report over $500,000 in income, resulting in a total tax loss of almost $1.4 million.

The evidence at trial established that Fitzpatrick sent over $5 million offshore to WWIN, a “warehouse” bank located in the Dominican Republic.  Fitzpatrick accessed this money through the use of a debit card and through wire transfers.  During a two-year period, Fitzpatrick used his offshore funds to purchase his personal residence and two four-unit apartment buildings in northern Idaho, with a combined cost of over $700,000.  Fitzpatrick also wired $114,980 from his offshore bank accounts to the Bellagio Casino during nine trips to Las Vegas.

Sentencing is scheduled for May 13, 2013.  The maximum penalty Fitzpatrick faces on each count of tax evasion is five years in prison and a $250,000 fine.  The two convictions for failure to file corporate income tax returns each carry a maximum penalty of one year in prison and a $100,000 fine.

“Paying income tax is a solemn obligation of citizenship,” said Olson.  “Those who hide income and evade taxes by sending money off-shore, undermine our democracy.  This verdict sends a strong message that those who seek to avoid their tax responsibilities will be punished to the fullest extent of the law.”

“This verdict should send a clear message, it’s imperative for all Americans to pay their share of taxes and those who commit income tax evasion will be brought to justice,” said Stephen Boyd, IRS Criminal Investigation Special Agent in Charge for the State of Idaho.  

The case was investigated by special agents from the Boise, Idaho, office of IRS-Criminal Investigation and prosecuted by Tax Division Trial Attorneys Lori A. Hendrickson, Christopher P. O’Donnell and Erin S. Mellen, with valuable support from the U.S. Attorney’s Offices in Boise and Coeur d’Alene.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

 

Craig Billings, 39, a former deputy sheriff with the Murray County Sheriff’s Office in Sulphur, Okla., pleaded guilty today in federal court to a one-count information charging him with Deprivation of Rights for using unreasonable force and violating the civil rights of an individual who was being booked into the Murray County Jail.   

According to court documents, on Oct. 8, 2011, Billings, while working in his capacity as a deputy sheriff, physically assaulted the victim, who was handcuffed at the time and not a physical threat to anyone.  Billings tackled the victim to the ground, positioned himself over the victim, grabbed the victim by the chin and began to bang the victim’s head into the floor.  In so doing, Billings subjected the victim to unreasonable force, punishing him for verbally offending Billings.  As a result, the victim sustained a mild concussion and suffered pain and swelling to his head.  Billings knew that he was prohibited from using physical force on a restrained arrestee who is not a physical threat, and assaulted the victim anyway.  

“Every person in America has the right to be free from excessive physical force when they are taken into custody by law enforcement officers,” said Assistant Attorney General Thomas E. Perez of the Department of Justice’s Civil Rights Division.  “While the vast majority of officers uphold this right on a daily basis, the Department of Justice and the Civil Rights Division will vigorously prosecute officers who do not act in accordance with the Constitution.       

Billings was remanded into custody at the time of his guilty plea.  He faces a maximum sentence of 10 years in prison.  A sentencing date has not yet been set. 

This case was investigated by the Ardmore Resident Agency of the Oklahoma City Division of the FBI and is being prosecuted by Assistant U.S. Attorney Dean Burris for the Eastern District of Oklahoma and Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice.

WASHINGTON – A former Chicago police officer and two members of the Latin Kings street gang were sentenced this week in Indiana to serve prison time for their roles in a racketeering conspiracy and other related charges, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana.
 
Former Chicago Police Officer Alex Guerrero, 41, of Chicago, was sentenced today to serve 228 months in prison and five years of supervised release.  Antonio Gudino, aka “Chronic,” 31, of Hammond, Ind., was sentenced yesterday to serve 175 months in prison and two years of supervised release.  Brandon Clay, aka “Cheddar,” “Cheddar Boy,” “Swiss” and “Slick” 25, of Chicago, was sentenced Wednesday to serve 360 months in prison and five years of supervised release.  Guerrero, Gudino and Clay were each sentenced by U.S. District Judge Rudy Lozano in the Northern District of Indiana.

On Aug. 2, 2012, Guerrero pleaded guilty to one count each of conspiracy to participate in racketeering activity, conspiracy to possess with intent to distribute and distribute five kilograms or more of cocaine and 1,000 kilograms or more of marijuana, interference with commerce by threats or violence, and use and carrying of a firearm during and in relation to crimes of violence and drug trafficking.  On July 31, 2012, Gudino and Clay each pleaded guilty to one count of racketeering conspiracy.

According to the third superseding indictment filed in this case, the Latin Kings is a nationwide gang that originated in Chicago and has branched out throughout the United States.  The Latin Kings is a well organized street gang that has specific leadership and is composed of regions that include multiple chapters.  The third superseding indictment charges that the Latin Kings were responsible for at least 19 murders, including juveniles and one pregnant woman, in the Chicago/Northwest Indiana area and Big Spring, Texas.

According to the third superseding indictment, the Latin Kings enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault and threats against those who violate the rules or pose a threat to the Latin Kings.  Members are required to follow the orders of higher-ranking members, including taking on assignments often referred to as “missions.”
 
During their guilty plea proceedings, Guerrero, who was a Chicago Police Department officer, admitted to being associated with the Latin Kings, and Gudino and Clay admitted to being Latin King members from an early age.  They also acknowledged they were aware that the Latin Kings distributed more than 150 kilograms of cocaine and 1,000 kilograms of marijuana over the course of the racketeering conspiracy.  Guerrero admitted in his plea agreement that he was responsible for possession of and distribution of 150 kilograms or more of cocaine.  Gudino and Clay admitted to participating in street activities to further the drug trafficking and other gang activities.

Guerrero also admitted to participating in robberies at the direction of Latin Kings leader and co-conspirator Sisto Bernal.  Specifically, Guerrero acknowledged that in approximately December 2006, he entered into the Hammond residence of James Walsh, a rival gang member.  Guerrero and his police partner and co-defendant Antonio Martinez physically restrained Walsh and others while the home was searched and robbed.  Guerrero admitted that by committing these crimes while employed as a Chicago police officer, he abused a position of public trust in a manner that significantly facilitated the commission or concealment of the offense.  Bernal and Martinez previously pleaded guilty for their roles in the racketeering and robbery conspiracies.

Guerrero resigned from the Chicago Police Department following his plea hearing.

Clay acknowledged that on Feb. 25, 2007, he, along with four other defendants, rode on a “mission” from Illinois to Griffith, Ind.  While armed with three firearms, they were ordered to shoot to kill rival gang members who were attending a party.  Once the two rival members – James Walsh and Gonzalo Diaz – left the party, several Latin Kings members, including Clay, rode up in a vehicle, and Clay and another defendant got out of the vehicle and shot and killed Walsh and Diaz.  On April 22, 2009, Clay, along with two other defendants, drove to a rival gang neighborhood and caused the shooting death of Christiana Campos, a member of a rival gang.

Twenty-three Latin Kings members and associates have been indicted in this case.  Twenty have pleaded guilty; one was found guilty following a jury trial; one awaits trial; and one remains a fugitive. 
 
This case was investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; ICE Homeland Security Investigations; the National Gang Intelligence Center; the Chicago Police Department; the Houston Police Department; the Griffith Police Department; the Highland Police Department; the Hammond Police Department; and the East Chicago Police Department.

The case is being prosecuted by Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section and David J. Nozick of the U.S. Attorney’s Office for the Northern District of Indiana.  Assistant U.S. Attorney Andrew Porter of the U.S. Attorney’s Office for the Northern District of Illinois provided significant assistance.

The third superseding indictment is not evidence of guilt.  The defendants who have not been convicted are innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Today, U.S. District Court for the Eastern District of Louisiana entered an order granting the joint motion of the United States and the city of New Orleans to enter the consent decree regarding the New Orleans Police Department (NOPD). This order is a critical milestone in reforming the long-troubled NOPD and is an important step in dealing with the public safety crisis in New Orleans and in restoring community confidence in the New Orleans criminal justice system. The court’s order ensures critical changes to policy and practices, oversight by a federal monitor and transparency so that the community can continue to participate in and track the reform process. The order finalizes this binding agreement that was extensively negotiated between the department and the city, and allows for that agreement’s immediate implementation. The department and the city signed the agreement in July 2012.

 

“The Department of Justice appreciates the court’s careful attention to this matter,” said Thomas E. Perez, Assistant Attorney General for Civil Rights. “The court’s action today ensures that the people of New Orleans will have a police department that respects the Constitution, ensures public safety and earns the confidence of the community. This decree will provide the city with important tools to reduce crime, ensure effective, constitutional policing and restore public confidence in NOPD.”

 

As outlined in the court’s order, approval of the consent decree comes after thorough review of the consent decree to determine if it is fair, reasonable and adequate to address the long-standing constitutional deficiencies within NOPD. The review included hearing extensive testimony from the United States, the city, the Office of the Independent Police Monitor, the Fraternal Order of Police and the Police Association of New Orleans and many other New Orleans stakeholders and residents. The testimony reaffirmed both that NOPD engages in unconstitutional conduct, and that there is a public safety crisis in New Orleans that the NOPD can only address by implementing the reforms required by the decree.

 

The court’s approval of the consent decree comes at a time of continuing and serious public safety challenges in New Orleans.

 

“The deficiencies within NOPD that the Department of Justice identified during its extensive investigation continue to plague New Orleans,” said Assistant Attorney General Perez. “Time is of the essence. We look forward to the immediate implementation of the agreement, and stand ready to work with all stakeholders in New Orleans to continue the reform process.”

 

The department opened an investigation into NOPD in May 2010 after Mayor Landrieu asked for the department’s help with a complete transformation of NOPD. After a thorough investigation of NOPD’s policies and practices the department issued a letter of findings in March 2011 that outlined a pattern of unconstitutional conduct and violations of federal law that stemmed from entrenched practices within NOPD. These constitutional violations include use of excessive force; unconstitutional stops, searches and arrests, and; discriminatory and biased policing based on gender, race, national origin and sexual orientation.

 

“In his first days in office, Mayor Landrieu called for a comprehensive federal civil rights investigation of NOPD, and said that ‘nothing short of the complete transformation is necessary and essential to ensure safety for the citizens of New Orleans.’ This consent decree provides the roadmap for the complete transformation of NOPD,” said Assistant Attorney General Perez.

 

The court documents can be viewed at www.justice.gov/crt/about/spl/nopd.php.

Husband and wife John and Sandra Cote, both of Brooklyn, Conn., were arrested on tax charges, the Justice Department and Internal Revenue Service (IRS) announced today.  On Dec. 18, 2012, a federal grand jury in New Haven, Conn., returned an indictment charging the Cotes with conspiracy to defraud the IRS and four counts of tax evasion. Sandra Cote was arrested and appeared in court on Jan. 9, 2013, in Providence, R.I. John Cote was arrested Jan. 10, 2013, and his initial appearance in court took place today in Miami.

According to the indictment, the Cotes had not filed a timely or valid tax return since 1994, despite earning income from John Cote’s work as a consultant in the high technology welding industry.  The IRS assessed John Cote’s unpaid 1995-1996 taxes based on Forms 1099-MISC.  Per the indictment, the Cotes responded to IRS efforts to assess and collect taxes for these years by concealing income and assets from the government and by submitting obstructive letters and other documents, including fake financial instruments and false criminal complaints against IRS employees. For the years 1998-2009, the Cotes allegedly prevented the companies for which John Cote consulted from filing Forms 1099 bearing his Social Security Number with the IRS and caused these companies to pay his compensation to nominee bank accounts, including accounts in Costa Rica, Antigua and Sweden.  The Cotes also used a nominee entity called “Sandra Cote, Overseer of God's Battery Ministry, and Her Successors, a Corporation Sole (*an unincorporated Altruistic Spiritual Order)” to conceal income and assets from the IRS.  In 2003, Sandra Cote conveyed their personal residence to this entity.

 

An indictment merely alleges that crimes have been committed and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted on all counts, the Cotes face a maximum potential sentence of 25 years in prison and fines of up to $1,250,000.

This case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Melissa Siskind and Jeff McLellan of the Justice Department’s Tax Division are prosecuting the case.

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

WASHINGTON – Roland Kaufmann, CEO of Axius Inc., pleaded guilty today in Brooklyn for conspiring to bribe stock brokers, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Eastern District of New York Loretta E. Lynch. 

Kaufmann, 60, a Swiss citizen, pleaded guilty before U.S. District Judge John Gleeson in the Eastern District of New York to one count of conspiracy to violate the Travel Act.

“Roland Kaufmann conspired to bribe stock brokers and fleece investors in Axius stock,” said Assistant Attorney General Breuer.  “He took the crooked path, and now faces the prospect of years in prison.  Although he committed his crimes from outside the United States, U.S. authorities tracked him down and he has now been held to account.  This case shows our determination to prosecute all those who seek to corrupt U.S. securities markets.”

“Roland Kaufman sought to game the system with his scheme to bribe stockholders to help him artificially raise the price of his company’s stock,” said U.S. Attorney Lynch.  “He reached across the ocean to insert his deception into U.S. markets, thereby placing investors at risk.  We will continue to bring our resources to bear against anyone who would harm the integrity of United States capital markets for their own personal financial gain, even when those who try to exploit our investors are hatching their schemes from abroad.”  

“The flagrant market manipulation engaged in by Kaufmann was designed to make him rich,” said George Venizelos, Assistant Director in Charge, FBI New York Field Office.  “Absent the undercover agent, the scheme also would have made honest investors much poorer. The FBI is committed to policing the securities industry to prevent unjust enrichment for cheaters, victimization of honest investors, and the undermining of public confidence in market integrity.”

“This case demonstrates the value of a coordinated approach by law enforcement authorities,” said Richard Weber, Chief, Internal Revenue Service (IRS) Criminal Investigation.  “As a result of the collaborative effort in this investigation, investors were protected from further financial harm.  IRS Criminal Investigation is always ready to lend its financial investigative expertise to the investigation of complex and sophisticated financial crimes.”

Kaufmann admitted to conspiring with co-defendant Jean-Pierre Neuhaus, another Swiss citizen, to violate the Travel Act by bribing stock brokers.  Axius, which refers to itself as a “holding company and business incubator” that develops other businesses, is incorporated in Nevada, and its principal offices are in Dubai, United Arab Emirates.  As part of the scheme, Kaufmann and Neuhaus, while located overseas, enlisted the assistance of an individual they believed had access to a group of corrupt stock brokers; this individual was in fact an undercover law enforcement agent.  Kaufmann and Neuhaus believed that the undercover agent controlled a network of stockbrokers in the United States with discretionary authority to trade stocks on behalf of their clients.

According to court documents, Kaufmann and Neuhaus instructed the undercover agent to direct brokers to purchase Axius shares that were owned or controlled by Kaufmann in return for a secret kickback of approximately 26 to 28 percent of the sale price.  Kaufmann and Neuhaus instructed the undercover agent as to the price the brokers should pay for the stock, and Kaufmann specifically instructed the undercover agent, in Neuhaus’s presence, that the brokers would have to pay gradually higher prices for the shares they were buying.  Kaufmann and Neuhaus directed the undercover agent that the brokers were to refrain from selling the Axius shares they purchased on behalf of their clients for a one-year period.  By preventing sales of Axius stock, Kaufmann and Neuhaus intended to maintain the fraudulently inflated share price for Axius stock.  Kaufmann and Neuhaus agreed to sell approximately $3.5 million to $5 million worth of Axius shares through the undercover agent’s stock brokers.

Kaufmann and Neuhaus were arrested on March 8, 2012.  On Oct. 10, 2012, Neuhaus pleaded guilty to conspiracy to commit securities fraud and violate the Travel Act.

At sentencing, scheduled for May 17, 2013, Kaufmann faces a maximum penalty of five years in prison. As part of his plea agreement, Kaufmann agreed to forfeit $298,740 that victims lost as a result of the crime.

This case is being prosecuted by Trial Attorney Justin Goodyear of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ilene Jaroslaw of the Eastern District of New York.  The case was investigated by the FBI New York Field Office and the IRS New York Field Office.  The department also thanks the Securities and Exchange Commission for its assistance in this matter.

WASHINGTON – Three men, including two former officers with the Police of Puerto Rico, were convicted today by a federal jury in San Juan, Puerto Rico, for their roles in providing security for drug transactions, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodriguez-Velez of the District of Puerto Rico, and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Field Office.

Former Police of Puerto Rico Officers Daviel Salinas Acevedo, 29, of Bayamon, Puerto Rico, and Miguel Santiago Cordero, 30, of Lares, Puerto Rico, were each convicted of one count of conspiracy to possess with intent to distribute more than five kilograms of cocaine and one count of possession of a firearm in furtherance of a drug transaction.

Wendell Rivera Ruperto, 38, of Las Marias, Puerto Rico, was convicted of one count each of conspiracy to possess with intent to distribute more than five kilograms of cocaine, attempting to possess with the intent to distribute more than five kilograms of cocaine and possession of a firearm in furtherance of a drug transaction.  Rivera Ruperto had been convicted previously of 15 other counts arising from his participation in other, related drug transactions.
 
Salinas Acevedo, Santiago Cordero and Rivera Ruperto were charged in a superseding indictment returned in the District of Puerto Rico on Sept. 30, 2010, in addition to 87 other law enforcement officers and 43 other individuals, as part of the FBI undercover operation known as “Operation Guard Shack.”  To date, 131defendants have pleaded guilty or been convicted, and 119 defendants have been sentenced.  Today’s convictions were the last of the Guard Shack defendants to stand trial. 

According to the evidence presented in court, Salinas Acevedo, Rivera Ruperto and Santiago Cordero each provided security for what they believed were illegal cocaine deals that occurred on March 24, April 9 and July 8, 2010, respectively.  In fact, each purported drug transaction was one of dozens of simulated transactions conducted as part of the undercover FBI operation.  The three men performed armed security for the multi-kilogram cocaine deals by frisking the buyer (a confidential informant working for the FBI), standing guard as the kilos were counted, and inspecting and escorting the buyer in and out of the transaction.  In return for the security they provided, Salinas Acevedo, Santiago Cordero and Rivera Ruperto each received a cash payment of $2,000. 

In return for the security they provided, Salinas Acevedo, Santiago Cordero and Rivera Ruperto each received a cash payment of $2,000.  The money was never returned by any of the defendants, and none of the defendants ever reported the transactions.

Sentencing in the case will be scheduled by U.S. District Judge Carmen Consuelo Cerezo for later this year.  At sentencing, Salinas Acevedo and Santiago Cordero face mandatory minimum sentences of 15 years in prison and a maximum sentence of life in prison.  Rivera Ruperto is presently serving a sentence of 126 years and 10 months in prison for his prior convictions and faces a mandatory minimum sentence of 35 years in prison and a maximum penalty of life in prison for his convictions today.

The case was prosecuted by Trial Attorneys Anthony J. Phillips and Edward J. Loya Jr., of the Criminal Division’s Public Integrity Section.  The case was investigated by the FBI.  The Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Puerto Rico Department of Justice also provided assistance in this case.  The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.

 

Today, the Justice Department announced that it filed in federal court yesterday afternoon a comprehensive agreement that will resolve long running litigation with the state of Tennessee originally concerning conditions of care at the former Arlington Developmental Center (ADC).  On Jan. 15, 2013, the U.S. District Court in Memphis, Tenn., will conduct a hearing to determine whether to approve the agreement.  Individuals affected by the agreement are invited to attend the hearing and provide comment to the Court.  

Over the 20-year course of the litigation, the state has made significant changes in the delivery of services for a class comprised of former ADC residents and many other individuals who were deemed at-risk of placement at ADC.  Tennessee closed ADC in October 2010.  The new agreement reaches many of those in the group deemed at risk of placement in ADC prior to its closure. 

The agreement resolves remaining issues in the litigation by expanding community-based services so that the state can serve people with developmental disabilities, including intellectual disabilities, in their own homes, their families’ homes or other integrated community settings.  The agreement also will provide class members in nursing homes to choice to receive services in integrated, community-based settings.  Over the next year, Tennessee will expand community services by providing home and community-based Medicaid waivers to Medicaid-eligible individuals; seeking new and cost-efficient models of care for class members with behavioral needs; and providing supported employment for class members seeking work.  This expansion will provide people the opportunity to transition successfully from nursing and other facilities to community settings that can meet their needs and prevent new people from being unnecessarily institutionalized. 

“This agreement will provide remaining class members with developmental disabilities in western Tennessee the opportunity to live successfully in their homes and communities and bring this long-standing litigation to an appropriate end,” said Assistant Attorney General Thomas E. Perez.  “I commend Governor Haslam for his leadership on this issue, and we will continue to work with states around the country, as we have with Virginia, Georgia, Delaware, North Carolina, and – today – Tennessee, to ensure that people with disabilities are given the choice to live in community-based settings.”

“This is an example of the state of Tennessee making the choice to do what is not only legally right, but right in the grander sense,” said U.S. Attorney Edward L. Stanton III. “Protecting the civil rights of every citizen is a fundamental duty of our office and this agreement does so while preserving the dignity and improving the quality of life for some of our most vulnerable citizens.”

Upon the state’s successful completion of the agreement, the litigation is expected to come to an end.  In 1991, the department released a findings letter pursuant to the Civil Rights for Institutionalized Persons Act (CRIPA) detailing conditions at ADC that violated residents’ constitutional rights.  The following year the department brought suit to remedy those conditions.  The court joined that suit with a separate suit brought by People First of Tennessee concerning ADC and the rights of people at risk of institutionalization at ADC.  People First remains active in the case and also is a party to the agreement .               

Civil Rights Division staff Jonathan Smith, chief; Shelley Jackson, deputy chief; and senior trial attorneys Jonas Geissler and Michelle Jones, worked on the case and the agreement .

For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt .   If you have any comments or concerns specific to this matter, please feel free to contact the division at1-877-218-5228.

 

Related Materials:

ADC Agreement

WASHINGTON – The Department of Justice filed a civil antitrust lawsuit today against Bazaarvoice Inc. challenging the company’s June 2012 acquisition of PowerReviews Inc.  The department said that the $168.2 million transaction substantially lessened competition in the market for product ratings and reviews platforms in the United States, resulting in higher prices and diminished innovation. 

 

The department’s lawsuit, filed in the U.S. District Court in the Northern District of California, in San Francisco, seeks to restore the competition that was extinguished by the transaction.

 

Bazaarvoice’s acquisition of PowerReviews was not reported under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which requires companies to notify and provide information to the department and the Federal Trade Commission before consummating certain acquisitions.  The department began its investigation shortly after the transaction closed. 

 

“Bazaarvoice bought PowerReviews knowing that it was acquiring its most significant rival and hoping to benefit from diminished price competition,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Without competitive pressure from PowerReviews, Bazaarvoice will be able to increase prices to retailers and manufacturers for its product ratings and reviews platform. This lawsuit seeks to prevent one firm from dominating the product rating and review platforms market, and demonstrates that transactions that are not reported to us are not immune from scrutiny.” 

 

Consumer-generated product ratings and reviews are a ubiquitous part of the online shopping experience and are displayed on retailers’ and manufacturers’ websites.  This feature allows consumers to read feedback from authentic product owners before making a purchasing decision.  This content is also a valuable asset for retailers and manufacturers because it can increase sales, decrease product returns and provide valuable structured, product-level data about consumer preferences and behavior.  Retailers and manufacturers use product ratings and reviews platforms to collect, organize and display consumer-generated product ratings and reviews online. 

 

According to the department’s complaint, Bazaarvoice is the dominant commercial supplier of product ratings and reviews platforms in the United States, and PowerReviews was its closest rival.  Before the transaction, PowerReviews was an aggressive price competitor, and Bazaarvoice routinely responded to competitive pressure from PowerReviews.  As a result of the competition between Bazaarvoice and PowerReviews, many retailers and manufacturers received substantial price discounts, the department said. As the complaint describes, Bazaarvoice sought to stem competition through the acquisition of PowerReviews.  The complaint quotes internal company documents in which senior Bazaarvoice executives describe PowerReviews’s role in the market:   

 

• One of the company’s co-founders noted that the acquisition of PowerReviews would “[e]liminat[e] [Bazaarvoice’s] primary competitor” and provide “relief from [] price erosion;”

• The company’s current chief executive officer wrote that Bazaarvoice had “literally, no other competitors” beyond PowerReviews; and

• The  company’s former chief executive officer projected that, as a result of the transaction, Bazaarvoice would have “[n]o meaningful direct competitor.”

 

The department alleges that the acquisition of PowerReviews has given Bazaarvoice the incentive and ability to raise the price of its product ratings and reviews platform above a competitive level.  As a result of the transaction, many customers have lost critical negotiating leverage and are vulnerable to anticompetitive price increases.

 

Bazaarvoice is a Delaware corporation with its principal place of business in Austin, Texas. In its 2012 fiscal year, Bazaarvoice had revenues of approximately $106 million.

 

Before the transaction, PowerReviews was a Delaware corporation with its principal place of business in San Francisco. In the 2011 calendar year, PowerReviews had revenues of approximately $11.5 million.

WASHINGTON – The Department of Justice announced today that it has reached a settlement that will require the Oklahoma State Chiropractic Independent Physicians Association (OSCIPA) and its executive director to stop jointly determining prices and negotiating contracts with insurers on behalf of competing chiropractors in Oklahoma.  The department said that the association and executive director negotiated at least seven contracts with insurers that set prices for chiropractic services on behalf of OSCIPA’s members, and that their conduct caused consumers to pay higher fees for chiropractic services in Oklahoma.

 

The department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the Northern District of Oklahoma against OSCIPA and executive director, Larry M. Bridges.  At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the lawsuit.

 

“By jointly negotiating fees on behalf of competing chiropractors, the association and its executive director increased the prices that consumers paid for chiropractic services in Oklahoma,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Today’s settlement promotes competition among Oklahoma chiropractors and prevents the association and its executive director from engaging in illegal conduct that caused consumers to pay more for their health care.”

 

According to the complaint, OSCIPA–which is comprised of approximately 45 percent of all practicing chiropractors in Oklahoma–and Bridges collectively negotiated the rates and price-related terms for at least seven contracts with insurers on behalf of OSCIPA’s members and required members to suspend their pre-existing contracts with those same insurers.  The association and Bridges also required OSCIPA’s members to accept only reimbursements above a certain level and prohibited members from offering insurers incentives or rebates, such as by waiving deductibles.  Except for members who were part of the same practice groups, OSCIPA’s members were not clinically or financially integrated, and the association’s and Bridges’ actions were not necessary to achieve any benefits for consumers.

 

The proposed settlement will prevent the association and Bridges from establishing prices or terms for chiropractic services and from negotiating with insurers on behalf of competing chiropractors.  The proposed settlement also will prevent them from attempting to facilitate joint negotiations and from communicating with chiropractors about any aspect of pricing or contracting.

 

The Oklahoma State Chiropractic Independent Physicians Association is headquartered in Tulsa, Okla.  Bridges has been employed by OSCIPA as its executive director since at least 1999. 

 

The proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register as required by the Antitrust Procedures and Penalties Act.  Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Peter J. Mucchetti, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530.  At the conclusion of the 60-day comment period, the court may enter the final judgment upon finding that it serves the public interest.

WASHINGTON – Two men employed by a machine products vendor in Albany, Ga., have pleaded guilty to bribing a public official working for a military organization at the Marine Corps Logistics Base Albany (MCLB-Albany) to secure 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.

Thomas J. Cole Jr., 43, and Fredrick W. Simon, 55, both of Albany, each 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 their guilty pleas, Cole, the general manager of an Albany-based machine products vendor, and Simon, an employee responsible for processing sales orders, admitted to participating in a scheme to secure sales order contracts from the Maintenance Center Albany (MCA) at MCLB-Albany by subverting a competitive bid process.  The MCA is responsible for rebuilding and repairing ground combat and combat support equipment, much of which has been utilized in military missions in Afghanistan and Iraq, as well as other parts of the world.  To accomplish the scheme, Cole and Simon bribed a MCA purchase tech responsible for placing machine product orders.  Cole and Simon admitted to participating in the scheme at the purchase tech’s suggestion, after Simon had spoken with the purchase tech about how his company could obtain business from the MCA.  Cole and Simon admitted that, at the purchase tech’s request, they paid the purchase tech a bribe of at least $75 for each of the more than 1,000 sales orders MCA placed with their company.  According to court documents, the purchase tech would transmit sales bids to Simon and then communicate privately to him exactly how much money the company should bid for each particular order.  Cole and Simon admitted that these orders were extremely profitable, often times exceeding the fair market value of the machine products, sometimes by as much as 1,000 percent.

Cole and Simon further admitted that, at the purchase tech’s urging, in 2011 they 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.  They also admitted that the purchase tech increased the bribe required for orders as the scheme progressed.  Cole and Simon admitted to paying the purchase tech approximately $161,000 in bribes during the nearly two-year scheme.  Cole admitted to personally receiving approximately $209,000 in proceeds from the scheme; Simon admitted to personally receiving approximately $74,500.  Both admitted 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, Cole and Simon each face a maximum penalty of 15 years in prison and a fine of not more than twice the pecuniary loss to the government.  As part of their plea agreements with the United States, Cole and Simon both agreed to forfeit the proceeds they received from the scheme, as well as to pay full restitution to the Department of Defense.  Sentencing has not yet been scheduled.

The case is being prosecuted by Trial Attorneys Richard B. Evans and J.P. Cooney of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.  The 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 Defense Criminal Investigative Service.

WASHINGTON – An associate of the Barrio Azteca (BA), a trans-national border gang allied with the Juarez Cartel, was sentenced today to serve 18 months in prison, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Robert Pitman for the Western District of Texas, FBI Special Agent in Charge Mark Morgan of the FBI’s El Paso, Texas, Office and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA). 

April Cardoza, 24, was sentenced today by U.S. District Judge Kathleen Cardone in the Western District of Texas.  In addition to her prison term, Cardoza was sentenced to serve five years of supervised release.

On Oct. 18, 2012, Cardoza pleaded guilty to one count of conspiracy to commit racketeering offenses (RICO).

According to court documents and information presented in court throughout this case, the Barrio Azteca is a violent street and prison gang that began in the late 1980s and expanded into a transnational criminal organization.  In the 2000s, the BA formed an alliance in Mexico with “La Linea,” which is part of the Juarez Drug Cartel (also known as the Vincente Carrillo Fuentes Drug Cartel or “VCF”).  The purpose of the BA-La Linea alliance was to battle the Chapo Guzman Cartel and its allies for control of the drug trafficking routes through Juarez and Chihuahua.  The drug routes through Juarez, known as the Juarez Plaza, are important to drug trafficking organizations because they are a principal illicit drug trafficking conduit into the United States.   

According to court documents and information presented in court, Cardoza assisted the BA by providing communication to and from BA members, including BA Captain Manuel Cardoza, and facilitating money laundering. 

Cardoza and 34 other BA members and associates based in the United States and Mexico were charged in a 12-count third superseding indictment unsealed in March 2011.  The indictment contains charges related to various alleged criminal acts, including racketeering, narcotics distribution and importation, retaliation against persons providing information to U.S. law enforcement, extortion, money laundering, obstruction of justice and murder, including the 2010 Juarez consulate murders. 

Of the 35 defendants charged, 33 have been apprehended.  Twenty-five of those defendants, including Cardoza, have pleaded guilty.  One defendant committed suicide while imprisoned during his trial.  Another defendant was extradited from Mexico and is awaiting trial.  Six other defendants are pending extradition from Mexico.  U.S. and Mexican law enforcement are actively seeking to apprehend the two remaining fugitives in this case, including Luis Mendez and Eduardo Ravelo, an FBI Top Ten Most Wanted Fugitive.

 The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney John Gibson of the Western District of Texas, El Paso Division.  The U.S. Attorney’s Office for the District of New Mexico provided significant assistance in this case, including by Assistant U.S. Attorney Sarah Davenport.  Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations.

The case was investigated by the FBI’s El Paso Field Office, Albuquerque Field Office (Las Cruces Resident Agency), DEA Juarez and DEA El Paso.  Special assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, N.M., Sheriff’s Office; Las Cruces, N.M., Police Department; Southern New Mexico Correctional Facility; and Otero County Prison Facility New Mexico. 

Kenneth Jerome Blackmon Jr., a resident of Montgomery, Ala., pleaded guilty today to aggravated identity theft and access device fraud, the Justice Department and the Internal Revenue Service (IRS) announced today.

 

According to court documents, Blackmon was involved in a scheme to use stolen identities to file false federal income tax returns with the IRS. Blackmon admitted to acquiring identity information, to using that information on false tax returns, and to directing fraudulent tax refunds onto debit cards. He admitted to possessing at least fifteen Social Security numbers for the purpose of obtaining fraudulent tax refunds from the IRS.

 

Blackmon faces a maximum potential sentence of 10 years in prison for the access device fraud count and a mandatory two-year sentence for the aggravated identity theft count. He is also subject to fines and mandatory restitution.

 

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

 

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

WASHINGTON – Jeffery S. Adams, 41, of Hudgins, Va., and his corporation Adams Fishing Adventures Inc. pleaded guilty today to trafficking in illegally-harvested striped bass, in violation of the Lacey Act.  Among other things, the Lacey Act makes it unlawful for any person to import, export, transport, sell, receive, acquire or purchase any fish and wildlife taken, possessed, transported or sold in violation of any law or regulation of the United States, or to attempt to do so.  Under the Lacey Act, it is a “sale” of fish or wildlife for any person, for money or other consideration, to offer or provide guiding, outfitting, or other services.  

Ignacia S. Moreno, Assistant Attorney General for the U.S. Department of Justice’s Environment and Natural Resources Division, and Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, made the announcement after the plea was accepted by U.S. District Judge Mark S. Davis. 

Adams and Adams Fishing Adventures were indicted on Nov. 8, 2012, by a federal grand jury on charges of conspiracy, Lacey Act violations and false statements.  Adams faces a maximum penalty of five years in prison and a $250,000 fine, as well as forfeiture of the fishing vessel used during the commission of the crimes.  Adams Fishing Adventures Inc. faces a maximum fine of $500,000, as well as forfeiture of the fishing vessels used during the commission of the crimes.  Sentencing is set for April 18, 2013.

 In a statement of facts filed with his plea agreement, Adams and Adams Fishing Adventures admitted that they sold a charter striped bass fishing trip on Jan. 19, 2010, for $800.  As part of that charter fishing trip, Adams knowingly took his charter clients into the exclusive economic zone (EEZ) to harvest striped bass, even though Adams knew that it was a violation of federal law to harvest striped bass inside the EEZ.  Adams’ clients illegally harvested 10 striped bass within the EEZ on Jan. 19, 2010, and Adams then transported the illegally harvested striped bass back to Rudee Inlet in Virginia Beach, Va., where the sale of Adams’ charter fishing services was finalized. 

This case was investigated by the National Oceanic and Atmospheric Administration, Fisheries, Office for Law Enforcement, and the Virginia Marine Police with assistance from the Federal Communications Commission Enforcement Bureau, Norfolk, Va. Office.  Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section of the Environment and Natural Resources Division and Assistant U.S. Attorney Stephen W. Haynie from the Eastern District of Virginia are prosecuting the case on behalf of the United States.

 

Montell Williams, of Chicago, pleaded guilty today in Hammond, Ind., to violating the Mann Act by transporting a woman across state lines for the purpose of having her engage in prostitution.  Williams was indicted on Oct. 4, 2012 and indicted on additional charges on Dec. 13, 2012.

 

According to court documents, Williams admitted that on several occasions between June 2011 and Feb. 5, 2012, Williams drove an adult woman across state lines from Indiana to Illinois so that she could engage in prostitution. 

 

Williams faces up to 10 years in prison.  Sentencing has been set for April 25, 2013, before U.S. District Judge Rudy Lozano.

 

“The guilty plea of Mr. Williams brings justice to the young woman who fell victim to his scheme and was led into prostitution at his hands,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “We are committed to combating human trafficking and prosecuting those who sexually exploit vulnerable women for financial benefit.”

 

"The FBI is the lead agency for investigating violations of federal civil rights and human trafficking is one of our top civil rights violation priorities.  Through partnerships with our local, state, federal and international law enforcement partners, we investigate human trafficking and sexual exploitation.  Our goal is to ensure the safety of victims and that those involved in this systematic abuse and degradation are brought to justice,” said Special Agent in Charge Robert A. Jones, FBI Indianapolis.

 

The case was investigated by the FBI and the Gary Police Department.  The case is being prosecuted by Assistant U.S. Attorney Jill Koster, Civil Rights Division Special Litigation Counsel John Richmond, and Civil Rights Division Trial Attorney Amanda Gregory.

 

A Canadian citizen was sentenced to four years in prison today for his role in a scheme to defraud consumers purchasing pharmaceuticals online, the Justice Department announced.  Andrew J. Strempler was also ordered to pay a forfeiture of $300,000 and a fine of $25,000.  A restitution hearing was set for February 26, 2013.

 

In October 2012, Strempler pleaded guilty to conspiracy to commit mail fraud in connection with his role as owner and president of Mediplan Health Consulting Inc., a Canadian company that also operated under the name RxNorth.com.  RxNorth was an Internet, mail and telephone order pharmacy, through which Strempler and others marketed and sold prescription drugs to residents of the United States. 

 

According to court documents, the Food and Drug Administration (FDA) advised Strempler in a 2001 letter that his prescription drug sales would be illegal in the United States if the drugs were not FDA approved. The FDA letter explained that the FDA approves drugs based on evidence that they are safe and effective, and that the quality of drugs from foreign sources could not be assured.

 

Strempler and his co-conspirators unlawfully enriched themselves by selling prescription drugs to individuals in the United States, falsely representing that RxNorth was selling safe prescription drugs in compliance with regulations in Canada, the United Kingdom and the United States.  Strempler obtained the prescription drugs from various other source countries without properly ensuring the safety or authenticity of the drugs. In fact, some of the drugs sold by Strempler included counterfeit drugs.

 

Strempler caused prescription drugs from foreign countries to be shipped to a facility that Strempler operated in the Bahamas.  Prescription orders made through RxNorth were then filled at the Bahamas facility, with labels on the vials and drug cartons stating they had been filled by RxNorth in Canada.  Strempler then used indirect routes involving multiple countries to ship packages with prescription drugs from the Bahamas to individuals in the United States.  Shipments mailed from the Bahamas, containing packages addressed to individuals in the Southern District of Florida, included counterfeit prescription drugs.

 

“Internet websites that illegally sell potentially substandard, counterfeit or otherwise unsafe pharmaceuticals, pose a real threat to consumers,” said Principal Deputy Assistant Attorney General Stuart F. Delery.  “The sentence handed down today serves as an effective deterrent to those who would peddle counterfeit pharmaceuticals—particularly those drugs trafficked over the Internet.”

 

U.S. Attorney Wifredo A. Ferrer stated, “Counterfeit prescription drugs sold  through the internet pose a serious health hazard to consumers in the United States.  These drugs can be adulterated, ineffective and unsafe. The U.S. Attorney’s Office is committed to assisting the FDA enforce regulations to protect American consumers from these unsafe drugs.” 

 

“FDA’s Office of Criminal Investigations, working in concert with the United States Attorney’s Office and other foreign and domestic government agencies, will protect the public health by aggressively targeting those responsible for counterfeiting prescription drugs,” said David W. Bourne, Special Agent in Charge of the FDA Office of Criminal Investigations Miami Field Office.  “This case highlights that even when complex criminal networks engage in such illegal activities on a global scale from a foreign-based location, without regard for risk to human life, they are still held accountable for their actions in the United States.  We commend the United States Attorney’s Office in Miami and our international law enforcement partners for their tireless efforts in connection with the investigation and subsequent prosecution of this case.”

 

U.S. District Judge Jose E. Martinez presided over the sentencing. 

 

This case was prosecuted by Assistant U.S. Attorney Ana Maria Martinez of the U.S. Attorney’s Office for the Southern District of Florida, Roger J. Gural of the Justice Department’s Consumer Protection Branch, and Nathan Sabel of the Food and Drug Administration, Office of Chief Counsel.  The case was investigated by the FDA Office of Criminal Investigations.

 

To learn more about safely buying medicines over the Internet, consumers should consult FDA’s BeSafeRX campaign at http://www.fda.gov/Drugs/ResourcesForYou/Consumers/BuyingUsingMedicineSafely/BuyingMedicinesOvertheInternet/default.htm.

Mary Estelle Curran of Palm Beach, Fla., pleaded guilty today in the U.S. District Court for the Southern District of Florida to filing false tax returns for tax years 2006 and 2007, the Justice Department and Internal Revenue Service, Criminal Investigation (IRS-CI) announced.

 

According to court documents, Curran, a U.S. citizen, maintained undeclared bank accounts at UBS AG in Switzerland and a bank in Liechtenstein, which she inherited from her husband in 2000. The accounts at UBS AG were held in the names of nominee foreign entities, including the Flognet Foundation and Norega Investment. The account earned income each year, which Curran failed to report on her 2001 through 2007 individual income tax returns.

 

According to the plea agreement, Curran’s conduct caused a tax loss to the government of approximately $667,716. The value of all undeclared foreign financial accounts owned or controlled by Curran exceeded $42 million in 2007. In order to resolve her civil liability for failure to report her foreign bank accounts, Curran has agreed to pay a civil penalty in the amount of 50 percent of the high balance of the accounts, which is $21,666,929.

 

“The Justice Department continues to pursue those who hide income and assets from the IRS through the use of nominee businesses and offshore bank accounts,” said Assistant Attorney General Keneally. “U.S. taxpayers who fail to come forward in the voluntary disclosure program risk prosecution and substantial fines, as this case demonstrates.”

 

“U.S. citizens who seek to avoid their tax obligations by hiding income in undeclared bank accounts abroad should by now be fully on notice that they will be held accountable for their actions, both civilly and criminally,” said U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer. “The U.S. Attorney’s Office is committed to helping the IRS enforce our nation’s tax laws.”

 

“Offshore accounts can no longer be used to hide from the IRS and avoid paying the fair amount of tax,” said Richard Weber, Chief, IRS Criminal Investigation.  “IRS Criminal Investigation is aggressively pursuing tax cheats – both domestically and internationally.  We owe it to every American taxpayer to use all lawful means to identify and prosecute both those who evade their taxes and those who assist them in evading their tax obligations.”

 

Curran faces a potential maximum prison term of six years. A sentencing date has not been set.

 

Assistant Attorney General Keneally and U.S. Attorney Ferrer thanked Special Agents of IRS - CI, who investigated the case, and Tax Division Senior Litigation Counsel Mark F. Daly and Trial Attorney Michelle M. Petersen and Assistant U.S. Attorney Thomas P. Lanigan, who prosecuted the case.

Demetrio Juan Gonzales, 40, a former corrections officer at the Bernalillo County Metropolitan Detention Center (MDC) in Albuquerque, N.M., was sentenced today in federal court to 33 months in prison followed by three years of supervised released for violating the civil rights of an individual in his custody when he struck and choked the victim in the shower room/dress out area of MDC. Gonzales pleaded guilty in October 2012.

 

According to court documents, during the early morning hours of Dec. 21, 2011, Gonzales was assigned to the Receiving-Discharge-Transfer (RDT) Unit at MDC where individuals are brought to be booked soon after they are arrested. Gonzales’ job was to photograph and fingerprint those who are brought to RDT for booking. The victim, who had been arrested for driving while intoxicated, was verbally uncooperative during the booking process, but was not a physical threat to anyone. Nonetheless, Gonzales became angry at the victim and walked him to the shower room/dress out area where he knew there were no surveillance cameras. Several other corrections officers followed Gonzales to the shower room/dress out area. There, Gonzales physically assaulted the victim, striking him multiple times, and choking him. As a result of Gonzales’ actions, the victim started bleeding. Gonzales acknowledged that the victim did nothing to justify the beating, and as a corrections officer, he was not permitted to assault inmates just because they angered him.

 

“Corrections officers who abuse their authority by physically assaulting prisoners undermine the foundations of the rule of law and violate basic constitutional guarantees that protect every person in America,” said Assistant Attorney General Thomas E. Perez of the Department of Justice’s Civil Rights Division. “The Department of Justice and the Civil Rights Division will continue to aggressively prosecute civil rights violations that occur in our jails and prisons.”

 

“We depend on the guards in our prison system not only to do an important job, but also to carry out their duties in a way that respects their positions of authority, the law and ultimately the population they supervise,” said Kenneth J. Gonzales, U.S. Attorney for the District of New Mexico.  “Abuses of authority, under any circumstances, have no place in our prison system and will not be tolerated.”

 

“Our citizens have the right to expect their corrections officers to act legally and in accordance with the Constitution,” said Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI.  “We hope today's sentencing serves as a reminder to all public servants that nobody is above the law.  The Albuquerque FBI Division will continue to work with our law enforcement partners to vigorously investigate all allegations of civil rights violations.   I want to thank the U.S. Attorney's Office and the Department of Justice Civil Rights Division for their support in this case.  I also want to acknowledge the assistance given to the FBI by the Metropolitan Detention Center's executive management and internal affairs staff and the Bernalillo County Sheriff's Office.”

 

Fellow former MDC corrections officers Kevin Casaus, 24, and Matthew Pendley, 26, were indicted by a federal grand jury in June 2012, and are awaiting trial on charges related to this assault. Casaus is charged with violating the victim’s civil right rights when he allegedly 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 Bernalillo County Sheriff’s Office (BCSO) and then for falsifying his incident report. Similarly, Matthew Pendley is also charged with obstruction of justice for making false statements to BCSO detectives, and also for tampering with evidence by cleaning up blood from the shower room/dress out area. Casaus and Pendley are 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  – A federal inmate formerly held in Pennsylvania's Allenwood Federal Correctional Complex pleaded guilty today in Harrisburg, Pa., before U.S. District Judge Yvette Kane, to first degree murder for stabbing and kicking a fellow inmate to death.

 

Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division and U.S. Attorney for the Middle District of Pennsylvania Peter J. Smith announced the plea, entered today by Shawn Cooya, 33, formerly of White River, Ariz.

 

According to documents filed in this case and Cooya's admissions in court, in September 2005, Cooya, allegedly along with co-defendant Ritz Williams – another inmate at Allenwood in White Deer, Pa. – aided each other in the premeditated murder of inmate Alvin Allery by repeatedly stabbing him with a homemade knife and repeatedly kicking him in the head and torso.            

 

Cooya and Williams were indicted by a federal grand jury in Williamsport in February 2008 and a superseding indictment was returned in July 2009.

 

As a result of his plea, Cooya faces a mandatory sentence of life in prison.  Sentencing has been scheduled for March 18, 2013.

 

A trial date for Williams has been scheduled for April 15, 2013.  He is considered innocent unless and until proven guilty.

 

The case was investigated by the FBI, Williamsport, Pa., Resident Agency and the Federal Bureau of Prisons.  The case is being prosecuted by Assistant U.S. Attorneys Wayne Samuelson and Michelle Olshefski of the Middle District of Pennsylvania and Michael Warbel of the Criminal Division's Capital Case Unit.

 

A Massachusetts man was sentenced today to serve 45 years in prison for his participation in an international criminal network, known as Dreamboard, dedicated to the sexual abuse of children and the creation and dissemination of graphic images and videos of child sexual abuse throughout the world, announced Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division, U.S. Attorney Stephanie Finley of the Western District of Louisiana and Raymond R. Parmer, Special Agent In Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in New Orleans.

David Ettlinger, aka ee1, 35, of Newton, Mass., was sentenced by U.S. District Judge Maurice Hicks in the Western District of Louisiana.  In addition to his prison term, Ettlinger was sentenced to lifetime supervised release.

David Ettlinger will spend 45 years in prison for his role in a horrific international conspiracy to sexually exploit young children, said Assistant Attorney General Breuer.  Ettlinger participated in a criminal online community that encouraged members to regularly produce content depicting extreme sexual abuse of children.  The members of Dreamboard attempted to evade law enforcement by disguising their locations, but today's sentencing is a strong reminder that the department is dedicated to working with its law enforcement partners to track down child predators who seek to take advantage of our most vulnerable citizens.

U.S. Attorney Finley said, sexual abuse is a growing problem around the world, and it has devastating consequences for the victimized children.  Child pornography on the internet is another growing problem.  In addition to the abuse these children suffer, images of the abuse circulate worldwide across the internet for many years, repeating the abuse.  Children should not be victims.  This sentence sends a strong message to people who abuse children that they will pay a heavy price for their actions.  My office, along with our federal, state and local partners, remains committed to protecting children by aggressively pursuing, prosecuting and punishing those who seek to exploit them.

The sexual abuse of an innocent child by a teacher is one of the most heartbreaking violations of trust imaginable, said HSI New Orleans Special Agent in Charge Parmer.  Investigating and prosecuting the perpetrators of these horrendous crimes is one of our highest priorities and today's sentencing ensures this predator will never again have the opportunity to harm another child.

On Aug. 15, 2012, Ettlinger pleaded guilty to one count of engaging in a child exploitation enterprise.  Evidence presented in court documents and at sentencing revealed that Ettlinger, a former elementary school teacher in Newton, Mass., had been an active member of Dreamboard, an online child pornography bulletin board, since 2009. 

Ettlinger was charged in an indictment unsealed on Aug. 3, 2011.  The charges against Ettlinger are the result of Operation Delego, an ongoing investigation launched in December 2009 that targeted individuals around the world for their participation in Dreamboard.  Dreamboard was a private, members-only, online bulletin board that was created and operated to promote pedophilia and encourage the sexual abuse of very young children, in an environment designed to avoid law enforcement detection. 

A total of 72 individuals, including Ettlinger, have been charged as a result of Operation Delego.  To date, 57 of the 72 charged defendants have been arrested in the United States and abroad.  Forty-five individuals have pleaded guilty, and one was convicted after trial.  Forty-two of the 45 individuals who have pleaded guilty for their roles in the conspiracy have been sentenced to prison and have received sentences ranging between 10 years and life in prison.  Fifteen of the 72 charged individuals remain at large and are known only by their online identities.  Efforts to identify and apprehend these individuals continue.  Operation Delego represents the largest prosecution to date in the United States of individuals who participated in an online bulletin board conceived and operated for the sole purpose of promoting child sexual abuse, disseminating child pornography and evading law enforcement.

Ettlinger and other Dreamboard members traded graphic images and videos of adults molesting children 12 years-old and under, often violently, and collectively created a massive private library of images of child sexual abuse.  The international group prized and encouraged the creation of new images and videos of child sexual abuse.

Dreamboard members employed a variety of measures designed to conceal their criminal activity from detection by law enforcement.  Members communicated using aliases or 'screen names, rather than their actual names.  Links to child pornography posted on Dreamboard were required to be encrypted with a password that was shared only with other members.  Members accessed the board via proxy servers, which routed internet traffic through other computers so as to disguise a user's actual location and prevent law enforcement from tracing internet activity.  Dreamboard members also encouraged the use of encryption programs on their computers, which password-protect computer files to prevent law enforcement from accessing them in the event of a court-authorized search.

Membership was tightly controlled by the administrators of the bulletin board, who required prospective members to upload child pornography portraying children 12 years of age or younger when applying for membership.  Once they were given access, members were required continually to upload images of child sexual abuse in order to maintain membership.  Members who failed to follow this rule would be expelled from the group.

Operation Delego involved extensive international cooperation to identify and apprehend Dreamboard members abroad.  Through coordination between ICE; the Department of Justice; Eurojust, the European Union's Judicial Cooperation Unit; and dozens of law enforcement agencies throughout the world, 20 Dreamboard members across five continents and 14 countries have been arrested to date outside the United States, including two of the five lead administrators of the board.  Those countries include Canada, Denmark, Ecuador, France, Germany, Guatemala, Hungary, Kenya, the Netherlands, the Philippines, Qatar, Serbia, Sweden and Switzerland.  Numerous foreign investigations related to Operation Delego remain ongoing.  The location and arrest of Dreamboard members abroad have led to the capture and investigation of other global targets.

Evidence obtained during the operation revealed that at least 38 children across the world were suffering sexual abuse at the hands of the members of the group.  Efforts by federal, state, local and international law enforcement to locate and identify the victims of sexual abuse and exploitation by Dreamboard members are ongoing.

Operation Delego is a spinoff investigation from leads developed through Operation Nest Egg, the prosecution of another online group dedicated to the sharing and dissemination of child pornography.  Operation Nest Egg was a spinoff investigation developed from leads related to another international investigation, Operation Joint Hammer, which targeted transnational rings of child pornography trafficking. 

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

The case is being prosecuted by Assistant U.S. Attorney John Luke Walker of the Western District of Louisiana and Trial Attorney Keith Becker of CEOS.  The Criminal Division's Office of International Affairs provided substantial assistance.  The investigation was conducted by ICE-Homeland Security Investigations, the Child Exploitation Section of ICE's Cyber Crime Center, CEOS, CEOS's High Technology Investigative Unit and 35 ICE offices in the United States and 11 ICE attaches offices in 13 countries around the world, with assistance provided by numerous local and international law enforcement agencies across the United States and throughout the world.

The investigation was part of Operation Predator, a nationwide ICE initiative to identify, investigate and arrest those who prey on children, including human traffickers, international sex tourists, Internet pornographers and foreign-national predators whose crimes make them deportable.

ICE encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE.  This hotline is staffed around the clock by investigators.

WASHINGTON – The Detroit doctor at the center of a $13.2 million psychotherapy fraud scheme, which used the Medicare information of mentally-disabled Detroit residents to defraud Medicare, pleaded guilty today for his role in the scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Chicago Regional Office.

Dr. Alphonso Berry, 51, of Orchard Lake, Mich., pleaded guilty before U.S. District Judge Stephen J. Murphy III in the Eastern District of Michigan to one count of conspiracy to commit health care fraud and five counts of health care fraud.  Marcus Jenkins and Beth Jenkins , Dr. Berry’s co-conspirators in the scheme, pleaded guilty on Jan. 7 and Jan. 3, 2012, respectively, to the same charges for their roles in the scheme.

Dr. Berry admitted that he and others conspired to defraud Medicare through Quality Recreation & Rehabilitation LLC (QRR) and Procare Rehabilitation Inc. (Procare), two Detroit adult day care centers.  Dr. Berry admitted that he created a Medicare provider number for these businesses to allow them to bill Medicare for psychotherapy in his name.  According to court documents, the Medicare recipients at QRR and Procare were severely mentally-disabled residents of Detroit adult foster care homes.  Dr. Berry admitted that, although he did not provide any psychotherapy to these patients at QRR and Procare, he signed psychotherapy progress notes that were used at these companies to submit psychotherapy claims to Medicare, including claims that he provided psychotherapy to a dead person.

Court documents allege that Dr. Berry and his co-conspirators used Dr. Berry’s Medicare number to submit more than 116,000 psychotherapy claims in his name, amounting to more than $8.2 million.  From 2004 through 2011, QRR and Procare submitted more than 185,000 claims to Medicare totaling more than $13.2 million for group and individual psychotherapy that was not provided.  According to court documents, Medicare paid $4,777,792 on these claims.

At sentencing, scheduled for April 26, 2013, Dr. Berry faces a maximum penalty of 60 years in prison and a $1,500,000 fine.

This case is being prosecuted by William G. Kanellis and Tarek Helou of the Criminal Division’s Fraud Section.  It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

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.

Attorney General Eric Holder announced today the appointment of U.S. Attorney for the Eastern District of New York Loretta E. Lynch as chair of the Attorney General’s Advisory Committee of U.S. Attorneys (AGAC). Attorney General Holder also appointed U.S. Attorney for the Northern District of Georgia Sally Quillian Yates to serve as vice chair. Both appointments became effective Jan. 1, 2013.

 

“I’m confident that U.S. Attorneys Lynch and Yates have the expertise and dedication to lead this critical group in a challenging time, as we work to fulfill the department’s commitment to protecting the American people,” said Attorney General Holder. “I’m deeply grateful for their service and leadership – and look forward to continuing to work closely with all 94 of our United States Attorneys.”

 

U.S. Attorney Lynch was appointed to the AGAC in May 2010 and has served as vice chair since 2011. She replaces U.S. Attorney for the District of New Jersey Paul J. Fishman. U.S. Attorney Lynch has also served as the chair for the Advisory Committee’s Office, Management and Budget Subcommittee.  

 

U.S. Attorney Yates was appointed to the AGAC in May 2010 and has served on several subcommittees including Civil Rights, White Collar Fraud, and Criminal Practice and Law Enforcement Coordination/Victim/Community Issues.

        

Attorney General Holder also thanked U.S. Attorney Fishman for serving as chair of the AGAC for the past two years. “U.S. Attorney Fishman’s leadership, vision and unselfish dedication have brought the U.S. Attorney community together to address a myriad of law enforcement issues. His guidance and sage counsel have been invaluable to department leadership as we work together to enforce the laws of this nation.” 

 

The AGAC was created in 1973 to serve as the voice of the U.S. Attorneys and to advise the attorney general on policy, management and operational issues impacting the offices of the U.S. Attorneys.

WASHINGTON – A Romanian national was sentenced today to serve 21 months in prison for his role in an international, multimillion-dollar scheme to remotely hack into and steal payment card data from hundreds of U.S. merchants’ computers, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the District of New Hampshire John P. Kacavas; and Holly Fraumeni, Resident Agent in Charge of the U.S. Secret Service (USSS), Manchester, N.H., Resident Office.

Cezar Butu, 27, of Ploiesti, Romania, was sentenced by Judge Steven J. McAuliffe in U.S. District Court in New Hampshire.

On Sept. 17, 2012, Butu pleaded guilty to one count of conspiracy to commit access device fraud.  

In his guilty plea, Butu admitted that, from approximately 2009-2011, he  participated in a Romanian-based conspiracy to hack into hundreds of U.S.-based computers to steal credit, debit and payment account numbers and associated data (collectively “payment card data”) that belonged to U.S. cardholders.  According to court documents, Butu and his co-conspirators used the stolen payment card data to make unauthorized charges on, and/or transfers of funds from, cardholders’ accounts (or alternatively to transfer the stolen payment card data to other co-conspirators who would do the same).  Butu admitted that he repeatedly asked an alleged co-conspirator to provide him with stolen payment card data and that the alleged co-conspirator provided him with instructions for how to access a website where a portion of the stolen payment card data was stored.  Butu later attempted to use the stolen payment card data to make unauthorized charges on, or transfers of funds from, the accounts.  According to Butu’s plea agreement, he also attempted to sell, or otherwise transfer, the stolen payment card data to other co-conspirators for them to use in a similar manner.  Butu admitted to acquiring stolen payment card data belonging to approximately 140 cardholders during the course of the scheme.

In his plea agreement, Butu agreed to be sentenced to 21 months in prison. 

Butu’s co-conspirator Iulian Dolan pleaded guilty to one count of conspiracy to commit computer fraud and two counts of conspiracy to commit access device fraud, and has agreed to be sentenced to seven years in prison. Dolan’s sentencing hearing is scheduled for April 4, 2013.

Alleged co-conspirator Adrian-Tiberiu Oprea is scheduled for trial on Feb. 20, 2013, in U.S. District Court in New Hampshire.
 
The case was investigated by the USSS, with the assistance of the New Hampshire State Police and the Romanian Directorate of Investigation of Organized Crime and Terrorism.

The case is being prosecuted by Trial Attorney Mona Sedky in the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Arnold H. Huftalen from the District of New Hampshire. 

WASHINGTON – The owner of several Detroit-area businesses that housed severely mentally-disabled Medicare recipients pleaded guilty today for his role in a $13.2 million fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Chicago Regional Office.

Marcus Jenkins, 51, of Farmington Hills, Mich., pleaded guilty before U.S. District Judge Stephen J. Murphy III in the Eastern District of Michigan to one count of conspiracy to commit health care fraud and five counts of health care fraud.  Jenkins’s wife, Beth Jenkins, pleaded guilty to the same charges on Jan. 3, 2013, for her involvement in the scheme.

 Marcus Jenkins admitted that he and others conspired to defraud Medicare through Quality Recreation & Rehabilitation LLC (QRR) and Procare Rehabilitation Inc., two adult day care centers he owned and operated with Beth Jenkins.  According to court documents, Jenkins also owned and operated several Detroit-area adult foster care homes (AFCs) that housed severely mentally-disabled Medicare recipients.  Court documents allege that Jenkins used the Medicare information of more than 100 Detroit-area AFC residents to bill Medicare through QRR and Procare for individual and group psychotherapy.  Jenkins admitted that he caused claims to be submitted to Medicare for psychotherapy services that were not provided, including claims for psychotherapy purportedly given to a patient who was deceased on the dates of claimed service.

 From 2004 through 2011, Marcus Jenkins, Beth Jenkins and alleged co-conspirators submitted more than 185,000 claims to Medicare totaling more than $13.2 million for group and individual psychotherapy that was not provided.  According to court documents, Medicare paid $4,777,792 on these claims.

At sentencing, scheduled for April 19, 2013, Jenkins faces a maximum penalty of 60 years in prison and a $1.5 million fine.

Jenkins’s co-defendant Dr. Alphonso Berry, is scheduled for trial on Jan. 8, 2013.  He is presumed innocent until proven guilty at trial.

This case is being prosecuted by William G. Kanellis and Tarek Helou of the Criminal Division’s Fraud Section.  It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

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.

Jack Ray Carr, of Baton Rouge, La., was sentenced today to 78 months in federal prison for one count of corruptly interfering with the due administration of the Internal Revenue laws, four counts of filing false income tax returns and one count of aiding and assisting in the preparation of a false income tax return, the Justice Department, Internal Revenue Service (IRS) and Treasury Inspector General for Tax Administration (TIGTA) announced. Additionally, Carr was sentenced to one year of supervised release.

On June 20, 2012, following a three-day jury trial in the Middle District of Louisiana, Carr was convicted on all six counts. The evidence at trial established that Carr, a home inspector, threatened violence against a federal agent, filed false documents and tax returns with the IRS, and attempted to pay his tax debt with fraudulent bonds, fictitious money orders and a fake check. On three successive personal income tax returns, Carr falsely reported that his and his wife’s income was “$0.00,” despite earning hundreds of thousands of dollars in total during the 2001, 2002 and 2003 tax years. In 2009, on two tax returns, Carr falsely reported more than $100,000 of federal income tax withholdings based on fictitious IRS Forms 1099-OID attached to the tax returns that Carr filed in his own name and in the name of his wife. In doing so, Carr claimed more than $150,000 of fraudulent tax refunds from the U.S. government.

Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked the special agents of IRS - Criminal Investigation and TIGTA, who investigated this case. Assistant Attorney General Keneally also thanked Tax Division Trial Attorneys Justin Gelfand and Jason Poole who prosecuted this case.

The Justice Department announced today that it will monitor the municipal special election on Jan. 8, 2013, in Branchville, S.C., to ensure compliance with the Voting Rights Act of 1965.  The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. 

 

Justice Department personnel will monitor polling place activities in Branchville.  A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.

 

Each year, the Justice Department deploys hundreds of federal observers from Office of Personnel Management, as well as departmental staff, to monitor elections across the country.  To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

 

Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.

The Justice Department announced today that it reached an agreement with Centerplate Inc., resolving allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA). Centerplate, based in Spartanburg, S.C., is one of the largest hospitality companies in the world. With over 10,000 employees nationwide, Centerplate provides food service to over 250 stadiums, convention centers and entertainment venues across the country.

 

The Justice Department’s investigation was initiated based on a referral from the U.S. Citizenship and Immigration Services (USCIS) under a memorandum of agreement between the Civil Rights Division and USCIS. The department’s investigation concluded that, for at least the past three years, Centerplate engaged in a pattern or practice of treating work-eligible non-U.S. citizens differently from U.S. citizens during the INA’s employment eligibility verification processes, including E-Verify, by requiring specific documents issued by the Department of Homeland Security from non-U.S. citizens, while not making similar requests of U.S. citizens.

 

Under the terms of the agreement, Centerplate has agreed to pay $250,000 in civil penalties, the third highest amount paid through settlement since enactment of the INA’s anti-discrimination provision in 1986. Centerplate has also agreed to fully compensate any victims who lost wages as a result of Centerplate’s practices, undergo Justice Department training on the anti-discrimination provision of the INA, and be subject to monitoring of its employment eligibility verification practices for a period of three years. The case settled prior to the Justice Department filing a complaint in this matter.

 

“Work-eligible applicants – citizens and non-citizens alike – deserve fair and equal treatment in the eligibility verification process,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “Therefore, we will continue to vigorously enforce the anti-discrimination provision of the INA.”

 

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 .

The United States Justice Department and U.S. Attorney Wendy J. Olson announced today the filing of a complaint alleging that the Jerome County Sheriff’s Office willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to reemploy and terminating Idaho Army National Guard Member Mervin Jones while he was recuperating from a knee injury that he sustained while performing military service. The suit was filed in federal district court in Idaho.

Subject to certain limitations, USERRA requires that service members who leave their civilian jobs to serve in the military be reemployed promptly by their civilian employers in the positions they would have held if their employment had not been interrupted by military service or in positions of comparable seniority, pay, and status. In addition, USERRA requires employers to accommodate service members who are injured in the line of duty, and allows service members who are recuperating from such an injury up to two years to obtain reemployment without facing termination by their civilian employers.

The complaint states that Jones began working for the Jerome County Sheriff’s Office as a correctional deputy in 2002. By 2007, he had been promoted through the ranks to Corporal. During his employment with the Sheriff’s Office, Jones was also a member of the Idaho Army National Guard. He suffered a knee injury while deployed to Iraq in 2004, which Jones later aggravated in 2008 during a weekend training event with his Guard unit. The complaint alleges that in 2009, while Jones was still recuperating from multiple knee surgeries, the Sheriff’s Office forced him to complete Family Medical Leave Act (FMLA) paperwork even though his leave was protected under USERRA, denied him light duty work to accommodate his physical limitations caused by the knee injury, attempted to subject him to an unlawful “fitness for duty” evaluation and physical fitness test before allowing him to return to work, and terminating his employment during the period of time permitted by USERRA to recover from an injury incurred in the line of duty.

“When Congress enacted USERRA, it was to protect our men and women in uniform from experiencing exactly this kind of injustice,” said Thomas E. Perez, Assistant Attorney General for the Department of Justice’s Civil Rights Division. “The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our service members.”

“Members of the Army National Guard sacrifice time away from their jobs to serve their country,” said Olson. “USERRA ensures that they are not discriminated against after they have returned and their employment rights are protected. We are committed to vigorously enforcing USERRA’s protections.”

The case stems from a referral by the United States Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service. This case is being handled by the Civil Rights Division and the U.S. Attorney’s Office for the District of Idaho.

Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.

Related Materials:

Jones Complaint

WASHINGTON – Judy A. Robbins, the U.S. Trustee for the Southern and Western Districts of Texas (Region 7), has been designated by Attorney General Eric Holder also to serve as the U.S. Trustee for the District of Columbia, Maryland, South Carolina, Virginia, and West Virginia (Region 4) for an interim period beginning on February 1, 2013, the Executive Office for U.S. Trustees announced today. She replaces W. Clarkson McDow, Jr., who is retiring after serving as the U.S. Trustee for Region 4 since June 1994.

Ms. Robbins has served as U.S. Trustee for Region 7 since September 2010. Prior to that appointment, she served as an Assistant U.S. Attorney, Civil Division, in the Southern District of Texas, focusing on bankruptcy, civil fraud, commercial litigation and employment discrimination. She has also served as a bankruptcy attorney for the Federal Deposit Insurance Corporation in Houston, a Trial Attorney for the U.S. Trustee痴 office in Houston, an estate administrator for the U.S. Bankruptcy Court for the Southern District of Texas and a pro se law clerk for the U.S. District Court for the Southern District of Texas. Ms. Robbins received her law degree from the University of Houston College of Law and her undergraduate degree cum laude from the University of Houston.

The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 4 is headquartered in Columbia, S.C., with additional offices in Alexandria, Norfolk, Richmond, and Roanoke, Va.; Baltimore and Greenbelt, Md.; and Charleston, W.Va.

Contact:

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

Monday, July 15, 2013 3:10 PM

WASHINGTON – Guy G. Gebhardt has been appointed by Attorney General Eric Holder as Acting U.S. Trustee for Florida, Georgia, Puerto Rico, and the U.S. Virgin Islands (Region 21), effective on January 12, 2013, the Executive Office for U.S. Trustees announced today. He replaces Donald F. Walton, who is retiring after 25 years with the U.S. Trustee Program (USTP), including the past four and a half as U.S. Trustee.

Mr. Gebhardt has served since 1991 as the Assistant U.S. Trustee in the Atlanta office. He has participated in numerous working groups to implement USTP priorities that include coordinating national enforcement against identity theft and unlawful “foreclosure rescue” operations, tracking and reporting civil enforcement activities, and streamlining field office operations. He was a recipient of the Director’s Award for Exemplary Service in November 2002 for his longstanding contributions to the USTP. Before joining the USTP, Mr. Gebhardt practiced law in Atlanta for 17 years. He received his undergraduate degree cum laude from Illinois Wesleyan University in Bloomington, Ill., and, after serving in the U.S. Army, received his law degree from Vanderbilt University School of Law in Nashville, Tenn.

The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 21 is headquartered in Atlanta with additional offices in Macon and Savannah, Ga.; Miami, Orlando, Tallahassee, and Tampa, Fla.; and San Juan, Puerto Rico.

Contact:

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

A federal grand jury in Montgomery, Ala., returned a superseding indictment charging Deatrice Smith Williams and Quentin Collick for their roles in a stolen identity refund fraud conspiracy, Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division, U.S. Attorney for the Middle District of Alabama George L. Beck Jr. and the Internal Revenue Service (IRS) announced today. The 13 count indictment charges Williams and Collick with conspiracy to file false claims, theft of public funds, wire fraud and aggravated identity theft.

 

On Aug. 9, 2012, Quentin Collick was indicted for his role in the conspiracy. In November 2012, pursuant to a criminal complaint, Williams was arrested for her role in the conspiracy. The superseding indictment was unsealed today.

 

According to court documents, Williams worked for a debt collection company in Georgia. As part of her employment, Williams had access to names and social security numbers. She provided several names and Social Security numbers to her son-in-law, Quentin Collick. Collick, and his co-conspirators used those names to file false tax returns from the Middle District of Alabama. Collick and his co-conspirators, in turn, cashed several fraudulent federal refund checks.

 

An indictment merely alleges that crimes have been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Collick and Williams each face maximum potential sentences of 10 years in prison for the conspiracy count, up to 20 years in prison for each wire fraud count, and a mandatory 2-year sentence for the aggravated identity theft counts. Collick also faces up to 10 years in prison for each theft of public funds count. They are also subject to fines and mandatory restitution if convicted.

The case was investigated by Special Agents of the IRS - Criminal Investigation. Tax Division Trial attorneys Jason H. Poole and Michael Boteler and Assistant U.S. Attorney Todd Brown are prosecuting the case.

 

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

EMH Regional Medical Center (EMH) has agreed to pay the United States $3,863,857 and North Ohio Heart Center Inc. (NOHC) has agreed to pay the United States $541,870 to settle allegations that they submitted false claims to Medicare, the Justice Department announced today.

 

EMH is a non-profit community hospital system located in Lorain County, Ohio. During the relevant time period, NOHC was an independent physician group located in Lorain County that practiced at EMH. The settlement resolves allegations that between 2001 and 2006 EMH and NOHC performed unnecessary cardiac procedures on Medicare patients. Specifically, the United States alleged that EMH and NOHC performed angioplasty and stent placement procedures on patients who had heart disease but whose blood vessels were not sufficiently occluded to require the particular procedures at issue.

 

“Billing Medicare for cardiac procedures that are not necessary or appropriate contributes to the soaring costs of health care and puts patients at risk. The settlement demonstrates the Department of Justice’s efforts both to protect public funds and safeguard Medicare beneficiaries,” said Stuart F. Delery, Principal Deputy Assistant Attorney General of the Justice Department’s Civil Division.

 

“ Most doctors act responsibly,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “ These few didn't.  Patient health and taxpayer dollars have to come before greed.”

 

This matter was initiated by the filing of a whistleblower complaint under the False Claims Act (FCA). Under the FCA, private citizens can bring suit for false claims on behalf of the United States and receive a share of the recovery obtained by the government. The whistleblower in this matter, Kenny Loughner, was the former manager of EMH’s catheterization and electrophysiology laboratory. As a result of the settlement, Mr. Loughner will receive $660,859 of the United States’ recovery.

 

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 $10.1 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 $13.8 billion.

 

The investigation was jointly handled by the U.S. Attorney’s Office for the Northern District of Ohio, the Justice Department’s Civil Division, the Office of the Inspector General of the Department of Health and Human Services Cleveland Field Office and the FBI. The claims resolved by this settlement are allegations only, and there has been no determination of liability.

 

The case is captioned United States ex rel. Loughner v. EMH Regional Medical Center, et al. , Case No. 1:06-cv-2441 (N.D. Oh.)

WASHINGTON ? A member of the U.S. military was sentenced today to serve 18 months in prison for his participation in a conspiracy to obtain approximately $244,000 in fraudulent recruiting referral bonuses from various U.S. military components and their contractor, announced Assistant Attorney General Lanny A. Breuer of the Justice Department?s Criminal Division.

U.S. Army Specialist Richard Garcia, 29, of Kirby, Texas, was sentenced today by Chief U.S. District Judge Fred Biery in the Western District of Texas.  In addition to his prison term, Judge Biery sentenced Garcia to serve three years of supervised release and ordered Garcia to pay $244,000 in restitution, jointly and severally with co-conspirators.

On July 26, 2012, Garcia pleaded guilty to one count of conspiracy to commit wire fraud.

According to court documents, Garcia enlisted in the U.S. Army in approximately November 2005.

According to court documents, between 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. (Docupak) to administer recruiting bonus programs designed to offer monetary incentives to soldiers who referred others to join the U.S. military.  In addition, the Army managed its own recruiting bonus programs, which offered bonuses to soldiers who referred other individuals to join the Army or the Army Reserves after registering online as recruiting assistants (RA) or sponsors.  Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person he referred to serve in the U.S. military.

Garcia admitted that he participated in a fraud scheme whereby active duty and civilian contract recruiters provided RAs and sponsors with the names and Social Security numbers of ?walk-in? soldiers ? or persons who decided to join the military without being referred by anyone.  Using this information, the RAs and sponsors claimed credit for referring these potential soldiers to join the military, when in fact they did not refer them.  As part of the fraud scheme, the RAs and sponsors split the bonus payments with the recruiters and others who provided the potential soldiers? personal identifying information.

According to court documents, Garcia and his co-conspirators received at least $244,000 in fraudulent recruiting referral bonuses in total.  Garcia and a co-conspirator personally received a total of approximately $13,000 in fraudulent recruiting referral bonuses by using Garcia?s RA account to claim that Garcia was responsible for referring certain potential soldiers to the U.S. Army, when in fact he had not referred those soldiers.  

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

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

WASHINGTON – The Wisconsin Public Service Corporation (WPS) will invest approximately $300 million in pollution control technology, pay a civil penalty of $1.2 million, and spend $6 million on environmental mitigation projects to resolve violations of the Clean Air Act (CAA), according to the terms of a settlement with the United States, announced today by the Department of Justice and the U.S. Environmental Protection Agency (EPA).
 
 “This settlement will eliminate thousands of tons of harmful air pollution each year, thus improving air quality in Wisconsin and downwind areas,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “The agreement, which requires WPS to reduce emissions from both of its coal-fired power plants in Wisconsin, demonstrates the Justice Department’s continuing efforts, along with EPA, to bring large sources of air pollution into compliance with the Clean Air Act.”

“EPA is committed to protecting communities from the pollution problems that matter most, including reducing air pollution from the largest sources of emissions,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “The pollution reductions and the significant investment in local environmental projects under this agreement will ensure that the people of Wisconsin and neighboring states have cleaner, healthier air.”

“This resolution of the Clean Air Act claims against WPS not only ensures that the damage to our environment from past, excessive emissions will be addressed but that residents throughout the region will benefit from the latest technology, resulting in significant future reductions in air pollutants,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin.  “The Justice Department and the EPA are strongly committed to promote innovative, alternative, and renewable sources of energy that also ensure that our next generations will breathe air that does not compromise their health.  Today’s settlement promotes both goals—and accomplishes environmental justice for all Americans.”

The settlement, which covers the utility’s two power plants – the Pulliam plant in Green Bay, Wis., and the Weston plant in Rothschild, Wis. – requires WPS to install new pollution control technology on one of its largest units, to continuously operate the new and existing pollution controls, and to comply with stringent emission rates and annual tonnage limitations. The settlement also requires WPS to permanently retire, refuel or repower four additional coal-fired units at the Pulliam and Weston plants. The actions taken by WPS to comply with this settlement will result in annual reductions of sulfur dioxide (SO2), nitrogen oxides (NOx), and particulate matter emissions by approximately 15,000 tons from 2010 levels. This settlement covers all eight coal-fired boilers at WPS’s two power plants.

WPS will also spend $6 million on projects that will benefit the environment and human health in communities located near the WPS facilities. WPS must pay $250,000 each to the U.S. Forest Service and the National Park Service, to be used on projects to address the damage done from WPS’s alleged excess air emissions. Up to $4 million will be spent on a renewable energy resource enhancement project, up to $1.2 million on a wood stove change-out project, and up to $300,000 on a community digester project to convert food and/or animal waste to biogas or electricity. WPA may also fund a compressed natural gas or hybrid fleet conversion project, or a solar panel installation project. 
 
Reducing air pollution from the largest sources of emissions, including coal-fired power plants, is one of EPA’s National Enforcement Initiatives for 2011-2013. SO2 and NOx, two key pollutants emitted from power plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze. These pollutants are converted in the air to fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. Reducing these harmful air pollutants will benefit the communities located near WPS facilities, particularly communities disproportionately impacted by environmental risks and vulnerable populations, including children. Because air pollution from power plants can travel significant distances downwind, this settlement will also reduce air pollution outside of the immediate region.

This is the 25th settlement secured as part of EPA’s national enforcement initiative to control harmful emissions from power plants under the Clean Air Act’s New Source Review requirements. The total combined sulfur dioxide and nitrogen oxides emission reductions secured from these settlements will exceed 2 million tons each year once all the required pollution controls have been installed and implemented.

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

More information about the settlement: www.epa.gov/enforcement/air/cases/wps.html

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

Michael Carlow, a resident of Pittsburgh, pleaded guilty today to corruptly endeavoring to obstruct the Internal Revenue Service (IRS), the Justice Department and IRS announced. Carlow appeared before U.S. District Judge David Cercone.

 

In 1996, Carlow pleaded guilty to bank fraud and tax fraud in federal court and was sentenced to eight years in prison. Upon his release in 2002, Carlow resided at the home of his girlfriend, Elizabeth Jones, in Pittsburgh.

 

According to documents filed in the case, the IRS assessed more than $6 million in overdue taxes, interest and penalties against Carlow for the years 1992 through 1996. However, from 2000 through 2011, in order to thwart efforts by the IRS to collect what he owed, Carlow concealed his assets and income through Jones and eight different nominee corporations. According to documents filed in the case, Carlow maintained a secret interest in various corporations and had fees and royalties paid to Jones rather than to himself. He also failed to report his ownership and control of corporate assets to U.S. Probation and the IRS. Carlow filed false U.S. individual income tax returns for 2003-2006 and failed to file U.S. individual income tax returns from 2008 through 2011. In August 2011, Jones pleaded guilty to her conduct related to acting as a nominee for Carlow.

 

Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, commended the investigative efforts of IRS - Criminal Investigation Special Agents, who investigated the case, and Tax Division Trial Attorneys Kenneth Vert and Jeffrey McLellan, who are prosecuting the case.

 

Sentencing is scheduled for Oct. 4, 2013.

WASHINGTON – Gail B. Geiger has been appointed by Attorney General Eric Holder as Acting U.S. Trustee for Alaska, Idaho, Montana, Oregon, and Washington (Region 18), effective on January 5, 2013, the Executive Office for U.S. Trustees announced today. She replaces Robert D. Miller Jr., who is retiring after nearly 25 years with the U.S. Trustee Program (USTP), including the past two and a half as U.S. Trustee.

Prior to her appointment as Acting U.S. Trustee, Ms. Geiger served as the Assistant U.S. Trustee in the Eugene, Ore., office. She has also served as Special Assistant to the Office of the General Counsel in the Executive Office for U.S. Trustees (EOUST) in Washington, D.C., coordinating USTP enforcement activity relating to mortgage servicers and other creditors, and as Associate General Counsel for Consumer Practice in the EOUST's Office of the General Counsel, advising USTP field offices on consumer bankruptcy issues. In October 2011, she was part of a team of USTP employees who received the Attorney General's Award for Distinguished Service for their work on the $25 billion National Mortgage Settlement. Other assignments in the USTP include serving as Acting Assistant U.S. Trustee in Riverside, Calif.; a Trial Attorney in Seattle; and Attorney in Charge in Agana, Guam.

Before joining the USTP in 1990, Ms. Geiger practiced law with a Seattle law firm and served as an Assistant Attorney General for the Commonwealth of the Northern Mariana Islands. Ms. Geiger received her law degree cum laude from Willamette University Law School in Salem, Ore., and her undergraduate degree from Gonzaga University in Spokane, Wash.

The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 18 is headquartered in Seattle, with additional offices in Spokane, Wash.; Anchorage, Alaska; Boise, Idaho; Eugene and Portland, Ore.; and Great Falls, Mont.

Contact:

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

Anthony McIntosh, a former correctional officer at the Prince George’s County Detention Center, in Upper Marlboro, Md., today pleaded guilty to obstruction of justice for providing false information about the circumstances surrounding the in-custody death of Ronnie White on June 29, 2008. White, at the time of his death, was being detained on charges related to the death two days earlier of a Prince George’s County police officer.

 

McIntosh, 49, of Brooklyn, N.Y., pleaded guilty to a violation of 18 U.S.C. § 1519 for providing false information in a witness statement he submitted to a police detective investigating White’s in-custody death. McIntosh admitted during his guilty plea that when he wrote his witness statement, he omitted material information that was truthful, and included information that he knew was false. Specifically, McIntosh claimed in the false witness statement that another officer had discovered White unresponsive in his single-occupant cell and had then summoned McIntosh to the cell. During the guilty plea, McIntosh admitted that, in actuality, he had been the first correctional officer to find White unresponsive in the cell, and had failed to call a medical emergency signal as required by the Department of Corrections. McIntosh also admitted that he included in his statement the false claims that he never moved Ronnie White and that he “didn’t know what was going on” when his partner told him that White appeared to be unresponsive.

 

“Instead of lawfully carrying out his critical public safety responsibilities, Mr. McIntosh used his position to obstruct the search for the truth,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Justice Department will continue to vigorously prosecute officers who cross the line and engage in criminal misconduct.”

 

McIntosh faces a maximum penalty of 20 years in prison and a fine of $250,000. Sentencing is set for April 8, 2013, before U.S. District Judge Alexander Williams Jr.

 

The case was investigated by the Baltimore Division of the FBI and was prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Ali Ahmad of the Civil Rights Division of the Department of Justice, with the assistance of the U.S. Attorney’s Office for the District of Maryland.

The Justice Department announced today that Lindrith Tsoodle, 57, a former officer with the Three Affiliated Tribes Police Department, was apprehended and arrested on the Rocky Boy Reservation in Montana yesterday in relation to his indictment on civil rights and obstruction violations.

 

Tsoodle was indicted on Dec. 13, 2012. The indictment alleges that, on Dec. 6, 2010, Tsoodle, while acting in his capacity as a police officer, assaulted “T.K.” during an arrest while T.K. was handcuffed, thereby violating his civil rights. The indictment alleges that Tsoodle slammed T.K. against a wall, excessively tightened his handcuffs, shoved him into a police car, used Oleoresin Capsicum spray on him, and struck him repeatedly, both with his body and with a baton. The indictment further charges that T.K. suffered bodily injury as a result of Tsoodle’s use of excessive force.

 

According to the indictment, following the assault on T.K., Tsoodle attempted to convince a witness not to report the incident to other law-enforcement officials and lied to a federal agent about the assault.

 

Tsoodle is also charged with assaulting “S.L.” during a separate arrest. The indictment alleges that, on Nov. 20, 2010, while S.L. was in handcuffs, Tsoodle twisted his neck, shoved him to the ground, and kneed him in the chest, thereby violating his civil rights.

 

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

 

This case is being investigated by the North Dakota Division of the FBI and is being prosecuted by Special Litigation Counsel Gerard V. Hogan and Trial Attorney Dana Mulhauser of the Civil Rights Division of the U.S. Department of Justice.

Richard R. Whatley, a former owner of Alliance Staffing Management Inc. (ASM), pleaded guilty today for willfully failing to account for and pay over employment taxes, the Justice Department and the Internal Revenue Service (IRS) announced today. Whatley appeared before Judge David Nuffer in Salt Lake City.

 

In January 2010, a federal grand jury charged Whatley with five counts of willfully failing to account for and pay over employment taxes, relating to three different employee leasing companies that he operated and controlled between the years 2001 and 2006. According to the terms of the written plea agreement, Whatley pleaded guilty to one count of the superseding indictment and may serve between 41 months and 51 months in federal prison. Whatley will also pay $541,513.61 in restitution to the IRS.

 

According to the plea agreement, during the 2002 through 2004 tax years, Whatley held an ownership interest in and had the ability to control the finances of ASM, an employee leasing company. Whatley’s control included determining the amount of employment taxes that had to be paid over to the IRS and the authority to decide which bills would be paid and which bills would not be paid. Whatley was also a responsible person at ASM for paying over the employment taxes to the IRS. As charged in the superseding indictment, in the fourth tax quarter of 2003, Whatley caused the collection of employment taxes from ASM’s employees’ wages and then willfully failed to pay over $541,513.61 in employment taxes (employee portion) to the IRS.

 

Sentencing is scheduled for July 10, 2013 before Judge Nuffer in Salt Lake City.

 

The case is being prosecuted by Trial Attorneys Christopher J. Maietta and Stuart A. Wexler of the Justice Department’s Tax Division, and was investigated by special agents of IRS - Criminal Investigation.

 

More information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax .

WASHINGTON – A foreign national pleaded guilty today to federal human smuggling charges for his role in a scheme to smuggle undocumented migrants from India into the United States, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Kenneth Magidson for the Southern District of Texas; and Special Agent in Charge Brian M. Moskowitz of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Houston

Fabiano Augusto Amorim, 28, a Brazilian national, pleaded guilty today at a hearing before U.S. District Judge Ewing Werlein Jr. in Houston, to one count of conspiracy to bring undocumented migrants into the United States for profit and to one count of unlawfully bringing two undocumented migrants into the United States for profit.

On June 6, 2012, Amorim was charged by indictment, along with four other individuals, with one count of conspiracy to smuggle undocumented migrants into the United States and six human smuggling counts related to five incidents in which Amorim helped smuggle undocumented migrants into the United States.  Based on Amorim’s guilty plea, the government will dismiss the remaining human smuggling counts against him at sentencing.

At the plea hearing and in related court documents, Amorim admitted that between January 2011 and April 2012, he conspired with his co-defendants to bring undocumented migrants to the United States, and to encourage and induce undocumented migrants to come to the United States unlawfully.  According to court documents, Amorim and his co-conspirators devised the scheme to profit financially.

In support of the conspiracy, Amorim and other conspirators recruited individuals in India who were willing to pay up to $60,000 to be smuggled into the United States.  For their smuggling operations, Amorim and his co-conspirators used a network of alleged conspirators in South America, Central America, the Caribbean and the United States, including the state of Texas.  Using this network, Amorim and his co-conspirators transported groups of undocumented migrants from locations within India through South America, Central America and the Caribbean and then into the United States by various means, including by air travel, automobiles, water craft and foot.  Many of these smuggling events, including five of the incidents described in the indictment, involved illegal entry into the United States via the border between the United States and Mexico near McAllen and Laredo, Texas.
 
At sentencing, which is scheduled for April 5, 2013, Amorim faces a maximum sentence of 15 years in prison and a fine of up to $500,000.  Amorim currently is serving a 36-month sentence in federal prison for participating in a separate conspiracy to smuggle undocumented migrants from Brazil and Peru into the United States via a maritime route from the Bahamas into southern Florida. 
 
Amorim’s co-conspirator Maria Adela De Luna pleaded guilty on Nov. 9, 2012, to one count of conspiracy to harbor undocumented migrants in the United States.  Co-conspirator Kaushik Jayantibhai Thakkar pleaded guilty on Dec. 3, 2012, to one count of conspiracy to bring undocumented migrants into the United States for profit and to one count of unlawfully bringing two undocumented migrants into the United States for profit. 

The investigation was conducted by agents with ICE-HSI in McAllen and Houston, with the assistance of U.S. Customs and Border Protection’s Alien Smuggling Interdiction Unit.  This case is being prosecuted jointly by Trial Attorney Stephen Curran of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Leo J. Leo III and Casey MacDonald of the Southern District of Texas.
 
The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI.  The ECT program focuses on human smuggling networks that may present particular national security or public safety risks, or present grave humanitarian concerns.  ECT has dedicated investigative, intelligence and prosecutorial resources.  ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.

WASHINGTON – A U.S. Army Major has pleaded guilty today to accepting thousands of dollars in gratuities from contractors while he was a U.S. Army captain deployed to Iraq, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the District of South Carolina William N. Nettles.

Ulysses S. Hicks, 40, of Sumter, S.C., pleaded guilty before U.S. District Chief Judge Margaret B. Seymour in the District of South Carolina to a criminal information charging him with one count of conspiracy to accept illegal gratuities.

According to court documents, Hicks was a captain in the U.S. Army, who was deployed to Forward Operating Base (FOB) Hammer in Iraq as a pay agent for field ordering officer (FOO) funds.  FOO funds are used to purchase miscellaneous items and supplies such as paint, lumber and plywood from local vendors.  It is a violation of federal law for pay agents to accept gratuities from contractors dependent upon them for contracts.

From about March 2007 through October 2008, Hicks, along with co-conspirator former U.S. Army Master Sergeant Julio Soto Jr., was involved with the construction of a government building at FOB Hammer by local Iraqi contractors.  According to court documents, Hicks and Soto unlawfully sought, received and accepted illegal gratuities for helping Iraqi contractors gain U.S. government contracts.  After accepting the illegal gratuities, Hicks and Soto purchased U.S. Postal money orders with the illegal proceeds and mailed them back to the United States.

At sentencing, Hicks faces a maximum penalty of five years in prison, a fine of $250,000 and up to three years of supervised release.  As part of his plea agreement, Hicks agreed to pay $65,409 plus interest in restitution to the United States. 

Soto pleaded guilty on Aug. 29, 2012, before U.S. District Chief Judge Seymour to a criminal information charging him with one count of conspiracy to accept illegal gratuities.  On Dec. 7, 2012, Soto was sentenced to serve five years of probation and ordered to pay $62,542 in restitution. 

This 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 by Assistant U.S. Attorney Winston Holliday, Deputy Chief of the General Crimes Section of the U.S. Attorney’s Office for the District of South Carolina.  The case was investigated by SIGIR, the Defense Criminal Investigative Service and the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.

WASHINGTON – Transocean Deepwater Inc. has agreed to plead guilty to violating the Clean Water Act (CWA) and to pay a total of $1.4 billion in civil and criminal fines and penalties, for its conduct in relation to the Deepwater Horizon disaster, the Department of Justice announced today. The criminal information and a proposed partial civil consent decree to resolve the U.S. government’s civil penalty claims against Transocean Deepwater Inc. and related entities were filed today in U.S. District Court in the Eastern District of Louisiana.

 

Transocean Deepwater Inc. has signed a cooperation and guilty plea agreement with the government, also filed today, admitting its criminal conduct. As part of the plea agreement, Transocean Deepwater Inc. has agreed, subject to the court’s approval, to pay $400 million in criminal fines and penalties and to continue its on-going cooperation in the government’s criminal investigation. In addition, pursuant to the terms of a proposed partial civil consent decree also lodged with the court today, Transocean Ocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., Transocean Deepwater Inc. and Triton Asset Leasing GMBH have agreed to pay an additional $1 billion to resolve federal Clean Water Act civil penalty claims for the massive, three-month-long oil spill at the Macondo Well and the Transocean drilling rig Deepwater Horizon. Under the civil settlement, the Transocean defendants also must implement court-enforceable measures to improve the operational safety and emergency response capabilities at all their drilling rigs working in waters of the United States.

 

“This resolution of criminal allegations and civil claims against Transocean brings us one significant step closer to justice for the human, environmental and economic devastation wrought by the Deepwater Horizon disaster,” said Attorney General Eric Holder. “This agreement holds Transocean criminally accountable for its conduct and provides nearly a billion dollars in criminal and civil penalties for the benefit of the Gulf states. I am particularly grateful today to the many Justice Department personnel and federal investigative agency partners for the hard work that led to today’s resolution and their continuing pursuit of justice for the people of the Gulf.” 

 

“Today’s announced settlement will aid the Gulf region’s recovery from the Deepwater Horizon oil spill and require Transocean to take important steps that will help guard against such incidents happening in the future,” said Acting Associate Attorney General Tony West.  “This resolution is the culmination of the tremendous efforts of many attorneys and staff in the Justice Department’s Criminal, Civil and Environment and Natural Resources Divisions – dedicated public servants whose hard work continues on behalf of the American people.”

“Transocean’s rig crew accepted the direction of BP well site leaders to proceed in the face of clear danger signs — at a tragic cost to many of them,” said Lanny A. Breuer, Assistant Attorney General for the Justice Department’s Criminal Division. “Transocean’s agreement to plead guilty to a federal crime, and to pay a total of $1.4 billion in criminal and civil penalties, appropriately reflects its role in the Deepwater Horizon disaster.”

“The development and exploration of a domestic source of energy is vitally important, and it can and must be done in a responsible and sound manner. This unprecedented settlement under the Clean Water Act demonstrates that companies will be held fully accountable for their conduct and share responsibility for compliance with the laws that protect the public and the environment from harm,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. “This settlement will provide immediate relief and benefits to the people of the five Gulf states, and requires Transocean to implement significant safety measures, as well as stringent auditing and monitoring to reduce the risk of any future disasters.”

 

“Today’s settlement and plea agreement is an important step toward holding Transocean and those responsible for the Deepwater Horizon disaster accountable,” said Cynthia Giles, Assistant Administrator for the U.S. Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance. “EPA will continue to work with DOJ and its federal partners to vigorously pursue the government’s claims against all responsible parties and ensure that we are taking every possible step to restore and protect the Gulf Coast ecosystem.”

 

According to court documents, on April 20, 2010, while stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions and fire, which resulted in the deaths of 11 rig workers and the largest oil spill in U.S. history. In agreeing to plead guilty, Transocean Deepwater Inc. has admitted that members of its crew onboard the Deepwater Horizon, acting at the direction of BP’s “Well Site Leaders” or “company men,” were negligent in failing fully to investigate 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 presented to the court, $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 oil 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.

 

The civil settlement secures $1 billion in civil penalties for violations of the CWA, a record amount that significantly exceeds last year’s $70 million civil penalty paid by MOEX Offshore 2007 LLC, a 10 percent partner with BP in the Macondo well venture. The unprecedented $1 billion civil penalty is subject to the Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act of 2012 (Restore Act), which provides that 80 percent of the penalty will be to be used to fund projects in and for the Gulf states for the environmental and economic benefit of the region. This civil resolution reserves claims for natural resource damages and clean-up costs.

 

Under the civil settlement, the Transocean defendants must also observe various court-enforceable strictures in its drilling operations, aimed at reducing the chances of another blowout and discharge of oil and at improving emergency response capabilities. Examples of these requirements include certifications of maintenance and repair of blowout preventers before each new drilling job, consideration of process safety risks, and personnel training related to oil spills and responses to other emergencies. These measures apply to all rigs operated or owned by the Transocean defendants in all U.S. waters and will be in place for at least five years.

 

The guilty plea agreement and criminal charge 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, EPA, Department of the Interior, 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.

 

The civil resolution announced today is part of the ongoing litigation against defendants BP Exploration and Production Inc., the Transocean defendants, and Anadarko Petroleum Corporation (among others) for civil penalties, injunctive relief, and a declaration of unlimited liability for removal costs and damages under the Oil Pollution Act. The civil enforcement effort is supervised by Assistant Attorney General Moreno for the Environment and Natural Resources Division and Deputy Assistant Attorney General Brian Hauck of the Civil Division. Numerous federal agencies have contributed immeasurably to these enforcement and settlement efforts, including the EPA, the U.S. Coast Guard, the National Oceanic and Atmospheric Administration, the Department of the Interior and the Department of Agriculture.

 

The criminal case against Transocean is being prosecuted by Deepwater Horizon Task Force Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black and Rohan Virginkar. Numerous Environment Division and Civil Division lawyers are pursuing the civil enforcement action, led by Steve O’Rourke and R. Michael Underhill.

 

An information is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

 

The proposed civil settlement is subject to a public comment period and final court approval. Information on submitting comment will be available at www.justice.gov/enrd/Consent_Decrees.html.

Related Material:

• Transocean Information
• Transocean Notice of Lodging
• Transocean Consent Decree
• Transocean Plea Agreement

The Department recognizes that parts of these documents may not be in an accessible format. If you have a disability and the format of any material on the site interferes with your ability to access some information, please contact webmaster@usdoj.gov.

Amazon.com; Leon Max Inc., d/b/a Max Studio; Macy’s Inc.; and Sears, Roebuck and Co., Kmart Corporation and Kmart.com (collectively, Sears) have agreed to settle civil lawsuits concerning alleged violations of the Textile Fiber Product Identification Act and the Federal Trade Commission (FTC) Act, the Justice Department announced today.

 

The complaints, which were filed today in federal court along with proposed stipulated orders to settle the matters, allege that these retailers violated the Textile Act and the FTC Act by advertising and labeling textile products that were made from rayon as being made from “bamboo.” The cases were referred to the Justice Department by the FTC, which investigates violations of the Textile Act and FTC Act.

 

Under the terms of the proposed stipulated orders agreed to by the companies, the companies will take steps to prevent future violations, including distributing the orders to employee managers with responsibility for marketing or sale of textile products, keeping accounting and other records necessary to demonstrate compliance with the order, and reporting relevant data to the FTC. In addition, each company has agreed to make a monetary payment to the government as follows: Amazon ($455,000); Max Studio ($80,000); Macy’s ($250,000); and Sears ($475,000).

 

Under the Textile Act and Rules, a product’s label and advertising must accurately describe the type of fiber used to make the product. Unless a product is made directly with bamboo fiber, it cannot be labeled and advertised as “bamboo.” The complaints allege that these retailers advertised and sold products that were really made from a manufactured fiber, rayon, as being made from bamboo, widely understood to be a renewable resource.

 

According to the complaints, the manufacturing process for rayon requires the use of hazardous chemicals such as sodium hydroxide. The complaints further note that this manufacturing process emits hazardous air pollutants, including carbon disulfide, carbonyl sulfide, ethylene oxide, methanol, methyl chloride, propylene oxide and toluene.

 

“Consumers pay a premium for products labeled and advertised as being made from bamboo because they believe that the product is made from a renewable resource and is good for the environment,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division. “Consumers expect that they will get what they pay for; here, they didn’t.”

 

The cases, United States v. Amazon.com, Inc.; United States v. Leon Max, Inc., d/b/a Max Studio; United States v. Macy’s, Inc.; and United States v. Sears, Roebuck and Co. et al. were filed in the District Court for the District of Columbia.

 

Principal Deputy Assistant Attorney General Delery thanked the FTC for referring this matter to the department. The Consumer Protection Branch of the Justice Department’s Civil Division brought the cases on behalf of the United States.

WASHINGTON – The owner of several Detroit-area adult day care centers pleaded guilty today for her role in a $13.2 million psychotherapy fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Chicago Regional Office.

Beth Jenkins, 48, of Farmington Hills, Mich., pleaded guilty to one count of conspiracy to commit health care fraud and five counts of health care fraud, before U.S. District Judge Stephen J. Murphy III in the Eastern District of Michigan.

Jenkins admitted that she and others conspired to defraud Medicare through Quality Recreation & Rehabilitation LLC (QRR) and Procare Rehabilitation Inc., two adult day care centers she owned and operated with alleged co-conspirators.  According to court documents, Jenkins and her alleged co-conspirators owned and operated several Detroit-area adult foster care homes (AFCs) that housed severely mentally-disabled Medicare recipients.  Court documents allege that Medicare beneficiaries living at AFCs, some of which were owned and operated by Jenkins and her alleged co-conspirators, were transported to QRR and Procare by Jenkins and others.  According to court documents, Jenkins and her alleged co-conspirators used the AFC residents’ Medicare information to bill Medicare for group and individual psychotherapy that was never provided.

 From 2004 through 2011, Jenkins and her alleged co-conspirators submitted more than 185,000 claims to Medicare totaling more than $13.2 million for group and individual psychotherapy that was not provided.  According to court documents, Medicare paid $4,777,792 on these claims.

At sentencing, scheduled for April 19, 2013, Jenkins faces a maximum penalty of 60 years in prison and a $1,500,000 fine. 

Jenkins’s co-defendants, Dr. Alphonso Berry and Marcus Jenkins, Beth Jenkins’s husband, are scheduled for trial on Jan. 8, 2013.  They are presumed innocent until proven guilty at trial.

This case is being prosecuted by William G. Kanellis and Tarek Helou of the Criminal Division’s Fraud Section.  It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

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.

Joseph Dominick, 21, from Brandon, Miss., pleaded guilty today in U.S. District Court in Jackson, Miss., to one count of conspiracy to commit federal hate crimes in connection with his role in the assault of African-Americans in Jackson. Defendants Deryl Paul Dedmon, 20; John Aaron Rice, 19; Dylan Wade Butler, 21; William Kirk Montgomery, 23; and Jonathan Kyle Gaskamp, 20, all from Brandon have previously entered guilty pleas in connection with their roles in these offenses. The conspiracy culminated in the death of James Craig Anderson, who was assaulted and killed on June 26, 2011.

The investigation conducted by the FBI revealed that, beginning in the spring of 2011, Dominick and others conspired with one another to harass and assault African-Americans in and around Jackson. On numerous occasions, the co-conspirators used dangerous weapons, including beer bottles, sling shots and motor vehicles to cause, and attempt to cause, bodily injury to African-Americans. They would specifically target African-Americans they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault. The co-conspirators would often boast about these racially motivated assaults.

On an occasion predating the death of Mr. Anderson, Dominick, Montgomery, Butler and others known to the government traveled to Jackson in Dominick’s truck for the purpose of finding and assaulting vulnerable African-Americans. The co-conspirators threw multiple glass beer bottles at African-American pedestrians. Dominick and his co-conspirators also purchased a sling shot and metal ball bearings to shoot at African-Americans, and then took turns shooting the sling shot at multiple African-Americans they encountered.

On June 25, 2011, Dominick and others attended a party/bonfire in Puckett, Miss., to celebrate Dominick’s birthday. During the party, Dominick and others, talked about going to Jackson to harass and assault African-Americans. By the early morning hours of June 26, 2011, Montgomery, Dedmon, Rice, Butler and three other co-conspirators known to the government agreed to carry out their plan to find, harass and assault African-Americans. Dominick did not go to Jackson on June 26, 2011. That evening culminated in Dedmon deliberately using his Ford F250 truck to run over Mr. Anderson, causing injuries which resulted in Mr. Anderson’s death.

“We hope that today’s guilty plea provides further assurance to the victim’s family and to the community that the Department of Justice will leave no stone unturned to find those responsible for these senseless racially motivated attacks,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “Our investigation is ongoing, and we will continue to pursue those who participated in this violent conspiracy, which culminated in the tragic death of James Craig Anderson.”

“The acts carried out by Dominick and his co-conspirators against African-Americans are absolutely reprehensible.  Bringing these individuals to justice is a top priority of this office and we will continue to assist the Department of Justice Civil Rights Division in this investigation,” said U.S. Attorney Gregory K. Davis.

Daniel McMullen, Special Agent in Charge of the FBI’s Jackson Field Office, said, “The FBI continues to investigate the hate fueled assaults on African-Americans in and around Jackson, Mississippi, which include the attack on and resulting death of James Anderson on June 26, 2011.  This behavior, which seeks to deprive others of their civil rights based on the color of their skin, cannot be tolerated.”

These guilty pleas were the result of a cooperative effort between the U.S. Attorney’s Office for the Southern District of Mississippi, the United States Department of Justice’s Civil Rights Division, and the Hinds County District Attorney’s Office. This case was investigated by the Jackson Division of the FBI and the Jackson Police Department. It is being prosecuted by Trial Attorney Sheldon L. Beer and Deputy Chief Paige M. Fitzgerald of the Civil Rights Division and Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.