District Not Recorded

The Department of Justice’s Office of Justice Programs (OJP) today announced grant awards totaling nearly $141 million to help protect children from exploitation, trauma and abuse, while also funding improvements in the judicial system’s handling of child abuse and neglect cases. 

“The Justice Department has a solemn responsibility to help keep young people safe and out of harm’s way,” said Attorney General Merrick B. Garland. “These grants provide a wide variety of investigative and trauma-informed resources that will help law enforcement and child-serving professionals address child exploitation and abuse.”

These awards will provide law enforcement officials, child advocates and service providers the means to protect children from abuse and sexual exploitation. Funds will help develop, enhance and strengthen investigative and trauma-informed services to assist youth, while supporting robust training and technical assistance efforts to ensure the professionals working with these youth have the tools they need to be successful. 

“Protecting our children, securing their health and well-being, and addressing the trauma that too many young people have experienced are central to our mission at the Office of Justice Programs,” said Principal Deputy Assistant Attorney General Amy L. Solomon for OJP. “These grants will give public safety professionals and those who serve our children and youth the tools they need to keep kids safe from harm and put them on the path to a safe and bright future.” 

Grants from OJP’s Office of Juvenile Justice and Delinquency Prevention (OJJDP) and National Institute of Justice (NIJ) are distributing millions of dollars to local, state and Tribal jurisdictions throughout the United States, territories and the District of Columbia. 

Below is a list of funded grants: 

Missing and Exploited Children 

• Nearly $37 million funds the National Center for Missing & Exploited Children (NCMEC), which enables the center’s operations and provides support, technical assistance and training to help law enforcement locate and recover missing and exploited children. 

• Another $6 million is being awarded to NCMEC’s National Resource Center and Clearinghouse (NRCC) as part of an interagency agreement between OJJDP and the U.S. Secret Service. The NRCC helps prevent child abduction and sexual exploitation, and provides training and technical assistance to victims, their families and the professionals who serve them.  
• About $4.4 million  supports the National AMBER Alert Training and Technical Assistance Program to help the AMBER Alert network improve law enforcement’s response to abducted children and encourage public participation in their recovery. 

Internet Crimes Against Children 

• Over $29.5 million is being awarded under the Internet Crimes Against Children (ICAC) Task Force Program to conduct forensic examinations and to investigate and prosecute technology-facilitated child sexual exploitation throughout the U.S. 

• Another $3.3 million is being awarded under the National ICAC Training Program to provide core training programs for ICAC investigators. 
• About $3 million funds OJJDP’s Strengthening Internet Crimes Against Children Technological Investigative Capacity, which enables ICAC task forces and their affiliates to improve technology that combats child pornography, exploitation and sex trafficking. 

Victims of Child Abuse 

• Under the Victim of Child Abuse Act (VOCA), more than $21 million funds the Children’s Advocacy Centers (CAC) National Subgrants Program in three categories: National Subgrants Program, National Subgrants Program for Victims of Child Pornography and National Military Partnership Program.  

• An additional $5 million in continuation funding is being awarded to four organizations via the VOCA Regional Children’s Advocacy Center program. This program supports regional centers that help to establish multidisciplinary teams, local programs and state chapter organizations that respond to child abuse and neglect, and that deliver training and technical assistance. 

• Another $2.5 million is being awarded under the Children’s Advocacy Center’s Membership and Accreditation Program, which supports training and technical assistance to implement national standards for CACs. 

• Over $11 million is being awarded to help improve outcomes for foster children through the Court Appointed Special Advocates Training and Technical Assistance and Subgrants Program. 
• Over $3 million is being awarded for Child Abuse Training for Judicial and Court Personnel to improve the judicial system’s role in child abuse and neglect cases with an emphasis on eliminating prolonged foster care placement.  

Children Exposed to Violence and Child Protection  

• More than $7 million is being awarded to communities under the Strategies to Support Children Exposed to Violence Program to develop or enhance support services for children exposed to violence and to implement community violence intervention strategies. Funding also supports training and technical assistance for program sites. 

• Another nearly $3 million in grants funds Supporting Effective Interventions for Adolescent Sex Offenders and Children with Behavior Problems, which helps communities provide a continuum of intervention and supervision services for adolescent sex offenders, children with behavior problems and treatment services for their victims and families. 
• Nearly $900,000 funds the Post-Secondary Education Opportunities for Child Protection Professionals, which supports the training of future mandated reporters and child protection professionals. 

Research 

• NIJ is awarding about $1.5 million to fund Research to Reduce Trauma for Child Pornography Victims. 

Once the awards are made, information about the grantees selected under each solicitation can be found online at the OJP Grant Awards Page. 

OJP provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims and enhance the rule of law. More information about OJP and its components can be found at  www.ojp.gov. 

The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission (FTC), filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia against Clarence L. Werner (Werner). Werner is the founder of Werner Enterprises Inc. (Werner Enterprises), one of the largest truckload carriers in the United States.

The lawsuit alleges that Werner violated the pre-transaction notification and waiting period requirements of the Hart-Scott-Rodino Act of 1976 (HSR Act) for acquisitions of Werner Enterprises voting securities, several of which were large open-market acquisitions made while he was serving as a director of Werner Enterprises. At the same time, the department filed a proposed settlement, subject to approval by the court, under which Werner has agreed to pay a $486,900 civil penalty to resolve the lawsuit.

The HSR Act imposes notification and waiting period requirements for transactions meeting certain size thresholds so that they can undergo pre-transaction antitrust review. Federal courts can assess civil penalties for pre-transaction notification violations under the HSR Act in lawsuits brought by the department. The maximum civil penalty for an HSR Act violation, which is adjusted annually, is currently $43,792 per day.

Further details about this matter are described in the FTC’s press release issued today, and in the attached complaint and competitive impact statement.

Consistent with the requirements of the Tunney Act, the proposed settlement, along with the competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period via email to bccompliance@ftc.gov or by post to Maribeth Petrizzi, Special Attorney, United States, c/o Federal Trade Commission, 600 Pennsylvania Avenue, NW, CC-8416, Washington, D.C. 20580. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.

The United States and Commonwealth of Pennsylvania, Department of Environmental Protection (DEP), filed a civil lawsuit against the Bucks County Water and Sewer Authority (the Authority), alleging violations of the federal Clean Water Act and Pennsylvania Clean Steams Law. The violations primarily consist of sanitary sewer overflows – typically in the form of wastewater overflowing from manholes – and operation and maintenance violations under its state-issued permits. 

At the same time the civil suit was filed, the United States and Commonwealth of Pennsylvania also filed a proposed consent decree that would resolve the lawsuit subject to the district court’s approval. The Authority will pay a $450,000 penalty and will be obligated to devote substantial resources to evaluate and upgrade its sewer systems as part of the decree.

The Authority owns and operates hundreds of miles of sewer pipes and associated treatment plants and wastewater collection and conveyance systems, largely situated in Bucks County. The Authority’s service areas have historically suffered from sanitary sewer overflows, including over 100 that have occurred in Plumstead Township since 2014. In that timeframe, multiple overflows have also occurred in Bensalem, Richland, Doylestown Borough, Middletown, Upper Dublin and New Hope/Solebury.

Sanitary sewer overflows constitute unauthorized discharges of pollutants into waterways. Properly designed, operated and maintained sanitary sewer systems are meant to collect and transport sewage to a treatment facility. Overflows occur for a variety of reasons, including severe weather, improper system design, equipment failures, poor management, improper operation and maintenance and vandalism. 

Sanitary sewer overflows pose a substantial risk to public health and the environment. The main pollutants in raw sewage from overflows are bacteria, pathogens, nutrients, untreated industrial wastes, toxic pollutants, such as oil, pesticides, wastewater solids and debris.

Along with the financial penalty, the Authority has agreed to evaluate its collection system and adopt extensive measures to ensure compliance with the federal and state requirements. These include monitoring water flow; modelling the collection system; conducting inflow and infiltration evaluations; identifying and remedying hydraulic capacity limitations; addressing illegal sewer connections; and improving its overall operation and maintenance program.

“We’re pleased that the water and sewer authority has agreed to take extensive steps to upgrade and improve sewer systems for Bucks County, particularly the Plumstead area,” said Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division. “The federal Clean Water Act requires communities to eliminate or reduce their sewage overflows into the nation’s rivers, lakes, and oceans. Today’s agreement furthers that and will result in a cleaner, safer Delaware River.” 

“The consent decree will mean less sewage in streets, basements, and waterways to improve the lives of citizens in Bucks County,” said U.S. Attorney Jennifer Arbittier Williams for the Eastern District of Pennsylvania. “We thank the Authority for working cooperatively to reach this resolution that will surely improve public health and environmental quality.”

“Sewer overflows pollute rivers and streams and can expose local residents to toxic pollutants,” said Acting Assistant Administrator Larry Starfield for the Environmental Protection Agency (EPA)’s Office of Enforcement and Compliance Assurance. “Today’s settlement will reduce sewer overflows, which mean a cleaner, safer environment for residents of Bucks County.”

“Protecting the air, land, and water from pollution, while providing for the health and safety of our citizens is the very mission of our agency,” said Secretary Patrick McDonnell of DEP. “We are accomplishing just that through this coordinated and cooperative effort, not only with our federal partners at EPA, but with the Bucks County Water and Sewer Authority as well.”

The Authority cooperated with the investigation. As part of the settlement, it did not admit liability for the alleged violations.

The proposed consent decree, which has been filed in the U.S. District Court for the Eastern District of Pennsylvania, is subject to a 30-day public comment period and approval by the federal court. The consent decree will be available for viewing at https://www.justice.gov/enrd/consent-decrees. 

The case was handled by Civil Chief Gregory B. David, former Assistant U.S. Attorney John T. Crutchlow, and Pamela Lazos, Senior Assistant Regional Counsel for the EPA. Supervisory Counsel William H. Gelles handled the case on behalf of the Commonwealth of Pennsylvania’s DEP. 

The Department of Justice’s Office of Justice Programs (OJP) today announced grant awards totaling more than $300 million to help combat America’s substance use crisis, which has worsened during the coronavirus pandemic.

“Against the backdrop of the COVID-19 pandemic, the nation is experiencing a precipitous rise in opioid and stimulant misuse and overdoses,” said Attorney General Merrick B. Garland. “The Justice Department is committed to supporting programs aimed at addressing the substance use crisis that is devastating communities across the nation.”

The most recent provisional data from the Centers for Disease Control and Prevention indicates that, “there were an estimated 100,306 drug overdose deaths in the United States during the 12-month period ending in April 2021, an increase of 28.5% from the 78,056 deaths during the same period the year before.”

“The substance use crisis in American society has been a persistent and deadly problem for decades, and illicitly manufactured fentanyl and synthetic opioids have tightened the grip drugs have on our society,” said Principal Deputy Assistant Attorney General Amy L. Solomon for OJP. “The Biden-Harris Administration is working diligently to address these problems by committing unprecedented levels of funding toward research, substance use treatment and mental health services, along with investments in enforcement, response and evidence-based treatment.”

OJP’s Bureau of Justice Assistance (BJA) and Office of Juvenile Justice and Delinquency Prevention (OJJDP) are distributing millions of dollars in grant awards aimed at addressing the substance use crisis throughout the nation. In addition to these grants, OJP is awarding $34 million to help communities respond to public safety and public health emergencies, including crises that result from substance use disorders.

Below is a list of awards being made in Fiscal Year 2021 to address the opioid and stimulant crisis and the needs of individuals with substance use disorders:

• BJA is awarding more than $137 million under its Comprehensive Opioid, Stimulant and Substance Abuse Site-Based Program, which will help communities address the prevention, diversion, treatment and recovery needs of those affected by substance use disorders. Another $9.7 million is funding related training and technical assistance.
• More than $61.6 million under BJA’s Adult Drug and Veteran Treatment Court Program will help states, state courts, local courts and federally recognized tribal governments implement and enhance the operations of adult drug courts and veteran treatment courts. Another $15.7 million is funding related training and technical assistance.
• BJA is awarding $29.6 million to support the Residential Substance Abuse Treatment for State Prisoners Program, which helps states develop and implement residential substance use treatment programs, including medication assisted treatment within correctional and detention facilities.
• BJA is awarding nearly $29.6 million to fund the Harold Rogers Prescription Drug Monitoring Program, which enhances the capacity of regulatory and law enforcement agencies and public health officials to collect and analyze controlled substance prescription data and other scheduled chemical products through a centralized database administered by an authorized agency.
• OJJDP is awarding $16 million to support Mentoring for Youth Affected by the Opioid Crisis and Drug Addiction, which supports services for youth who are currently using or at-risk for using drugs or to youth with family members who have a substance use disorder.
• OJJDP is awarding more than $8.9 million to support the Opioid Affected Youth Initiative, which will support states, communities, tribes and nonprofits implementing programs and strategies that treat children, youth and families impacted by the opioid epidemic.
• OJJDP’s Juvenile Drug Treatment Court Program is awarding nearly $7.9 million to jurisdictions to establish or enhance juvenile drug treatment courts and to improve court system operations and treatment services.
• OJJDP is awarding $13.8 million across 14 jurisdictions under its Family Drug Court Program to build the capacity of state and local courts, units of local government and federally recognized tribal governments to implement family drug court practices. The program aims to increase collaboration with substance use treatment and child welfare systems to ensure the provision of treatment and other services that improve child, parent and family outcomes.

Once the awards are made, information about the grantees selected under each solicitation can be found online at the OJP Grant Awards Page.

The Office of Justice Programs provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims and enhance the rule of law. More information about OJP and its components can be found at www.ojp.gov.

The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission (FTC), filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia against Biglari Holdings Inc. (Biglari Holdings), a restaurant chain owner and investment fund operator.

The lawsuit alleges that Biglari Holdings violated the pre-transaction notification and waiting period requirements of the Hart-Scott-Rodino Act of 1976 (HSR Act) for two acquisitions of Cracker Barrel Old Country Store Inc. voting securities made on March 16, 2020. At the same time, the department filed a proposed settlement, subject to approval by the court, under which Biglari Holdings has agreed to pay a $1,374,190 civil penalty to resolve the lawsuit.

The HSR Act imposes notification and waiting period requirements for transactions meeting certain size thresholds so that they can undergo pre-transaction antitrust review. Federal courts can assess civil penalties for pre-transaction notification violations under the HSR Act in lawsuits brought by the department. The maximum civil penalty for an HSR Act violation, which is adjusted annually, is currently $43,792 per day.

Further details about this matter are described in the FTC’s press release issued today, and in the attached complaint and competitive impact statement.

Consistent with the requirements of the Tunney Act, the proposed settlement, along with the competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period via email to bccompliance@ftc.gov or by post to Maribeth Petrizzi, Special Attorney, United States, c/o Federal Trade Commission, 600 Pennsylvania Avenue, NW, CC-8416, Washington, D.C. 20580. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.

Attorney General Merrick B. Garland issued the following statement in reference to today’s Office of Legal Counsel opinion on home confinement:

“Thousands of people on home confinement have reconnected with their families, have found gainful employment, and have followed the rules. In light of today’s Office of Legal Counsel opinion, I have directed that the Department engage in a rulemaking process to ensure that the Department lives up to the letter and the spirit of the CARES Act. We will exercise our authority so that those who have made rehabilitative progress and complied with the conditions of home confinement, and who in the interests of justice should be given an opportunity to continue transitioning back to society, are not unnecessarily returned to prison.”

Three Houston-area pharmacists, a doctor, and a pharmacy technician have been arrested for allegedly running three pharmacies and two clinics as “pill mills;” distributing hydrocodone, oxycodone, and other controlled drugs without a legitimate medical purpose.

According to court documents, since January 2018, Chrisco Pharmacy (Chrisco), Keystone Pharmacy (Keystone), and Peoples Pharmacy (Peoples) illegally dispensed nearly four million pills of the Schedule II opioids hydrocodone and oxycodone. Keystone owner and pharmacist-in-charge Anthony Obute, 46, of Houston, was indicted yesterday in the U.S. District Court for the Southern District of Texas for illegally distributing and dispensing hydrocodone and the Schedule IV muscle relaxer carisoprodol. According to the filed criminal complaint leading to Obute’s arrest on Dec. 2, Obute operated Keystone as a pill mill, illegally distributing hydrocodone and oxycodone. The complaint further alleges that from about September 2018 to about September 2020, Obute directed Keystone to purchase around 1.1 million of the highest-strength, short-acting hydrocodone and oxycodone pills commercially available, which he then sold to so-called “crew leaders,” or drug traffickers who pay individuals to pose as patients in order to obtain pills to sell onto the black market.

Ophelia Emeakoroha, 50, of Pearland, was arrested on Dec. 2 on a criminal complaint, filed in the U.S. District Court for the Southern District of Texas, alleging that Emeakoroha, the pharmacist-in-charge at Peoples, illegally distributed and dispensed hydrocodone and oxycodone. According to court documents, from about Jan. 1, 2019, to about Dec. 31, 2019, Emeakoroha caused Peoples to purchase around 250,000 of the highest-strength, short-acting hydrocodone and oxycodone pills commercially available, which she then sold to crew leaders in a scheme similar to Keystone’s.

Shivarajpur Ravi, M.D., 65, of Houston, was arrested on Dec. 2 on a criminal complaint, filed in the U.S. District Court for the Southern District of Texas, alleging that he operated two pill-mill clinics in the Houston area, which he used to illegally distribute and dispense hydrocodone and carisoprodol. According to court documents, undercover officers obtained illegitimate prescriptions from Ravi, once in 2020 at his clinic operating out of 12555 Ste. B Gulf Freeway in Houston, and again at a new clinic located at 3333 Bayshore Dr., Ste. 250, Pasadena, which he opened in 2021. The papers detail how crew leaders were observed paying for groups of patients, filling out their paperwork, and coaching them on what to say to the doctor as they waited to be seen. The 2020 purported consult with Ravi is alleged to have lasted less than two minutes, after which officers had the prescription filled at Keystone. In both cases, the visit ended with Ravi prescribing large quantities of hydrocodone and carisoprodol.

A few weeks prior to the arrests of Obute, Emeakoroha, and Ravi, Christopher Obaze, 61, of Richmond, and Eric Tubbe, 36, of Rosenberg, were arrested on charges brought in the U.S. District Court for the Southern District of Texas related to their alleged illicit operation of Chrisco as a pill mill. The eight-count indictment alleged that in doing so, Obaze and Tubbe conspired to illegally distribute and dispense hydrocodone and oxycodone, maintained Chrisco as a drug-involved premises in proximity to a facility for children, and laundered their ill-gotten gains, using the proceeds to promote the enterprise, depositing cash in amounts below $10,000 to avoid bank reporting requirements, and transferring the proceeds through numerous accounts to obscure the funds’ origins. Obaze was also charged with tax crimes. According to court documents, from around January 2018, to around October 2021, Obaze was the pharmacist-in-charge and Tubbe was a pharmacy technician at Chrisco, which the two men used as a front to purchase and then illegally sell around 2.25 million of the highest-strength short-acting hydrocodone and oxycodone pills commercially available. The indictment alleges that Obaze and Tubbe sold the pills, in bulk, directly to drug traffickers, without the involvement of doctors, prescriptions, or patients.

Federal charges related to the illegal distribution of Schedule II opioids like hydrocodone and oxycodone, which all of the indicted defendants face, carry statutory maximums of 20 years in prison. Obaze and Tubbe are both charged with money laundering crimes that carry statutory maximums of 10 and 20 years in prison, while Obaze’s tax charges carry a statutory maximum of three years. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Administrator Anne Milgram of the Drug Enforcement Administration (DEA); Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division; Assistant Special Agent in Charge Ramsey E. Covington of the IRS Criminal Investigation (IRS-CI) Houston Field Office; Acting Special Agent in Charge Conrad Barnett of U.S. Postal Service Office of Inspector General (USPS-OIG); Acting Inspector in Charge Dana Carter of the U.S. Postal Inspection Service, Houston Division; Texas Attorney General Office’s Medicare Fraud Control Unit (MFCU); and Houston Police Department (HPD) made the announcement.

The DEA, HPD, FBI, MFCU, IRS-CI, USPS-OIG, and U.S. Postal Inspection Service are investigating the cases.

Trial Attorney Drew Pennebaker of the Criminal Division’s Fraud Section is prosecuting the cases.

Indictments and criminal complaints are merely allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

BANGOR, Maine: An Old Town man was sentenced in federal court today for possessing an unregistered firearm, U.S. Attorney Darcie N. McElwee announced.

U.S. District Judge Lance E. Walker sentenced Stephen Warren, 38, to four years and two months in prison and two years of supervised release. Warren pleaded guilty in July 2021.

According to court records, on September 8, 2020, Warren was stopped by an Old Town police officer. Warren was issued a summons for operating a motor vehicle with a suspended license and served with a protection order. Warren was told not to operate his car due to his suspended license. He ignored this order, however, and drove away from the area. Following a brief pursuit, Warren was stopped and arrested.

A subsequent inventory search of Warren’s car revealed a short-barreled shotgun without a serial number. The shotgun was not registered to him in the National Firearms Registration and Transfer Record (NFRTR). Federal law prohibits the possession of an unregistered weapon made from a shotgun if the modified weapon has a barrel less than 18 inches in length or an overall length of less than 26 inches.

“These firearms are more dangerous because they are easily concealed and devastating when used at close range,” said U.S. Attorney McElwee. “As a result, anyone who seeks to possess one of these weapons must comply with the registration requirements of the National Firearms Act.”

The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Old Town Police Department investigated the case as part of the Justice’s Project Safe Neighborhood (PSN) initiative.

PSN is a nationwide initiative that brings together federal, state, local and tribal law enforcement officials, prosecutors, community leaders and other stakeholders to identify the most pressing violent crime problems in a community and develop comprehensive solutions to address them.  PSN is coordinated by the U.S. Attorneys’ Offices in the 94 federal judicial districts throughout the 50 states and U.S. territories. PSN is customized to account for local violent crime problems and resources. Across all districts, PSN follows four key design elements of successful violent crime reduction initiatives: community engagement, prevention and intervention, focused and strategic enforcement, and accountability. 

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The Department of Justice’s Civil Rights Division announced today that it has concluded an investigation into whether Manson Youth Institution is violating the Eighth and Fourteenth Amendments of the U.S. Constitution and the Individuals with Disabilities Education Act (IDEA) with respect to children in the facility.

The department’s investigation concluded that there is reasonable cause to believe that Manson’s isolation practices and inadequate mental health services seriously harm children, under age 18, and place them at substantial risk of serious harm. In addition, Manson fails to provide adequate special education services to children with disabilities. These violations are pursuant to a pattern or practice of resistance to the full enjoyment of rights protected by the Constitution and federal law. 

“Children in adult correctional facilities do not forfeit their constitutional and federal rights,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Our investigation uncovered systemic evidence that children are deprived of the mental health and special education services they need to become productive, successful adults. When children misbehave, Manson frequently subjects them to harmful periods of isolation, despite evidence that children are uniquely vulnerable to the traumatic and lasting damage isolation causes. The Civil Rights Division is committed to protecting the constitutional rights of children in correctional facilities to ensure they have access to the resources these facilities are legally required to provide.”

The Civil Rights Division’s Special Litigation Section initiated the investigation pursuant to the Civil Rights of Institutionalized Persons Act and the Violent Crime Control and Law Enforcement Act of 1994, which together authorize the department to address a pattern or practice of deprivation of constitutional and federal rights of children confined to state or local government-run correctional facilities. Individuals with relevant information are encouraged to contact the department via phone at 1- 833-223-1565 or by email at Community.MYInstitution@USDOJ.GOV. 

The Civil Rights Division is committed to safeguarding the rights of children held in detention facilities across the country. For example, the division recently opened a statewide investigation of Texas’s secure juvenile facilities to examine whether Texas provides children confined in the facilities reasonable protection from physical and sexual abuse by staff and other residents, excessive use of chemical restraints and excessive use of isolation. The Texas investigation will also examine whether Texas provides adequate mental health care. In South Carolina, in another investigation involving a state juvenile justice facility, the division recently issued findings that the state fails to keep children reasonably safe from harm caused by punitive and excessive isolation, as well as harm inflicted by other children.

Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.

The Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the District of Massachusetts announced today that they have filed an amended complaint alleging that the Chicopee Housing Authority and its Executive Director, Monica Blazic, violated federal law by discriminating against residents based on race, national origin and disability. These allegations, which are significantly broader than those in the original complaint, include claims under the Fair Housing Act (FHA), the Americans with Disabilities Act (ADA) and the Rehabilitation Act. The original complaint, filed in April, alleged that the defendants had discriminated against one tenant because of her disability.

The amended complaint alleges that, since at least 2013, Blazic has made discriminatory statements to and about Black and Hispanic tenants, including using racial slurs to describe current and potential residents, indicating a preference against having Black and Hispanic residents and demanding that Spanish-speaking residents speak English. According to the department’s amended complaint, Blazic’s statements have intimidated and threatened Black and Hispanic tenants. The department also alleges that residents with disabilities who requested reasonable accommodations, such as transfers to first-floor or elevator-accessible units, have waited for years, even though the Housing Authority could have accommodated them.

“It is simply inexcusable for the head of a public housing authority to repeatedly use racial slurs and make other bigoted statements about Black and Hispanic residents, or for the housing authority to repeatedly violate the rights of residents with disabilities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division.  “The Department of Justice will vigorously pursue housing providers who use brazenly unlawful and discriminatory conduct to threaten and intimidate tenants.  All people deserve access to housing free from discrimination.”

“Bigotry has no place in public housing,” Acting U.S. Attorney Nathaniel R. Mendell of the District of Massachusetts. “We expect our public officials to operate with common decency and respect, not with bias and prejudice. That someone could operate in such an important public position and engaged in this conduct going on for so long, is disturbing.”

“Racial discrimination and discrimination against persons living with disabilities have absolutely no place in our country’s housing market, and those who discriminate must be held accountable,” said Principal Deputy Assistant Secretary Demetria McCain of the Department of Housing and Urban Development (HUD)’s Office for Fair Housing and Equal Opportunity. “HUD applauds the Justice Department for taking today’s action and will continue supporting its efforts to hold housing providers accountable when they fail to meet their obligations under the nation’s housing laws.”

The matter was originally investigated by HUD, which issued a charge of discrimination against the Housing Authority and Blazic after finding that they violated the FHA by failing to allow a tenant to transfer to a first-floor or elevator-accessible unit to accommodate her disability. After the department filed the lawsuit, HUD made a second referral under the ADA and the Rehabilitation Act after finding that this was not an isolated incident, but rather, the result of a systemic practice of discrimination based on disability. For example, the amended complaint alleges that the tenant applied for a transfer based on her disability in 2017, and since that time the Housing Authority offered 10 vacant apartments – any one of which could have accommodated the tenant – to other individuals.

The lawsuit seeks an order requiring the defendants to cease discrimination against any tenant based on race, national origin or disability, pay damages to individuals who were harmed by the defendants’ discriminatory conduct, pay civil penalties to the government to vindicate the public interest and modify policies and procedures, including those for responding to requests by residents to accommodate their disabilities.

Individuals who have information about this case can contact the U.S. Attorney’s Office by calling 1-617-275-756 or by emailing USAMA.CivilRights@usdoj.gov.

The Justice Department’s Civil Rights Division enforces the FHA, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status, and the ADA and the Rehabilitation Act, which prohibit discrimination because of disability. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals wishing to report discrimination in housing may call the Justice Department’s Housing Discrimination Tip Line at 1-833-591-0291 or submit a report online.

The Civil Rights Unit of the U.S. Attorney’s Office was established in 2015 with the mission of enhancing federal civil rights enforcement. For more information on the Office’s civil rights efforts, visit www.justice.gov/usao-ma/civil-rights.

On Dec. 16, following a bench trial in May 2021, a federal court in the District of Montana ruled that James Tarpey, a Montana-based attorney, is liable for approximately $8,465,000 in penalties for promoting a tax shelter involving improper deductions for donating timeshares.

In 2015, the government initially filed an action to enjoin Tarpey and others from engaging in a scheme of purportedly donating timeshare interests for large tax deductions. The court permanently barred Tarpey from promoting the timeshare donation scheme. The court also ruled that Tarpey made false statements resulting in tax avoidance. Tarpey agreed to an injunction in 2016, which remains in full effect.

According to court documents, Tarpey formed Project Philanthropy Inc. dba Donate for Cause (DFC) as a non-profit organization in 2006, and that “DFC allowed timeshare owners who faced burdensome timeshare fees and expenses to donate their unwanted timeshares.” The court found that Tarpey and others prepared appraisals for timeshares that were donated to DFC, and that Tarpey promised potential customers generous tax savings from donations of their unwanted timeshares. In a March 2019 order, the court concluded that the Treasury Regulations disqualified Tarpey and his appraisers from conducting timeshare appraisals for DFC because they “lacked sufficient independence[.]” The court further concluded that these “false appraisals resulted in tax avoidance” and that “Tarpey knew, or had reason to know, that” “he made false statements.” The court’s 2019 ruling left open the amount of Tarpey’s penalty, however.

In its final order, issued Dec. 16, the court ruled on the amount of the penalty. The court found that the gross income amount that Tarpey derived from the entire scheme was at least $19,623,437, and this would lead to a penalty of over $9.8 million.  However, the court agreed with the United States to limit the penalty against Tarpey to $8,465,000 (plus interest), the amount that the government had sought in its counterclaim.

Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Trial Attorneys Richard G. Rose, Harris J. Phillips and Gretchen E. Nygaard of the Tax Division litigated this case. IRS agents and the attorneys at the IRS Office of Chief Counsel provided support. 

Further information about the recent enforcement efforts of the Tax Division against unscrupulous tax-return preparers and tax-fraud promoters is available here on the Justice Department’s website. An alphabetical listing of persons enjoined from promoting tax schemes and preparing returns can be found on this page. If you become aware of an abusive tax scheme being promoted, please report it to the IRS.

A federal court in the Eastern District of Louisiana has permanently enjoined a Hammond tax return preparer from preparing federal income tax returns for others and from owning or operating any tax return business in the future.

According to the court order entered Dec. 20, Kenisha Callahan consented to entry of the injunction. The order requires that Callahan send notice of the injunction to her prior customers. The order also permits the United States to conduct post-judgment discovery to monitor Callahan’s compliance with the injunction.

The civil complaint filed against Callahan alleged that she reported fabricated income or losses, and false filing statuses, in order to maximize her customers’ earned income tax credit. Further, the complaint alleged that Callahan impermissibly lowered some of her customers’ tax liabilities by falsely claiming unreimbursed employee business expenses and charitable gifts for individuals who were not entitled to claim such deductions. 

Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

The Department of Justice and Consumer Financial Protection Bureau (CFPB) issued two joint letters today regarding important legal housing protections for military families. One letter was sent to landlords and other housing providers regarding protections for military tenants. A second letter was sent to mortgage servicers regarding military borrowers who have already exited or will be exiting COVID-19 mortgage forbearance programs in the coming weeks and months.

The letter to landlords and other housing providers reminds property owners of the important housing protections for military tenants, some of whom may have had to relocate or make other changes to their housing arrangements in response to the crisis. While military families enjoy the same legal protections and privileges afforded to all other homeowners and tenants, they also have additional housing protections under the Servicemembers Civil Relief Act (SCRA), which is enforceable by the Justice Department and servicemembers themselves.

The letter to mortgage servicers comes in response to complaints from military families and veterans on a range of potential mortgage servicing violations, including inaccurate credit reporting, misleading communications to borrowers and required lump sum payments for reinstating their mortgage loans. These complaints are being reviewed for compliance by the CFPB with the Coronavirus Aid, Relief and Economic Security (CARES) Act and other applicable requirements.

“The Department of Justice takes seriously its responsibility to safeguard the rights of servicemembers and veterans,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “While servicemembers carry the great burdens of this nation, they should not have to worry that their sacrifices will result in economic harm to their families. Mortgage servicers and landlords must ensure that they are in full compliance with federal laws intended to protect servicemembers and their families during military service.”

“The illegal foreclosures of military families in the last crisis was one of the financial industry’s worst failures,” said Director Rohit Chopra of CFPB. “The CFPB will be closely watching mortgage servicers and will hold them accountable for illegal tactics perpetrated against military families.”

During the COVID-19 pandemic, roughly 7.6 million homeowners entered forbearance. While the majority have resumed their regular mortgage payments, approximately 1.25 million borrowers – many of whom are military borrowers – remain in forbearance programs that will expire at the end of the year. Ensuring that mortgage servicers comply with their legal obligations is crucial, especially since a decade ago some large financial institutions illegally seized the homes of military families, sending their lives into a tailspin. These violations were a result of breakdowns in the mortgage servicing industry that were severe and widespread. The result was numerous settlements with regulators, including a $186 million settlement between the Justice Department and some of the country’s largest mortgage servicers.  

Servicemembers have several legal protections under the SCRA that are designed to enable them to devote their entire energy to the national defense. These include, for example, a prohibition on foreclosing on certain servicemembers’ mortgages without court orders, the ability for military families to terminate residential leases early, and without penalty, upon receipt of military orders, and a prohibition on evicting military families from their homes without court orders.  In addition, under the CARES Act and Regulation X, servicemembers and veterans have the same protections available to all mortgage borrowers. These include, for example, streamlined COVID hardship forbearance options, requirements that mortgages receiving a COVID-19 hardship forbearance be reported as “current” to credit reporting agencies if the loan was current before entering forbearance under the CARES Act and requirements in the Bureau’s Regulations X and Z for treatment of delinquent borrowers and borrowers who have applied for loss mitigation.

The Justice Department and CFPB are calling on mortgage servicers and landlords to ensure that military homeowners and tenants are safeguarded during the pandemic and benefit equally from the nation’s economic recovery.

Attorney General Merrick B. Garland today announced the Department of Justice will award $1.6 billion in grant awards to support a wide range of programs designed to reduce violent crime and strengthen communities. The grants, which are being distributed to communities and organizations throughout the nation, are administered by the department’s Office of Justice Programs (OJP).

“The Department of Justice is committed to supporting our state and local partners to combat crime across the country,” said Attorney General Garland. “This latest round of funding will deliver critical public safety resources, helping public safety professionals, victim service providers, local agencies and nonprofit organizations confront these serious challenges.” 

As law enforcement agencies address a range of public safety challenges – from violent crime to human trafficking to retail thefts – these awards will provide additional tools to advance violence intervention activities and evidence-based police and prosecution strategies. Funds are also intended to reduce recidivism, help people coming out of prisons and jails make the transition back into their communities and support responses to crises like drug overdoses and episodes involving mental illness. These grants build on earlier OJP investments, including more than $1.2 billion to support victim assistance and compensation programs, $187 million under the state formula Edward Byrne Memorial Justice Assistance Grants Program, more than $175 million in funding for victim services and public safety in American Indian and Alaska Native communities, over $21 million in grants to address hate crimes and $17.5 million in Project Safe Neighborhoods grants. The COPS office also funded the hiring of over 1,000 officers in 183 police departments this year.

Some of the awards address the rise in gun violence and other violent crime in communities across America, in alignment with the Biden-Harris Administration’s commitment in April. These grants help support the department’s Comprehensive Strategy for Reducing Violent Crime, announced in May, and will advance President Biden’s Comprehensive Strategy to Prevent and Respond to Gun Crime and Ensure Public Safety, released in June.

“These investments reflect a commitment that extends across this administration to invest in our neighborhoods, building bonds of civic trust and ending the cycle of trauma and violence that destroys too many lives and keeps far too many Americans from realizing their potential,” said Principal Deputy Assistant Attorney General Amy L. Solomon of OJP.

A full list of awards, as they are made, will be available on the OJP Grant Awards page.

The Office of Justice Programs provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims and enhance the rule of law. More information about OJP and its components can be found at www.ojp.gov.

The Justice Department today filed a lawsuit against Barnet Dulaney Perkins Eye Center PC (BDP), an optometry and ophthalmology medical provider, for discriminating against patients who, because of their disabilities, need assistance in transferring from their wheelchairs to the surgical table for outpatient eye surgery. BDP operates 24 facilities in Arizona.

The lawsuit, filed in the U.S. District Court for Arizona, alleges that BDP violated the Americans with Disabilities Act (ADA) by refusing to provide patients with disabilities the transfer assistance they need — assistance that is routinely provided by healthcare providers across the country. Instead, BDP requires these patients to hire third-party medical support personnel to transport them to and from BDP facilities and to provide transfer assistance at the facilities. Patients who are transported by third-party medical support personnel are brought into the facilities on gurneys or stretchers and are required to remain on them until surgery. This practice denies patients with disabilities full and equal access to BDP’s health care services and impermissibly imposes a disability-based surcharge on such patients by forcing them to pay extra for treatment.

“Discrimination on the basis of disability is unacceptable anywhere, and especially in the critically important area of health care,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “Discriminatory healthcare practices deny individuals with disabilities access to essential services and can delay needed treatment. Through this lawsuit, the department continues to vigorously enforce the ADA, which has prohibited discriminatory treatment by medical providers for more than 30 years.”

Through the lawsuit, the department asks the court to stop BDP from discriminating against individuals with disabilities, including by training its staff to provide patients with assistance in transferring to and from their wheelchairs. The department also seeks money damages for those people who were harmed by BDP’s discriminatory policy, including those who were forced to pay for third-party transfer assistance in order to receive services. 

If you believe that you or someone you know was required to pay for third-party medical support personnel to provide transfer assistance at or transportation to and from a BDP Eye Center, please contact 1-866-380-2003 (toll-free), or send an email to BDPEyeCenter@usdoj.gov. For more information on the ADA, please call the Department’s toll-free ADA Information Line at 1-800-514-0301 (TDD 800-514-0383) or visit www.ada.gov. For more information on the Civil Rights Division, please visit www.justice.gov/crt. The complaint can be viewed here.

Today, the Department of Justice announced that Team Telecom entered into National Security Agreements with Google LLC and its subsidiary GU Holdings Inc., and Meta Platforms Inc. (formerly known as Facebook Inc.) and its subsidiary Edge Cable Holdings USA LLC to protect data on the Pacific Light Cable Network (PLCN) system, an undersea fiber optic cable system that will connect the United States, Taiwan and the Philippines. 

The agreements were made with the Departments of Justice (DOJ), Defense (DOD), and Homeland Security (DHS) in their roles as members of the Committee for the Assessment of Foreign Participation in the U.S. Telecommunications and Services Sector (known informally as Team Telecom), and were coordinated with committee advisors listed in section 3(d) of Executive Order 13913 (2020). The Executive Branch has recommended that the Federal Communications Commission (FCC) condition any license to operate the PLCN system on compliance with the National Security Agreements.

“These agreements enable Google and Meta to take advantage of critical, additional cable capacity while protecting U.S. persons’ privacy and security through terms that reflect the current threat environment,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, who leads Team Telecom’s work for the Justice Department. “This resolution also demonstrates Team Telecom’s ability to resolve complex cases involving critical infrastructure in a timely matter, thanks to recent reforms of our structure and process.”

Under the National Security Agreements, Google and Meta (and their subsidiaries) have agreed to (among other terms):

• Conduct annual assessments of risk to sensitive data that transits the PLCN cable system, including when the data exits the cable;
• Pursue diversification of interconnection points in Asia, including but not limited to Indonesia, Philippines, Thailand, Singapore and Vietnam; and
• Restrict access to information and infrastructure by Pacific Light Data Communications Co. Ltd (PLDC), the Hong Kong-based owner of PLCN that withdrew its application for an FCC license.

In June 2020, the committee publicly recommended that the FCC partially deny a previous application for PLCN with respect to PLCN’s proposed connections to Hong Kong and to the portions of the PLCN owned by PLDC. Shortly after that recommendation, the applicants withdrew the original PLCN application. Google’s and Meta’s subsidiaries then filed a new FCC application removing Hong Kong and seeking to operate only the United States, Taiwan and Philippines portions of PLCN. 

The National Security Agreements are justified by the current national security environment, including:

• the PRC government’s sustained efforts to acquire the sensitive personal data of millions of U.S. persons;
• the PRC government’s access to other countries’ data through both digital infrastructure investments and recent PRC intelligence and cybersecurity laws; and
• changes in the market that have transformed subsea cable infrastructure into increasingly data-rich environments that are vulnerable to exploitation.

Through appropriate mitigation agreements like these, the committee seeks to protect the national security interests of the United States while preserving global access to U.S. information and communications technology systems. 

The committee was established pursuant to Executive Order 13913, and the Attorney General’s role as Chair of the Committee is carried out by the Department of Justice’s National Security Division, Foreign Investment Review Section. The Department of Homeland Security and the Department of Defense are fellow members of the committee. More information concerning the agreements is available on the FCC’s International Bureau Filing System (IBFS), under Docket Number SCL-LIC-20200827-00038.

Associate Attorney General Vanita Gupta issued the following statement regarding the settlement reached between the U.S. Postal Service and the NAACP:

“The right to vote and ability to access the ballot is the cornerstone of our democracy. The department is pleased we could facilitate a resolution that reflects the commitment of all of the parties to appropriately handling and prioritizing election mail.”

Attorney General Merrick B. Garland hosted the U.S.-EU Justice and Home Affairs Ministerial at the Department of Justice on Dec. 16, 2021. Joined by Secretary of Homeland Security Alejandro Mayorkas, the Attorney General welcomed Commissioner for Justice and Consumer Affairs Didier Reynders, Commissioner for Home Affairs Ylva Johansson, and Slovenian Ministers for Justice Marjan Dikaučič and for Home Affairs Aleš Hojs representing the Presidency of the EU Council. Other senior EU officials who participated in person or remotely, included the Director of Europol, President of Eurojust and EU Counterterrorism Coordinator. A joint statement was issued following the meeting, which can be found here: /media/1181601/dl?inline

Attorney General Garland and Secretary of Homeland Security Mayorkas are joined by EU Commissioners, Presidency of the EU Council and others at U.S.-EU Justice and Home Affairs Ministerial.

 

Four Indianapolis-area small business lending executives, all of whom worked for Banc-Serv Partners LLC (Banc-Serv) — a defunct lending service provider — were sentenced this month in the Southern District of Indiana for a 13-year conspiracy to defraud the Small Business Administration (SBA) in connection with its programs to guarantee loans made to small businesses. 

Kerri Agee, 46, of Carmel, Banc-Serv’s former president, founder, and owner, was sentenced to 68 months in prison; Kelly Isley, 41, of Westfield, Banc-Serv’s former chief operating officer, was sentenced to 57 months; Chad Griffin, 48, of Carmel, Banc-Serv’s former chief marketing officer, was sentenced to 28 months; and Matthew Smith, 53, of Brownsburg, Banc-Serv’s co-founder and a former director of Bridge Business Bancorp, a lending institution that originated loans with Banc-Serv, was sentenced to 46 months. One additional co-conspirator, Nicole Smith, 44, of Indianapolis, is scheduled to be sentenced on Jan. 7, 2022. These defendants were convicted following a two-week jury trial in the U.S. District Court for the Southern District of Indiana. Agee, Isley, Griffin, and Nicole Smith were each convicted of one count of conspiracy to commit wire fraud affecting a financial institution. Additionally, Agee was convicted of four counts of wire fraud affecting a financial institution, and Isley and Nicole Smith were convicted of two counts of wire fraud affecting a financial institution. Matthew Smith was convicted of one count of conspiracy to commit wire fraud.

According to court documents and the evidence produced at trial, the defendants fraudulently obtained SBA-guaranteed loans on behalf of their clients, knowing that the loans did not meet SBA’s guidelines and requirements for the guarantees. The evidence at trial proved that from approximately 2004 until October 2017, the defendants helped originate SBA loans through Banc-Serv on behalf of various financial institutions and other lenders. On multiple occasions, they fraudulently obtained SBA guarantees for loans they knew to be ineligible. They did so by, among other things, knowingly misrepresenting what the loans would be used for, concealing disqualifying facts about the borrowers, and unlawfully diverting previously denied loan applications into expedited approval channels at the SBA. When the fraudulently guaranteed loans defaulted, the defendants caused the submission of reimbursement requests to the SBA to purchase the defaulted loans from investors and lending institutions, shifting a majority of the losses on the ineligible loans to the SBA.

“Fraud against SBA loan programs directly harms taxpayers and undermines the public’s faith in in important community programs.” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The Criminal Division is committed to prosecuting the offenders who exploit these programs and abuse the public trust.”

“These sentences hold the defendants accountable for their egregious conduct to cheat a government-guaranteed loan program — by lying on loan documentation, concealing key information, and asking the government to pay for defaulted loans,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation (FDIC). “We remain committed to working with our law enforcement partners and investigating those who seek to exploit federal programs and undermine the integrity of our nation’s banks.”

“Making false statements to fraudulently gain access to SBA program funds is deplorable and it is unconscionable that anyone would steal from a program intended to help hard working Americans keep their businesses afloat,” said Acting Special Agent in Charge Gregory Nelsen of FBI Indianapolis. “The FBI and our partners will continue to work diligently to identify and pursue those engaged in such illegal activity and ensure they are no longer in a position to defraud anyone.”

“Conspiring to defraud any SBA program is a blatant attempt to selfishly rob the nation’s diverse small businesses community from supports that assist them to grow and build our strong economy,” said Special Agent in Charge Sharon Johnson of the SBA Office of Inspector General’s (OIG) Central Region. “OIG remains committed to rooting out bad actors and protecting the integrity of SBA programs every day. I want to thank the Department of Justice and our law enforcement partners for their dedication and pursuit of justice.”

In addition to their prison sentences, all four defendants were ordered to pay restitution to the SBA. Agee and Isley were each ordered to pay $2,289,681, Griffin was ordered to pay $685,022, and Matthew Smith was ordered to pay 1,651,450.

The FDIC Office of Inspector General, FBI, and SBA-OIG investigated the case.

Assistant Chief William E. Johnston and Trial Attorneys Vasanth Sridharan and Brandon Burkart of the Criminal Division’s Fraud Section prosecuted the case. The Department of Housing and Urban Development Office of Inspector General also assisted in the investigation.

A federal jury convicted a Florida man today for preparing false tax returns for his clients.

According to court documents and evidence presented at trial, Fred Pickett Jr., 54, of Belle Glade, owned and operated a tax return business that he used to prepare false individual income tax returns. From 2013 to 2016, Pickett created tax returns for some of his clients claiming they owned fictitious businesses that lost tens of thousands of dollars each year. Pickett included these made-up companies, as well as other false deductions and tax credits, on clients’ tax returns to generate refunds they were not entitled to receive.

At trial, Pickett was convicted of 22 counts of aiding and assisting the preparation of false tax returns. He is scheduled to be sentenced on March 8, 2022, and faces a maximum penalty of three years in prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Special Agent-in-Charge Matthew Line of IRS Criminal Investigation (IRS-CI), Miami Field Office, made the announcement.

IRS-CI investigated the case.

Trial Attorneys Parker Tobin and Patrick Elwell of the Tax Division prosecuted the case.

The Department of Justice’s Antitrust Division announced today that it is seeking additional public comments until Feb. 15, 2022, on whether and how the division should revise the 1995 Bank Merger Competitive Review Guidelines (Banking Guidelines). The division will use additional comments to ensure that the Banking Guidelines reflect current economic realities and empirical learning, ensure Americans have choices among financial institutions, and guard against the accumulation of market power. The division’s continued focus on the Banking Guidelines is part of an ongoing effort by the federal agencies responsible for banking regulation and supervision.

“The Antitrust Division shares with its federal partners an interest in ensuring bank mergers do not harm competition and the competitive process,” said Assistant Attorney General Jonathan Kanter of the Antitrust Division. “I commend Director Chopra for his leadership in this area, and look forward to reviewing updated comments as the division undertakes this important review. I am grateful to those stakeholders who participated in the public comment process so far, and I invite them and any other interested parties to remain engaged in it.”

On Sept. 1, 2020, the division issued a press release seeking comments on whether and how the Banking Guidelines should be revised. The call for public comment included six specific questions, including whether any new guidance should be bank-specific, whether any new bank merger guidance should be jointly issued, whether the 1800/200 Herfindahl-Hirschman Index (HHI) screen should be updated, and whether there should be a de minimis exception. Building on the responses, the updated call for comment focuses on whether bank merger review is currently sufficient to prevent harmful mergers and whether it accounts for the full range of competitive factors appropriate under the laws.

As part of its ongoing review, the division invites interested persons, including banks, other financial institutions, small businesses, small and local banks, laborers and workers, and other industry stakeholders, to provide information or comments relevant to whether the division should revise the Banking Guidelines or change the way it analyzes bank mergers to reflect modern trends in financial services and banking competition. In particular, the division seeks public comments on the issues found in the Antitrust Division Banking Guidelines Review - Public Comments Topics & Issues Guide. The division has and will continue to consult with the Federal Reserve, the Office of the Comptroller of Currency and the Federal Deposit Insurance Corporation, and will review and consider public comments before deciding on the most appropriate course of action.

Comments on the Banking Guidelines can be emailed to ATR.BankMergers@usdoj.gov and must be received no later than Feb. 15, 2022.

Alcoa Corporation and Howmet Aerospace, successors to Alcoa Incorporated, and the City of East St. Louis, Illinois, will clean up hazardous waste disposal sites surrounding Alcoa’s former aluminum manufacturing plant in East St. Louis to resolve federal liability. The settlement will require the companies to clean up radium, arsenic, chromium, lead and other hazardous substances detected in soils at an estimated cost of $4.1 million and reimburse all future costs incurred by the United States in overseeing the cleanup. The complaint filed simultaneously with the proposed consent decree alleges that defendants are liable for the cleanup of hazardous wastes generated by and disposed of on and around the site of the Aluminum Company of America’s aluminum manufacturing and production plant that operated from 1903 until 1957.

“Today’s settlement ensures that Alcoa will continue to clean up the hazardous wastes its industrial activities left behind more than 60 years ago,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The work to be performed under this settlement will protect nearby residents and the environment from any future exposure to the hazards from the former plant operations.”

“For many decades, the residents of East St. Louis have lived near hazardous wastes located at the former Alcoa aluminum production site,” said Acting Assistant Administrator Larry Starfield of the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance. “Today’s settlement means a safer environment for neighboring communities, including communities that have been historically overburdened by pollution.”

Under the settlement, Alcoa Corporation and Howmet Aerospace, and the City of East St. Louis, which owns some of the property, will be required to implement the cleanup remedy selected by EPA for over 180 acres designated as Operable Unit 2, by excavating approximately 40,000 cubic yards of near-surface hazardous waste material to a depth of at least two feet, consolidating it with other waste from the former plant, and covering it with a minimum of two feet of clean soil that will be seeded to meet the requirements of applicable Illinois regulations. Stormwater controls also will be installed or reconfigured to protect local properties. This remedy follows on the cleanup of the adjacent Operable Unit 1, which is 220 acres of the former plant facility. Any groundwater contamination will be the subject of future investigation by EPA.

More information about this settlement can be found at: https://cumulis.epa.gov/supercpad/cursites/csitinfo.cfm?id=0508010.

The consent decree, lodged in the U.S. District Court for the Southern District of Illinois, is subject to a 30-day public comment period and final court approval. The consent decree will be available for viewing at https://www.justice.gov/enrd/consent-decrees.

Attorney General Merrick B. Garland issued the following statement regarding the U.S. District Court's decision to invalidate the Purdue Pharma bankruptcy plan:

"We are pleased with the District Court’s decision invalidating the Purdue Pharma bankruptcy plan. The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family. The department remains committed to opioid abatement efforts and supporting victims of opioid abuse."

Note: The defendants in this case, Mahesh Patel, Robert Harvey, Harpreet Wasan, Steven Houghtaling, Tom Edwards, and Gary Prus were acquitted by the court of the charges alleged in the indictment described in the press release below.

A federal grand jury in Bridgeport, Connecticut, returned an indictment yesterday charging a former manager of a major aerospace engineering company and five executives of outsource engineering suppliers (Suppliers) for participating in a long-running conspiracy to restrict the hiring and recruiting of employees among their respective companies. The conspiracy affected thousands of engineers and other skilled workers in the aerospace industry who perform services in the design, manufacturing and servicing of aircraft components for both commercial and military purposes.

According to the one-count felony indictment unsealed today in the U.S. District Court for the District of Connecticut, six individuals — Mahesh Patel, of Connecticut; Robert Harvey, of South Carolina; Harpreet Wasan, of Connecticut; Steven Houghtaling, of Connecticut; Tom Edwards, of Connecticut; and Gary Prus, of Florida — conspired with unnamed others to allocate employees by agreeing not to hire or solicit employees from each other’s companies. 

This indictment is the first in an ongoing investigation into labor market allocation in the aerospace engineering services industry. Patel, described as a leader of the conspiracy given his position and authority as the Suppliers’ common customer, was previously charged by complaint. He was arrested and appeared before a federal magistrate judge on the charge last week, and was released on a $100,000 appearance bond. The remaining defendants are expected to appear before federal district courts in different districts this week.

“Conduct that corrupts competition for workers has no place in our economy,” said Assistant Attorney General Jonathan S. Kanter of the Department of Justice’s Antitrust Division. “Our investigation revealed a prolonged and widespread scheme to deprive aerospace workers of the ability to plan their own careers and earn competitive pay. The Department of Justice and our law enforcement partners will continue to hold individuals and companies accountable for criminal conduct aimed at depriving workers of the myriad benefits that flow from competition.”

“No one should be illegally denied the opportunity to pursue better jobs, higher pay and greater benefits,” said Peter S. Jongbloed, Counsel to the U.S. Attorney for the District of Connecticut. “It is vital that the labor market in the defense and aerospace remain fair, open and competitive, and we look forward to continuing the partnership with the Antitrust Division and our law enforcement partners to prosecute this important case.”

“Anticompetitive practices undermine legitimate procurement and acquisition processes designed to ensure equity among parties that do business with the government. The DoD Office of Inspector General’s Defense Criminal Investigative Service (DCIS) is fully committed to prioritizing investigations involving corruption of the DoD labor market,” said Principal Deputy Director James R. Ives of the DCIS. “We will continue to partner with the Department of Justice to ensure the labor market that supplies goods and services to the U.S. military remains competitive.”   

According to the indictment, the defendants and co-conspirators recognized the mutual financial benefit of the conspiracy — namely, reducing the rise in labor costs that would occur when aerospace workers were free to find new employment in a competitive environment. Patel and certain other co-conspirators explicitly appealed to this financial benefit when communicating with each other about the agreement.

The maximum penalty under the Sherman Act for a conspiracy to restrain trade is 10 years of imprisonment and a fine of $1 million. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  

The charges are the result of an ongoing federal antitrust investigation into labor market allocation in the aerospace engineering services industry, conducted by the Antitrust Division’s New York Office, the U.S. Attorney’s Office for the District of Connecticut, and the New Haven and New York Resident Agencies of DCIS. Anyone with information in connection with this investigation should contact the Antitrust Division’s Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.

An indictment merely alleges that a crime has been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

ST. LOUIS – United States District Court Judge Stephen R. Clark accepted a plea of guilty from Dallas Crawford on yesterday’s date for receiving child pornography.  A grand jury in the Eastern District of Missouri previously indicted Crawford in September 2020.  Sentencing is scheduled for April 14, 2022. 

According to the plea agreement, on October 12, 2018, the FBI was contacted by the father of a twelve-year-old minor who had recently been in contact with a person he believed to be an adult via the Snapchat social media application. The parents became aware of the relationship while reviewing the victim's electronic devices.  The father believed that pornographic images had been sent via the Snapchat social media platform.

Agents identified Crawford as the user of the account and a search warrant was obtained and served on Crawford's home in Pennsylvania on April 24, 2019.  Several electronic devices were seized from Crawford.  A subsequent search revealed files of child pornography.  In addition, Crawford received images and videos of child pornography over the internet. Specifically, via social media applications like Snapchat. 

The case was investigated by the St. Louis County Police Department and the Federal Bureau of Investigation. 

A Texas woman and an Austrian national were sentenced yesterday to 151 months in prison for a $27 million Medicare kickback conspiracy.

According to the evidence presented at trial, Leah Hagen, 50, of Arlington, and Michael Hagen, 54, a citizen of Austria and Arlington resident, owned and operated two durable medical equipment (DME) companies, Metro DME Supply LLC and Ortho Pain Solutions LLC. From March 2016 to January 2019, the defendants paid kickbacks and bribes to their co-conspirator’s call center in the Philippines in exchange for signed doctors’ orders for DME that were used to submit false claims in excess of $59 million to Medicare. From those claims, Medicare paid the defendants more than $27 million. The defendants transferred millions of dollars overseas to, among other things, purchase a home in Spain.

To conceal the payments of kickbacks and bribes from the authorities, the defendants, through their DME companies, signed sham contracts that disguised payments as marketing and business process outsourcing. The DME claims submitted by the defendants to Medicare were for services that were medically unnecessary and not provided as represented. In some cases, beneficiaries were convinced to accept braces they did not need or want and were offered gift cards in exchange for accepting those braces.

On July 8, the Hagens were convicted following an eight-day trial on charges of conspiracy to defraud the United States and to pay and receive health care kickbacks and conspiracy to launder money. The Hagens were sentenced by U.S. District Judge Jane J. Boyle of the Northern District of Texas, who also ordered them to pay $27,104,359 in restitution.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Chad E. Meacham of the Northern District of Texas; Special Agent in Charge Miranda Bennett of the Department of Health and Human Services, Office of the Inspector General’s (HHS-OIG) Dallas Region; Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division; and Special Agent in Charge Matthew J. DeSarno of the FBI’s Dallas Field Office made the announcement.

This case was investigated by HHS-OIG and the FBI’s Dallas Field Office and was brought as part of Operation Brace Yourself, a federal law enforcement action led by the Health Care Fraud Unit of the Criminal Division’s Fraud Section, in partnership with the U.S. Attorney’s Offices for the District of South Carolina, District of New Jersey, and the Middle District of Florida. 

Assistant Deputy Chief Adrienne Frazior and Trial Attorneys Brynn Schiess and Catherine Wagner of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Over the past 10 months, the Department of Justice has filed criminal charges against 10 defendants for kickback schemes at substance abuse treatment facilities in Orange County, California.  

The defendants in these cases are substance abuse facility owners and patient recruiters who allegedly, among other things, provided kickback payments for the referral of patients to substance abuse treatment facilities, recovery homes or laboratories. These facility owners allegedly assigned a value to patients depending on the type of insurance the patients had and paid patient recruiters kickbacks for each patient the recruiters referred to their addiction treatment facilities. The recruiters allegedly received recurring payments for each month the patients continued to receive purported services from the facilities.

“These cases reflect the continued efforts of the Department of Justice to combat fraud by substance abuse treatment facilities and patient recruiters,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “These schemes take advantage of vulnerable members of our society — addiction patients seeking help. These cases illustrate, the government’s commitment to protecting patients and prosecuting those who try to victimize them.”

“Driven by greed, dishonest operators of substance abuse treatment centers have invaded Southern California, but a coalition of law enforcement entities have responded forcefully,” said U.S. Attorney Tracy L. Wilkison for the Central District of California. “These corrupt individuals pay illegal kickbacks to obtain insured patients whose health plans pay generous benefits intended to cover legitimate treatments and tests. While many recovery facilities offer much-needed services to addicts, those targeted in this sweep take advantage of our nation’s opioid crisis by fueling a patient-selling network more interested in generating profits than giving help to vulnerable people.”

“The defendants in these cases were more interested in extracting profits and exploiting patients than helping those in need,” said Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division. “Kickback schemes undermine the integrity of our health care system by rewarding a focus on profits over patient care. The FBI and our law enforcement partners are committed to protecting America’s health care system and the citizens relying on it.”

“It is unconscionable when owners and operators of substance abuse facilities abuse the systems designed to help patients recover from addiction,” said Special Agent in Charge Amy K. Parker of the Office of Personnel Management Office of the Inspector General (OPM-OIG). “We are extremely proud of our dedicated staff and federal law enforcement partner’s commitment to pursuing improper and illegal conduct that places vulnerable health care consumers at risk.”

“The suspects in this case specifically targeted vulnerable individuals in recovery and sold them as a commodity with no concern for their health or wellbeing,” said California Insurance Commissioner Ricardo Lara. “Receiving kickbacks for patient referrals endangers lives and has no place in our health care system.”

Case Summaries

• According to court documents on Dec. 16, Nick Roshdieh, 51, of Aliso Viejo, California, and Vincent Bindi, 66, of Laguna Nigel, California, owned Crest Recovery LLC, dba Truvida Recovery (Truvida), and were arrested after being charged by indictment on Dec. 15 with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and paying kickbacks for referrals to clinical treatment facilities. Donald Vawter, 30, of Rancho Santa Margarita, California, was an employee of Truvida and was charged in the indictment with conspiring to pay and receive kickbacks for referrals to a substance abuse treatment facility and paying kickbacks for referrals to a substance abuse treatment facility. Michael Hislop, 56, of Boston, Massachusetts, a patient recruiter, was also charged in the indictment with conspiracy to offer and pay kickbacks for referrals to a substance abuse treatment facility and receiving kickbacks for referrals to a substance abuse treatment facility. If convicted, Roshdieh and Bindi face a maximum total penalty of 65 years in prison, and Vawter and Hislop face a maximum total penalty of 35 years in prison. The cases are being prosecuted by Trial Attorney Alexandra Michael of the Los Angeles Strike Force and Assistant U.S. Attorney Gina Kong of the Santa Ana Branch Office.
• Casey Mahoney, 45, of Los Angeles, and Joseph Parkinson, 32, formerly of Costa Mesa, California, were charged by indictment on Oct. 6 for a multimillion-dollar addiction treatment kickback scheme. According to court documents, Mahoney controlled Healing Path Detox LLC and Get Real Recovery Inc., addiction treatment facilities in Orange County, and allegedly paid approximately $2.7 million in kickbacks paid to Parkinson and other patient recruiters in exchange for addiction treatment patient referrals. Mahoney is charged with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities, paying kickbacks for referrals to clinical treatment facilities, and money laundering for fraudulently transferring kickback funds to an account held in the name of a patient broker’s mother. Parkinson, a patient recruiter, was charged with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities, receiving kickbacks for referrals to clinical treatment facilities, currency structuring, and possession with intent to distribute fentanyl. If convicted, Mahoney faces a maximum total penalty of 35 years in prison and Parkinson faces a maximum total penalty of 165 years in prison. The case is being prosecuted by Assistant U.S. Attorney Benjamin Barron, Chief of the Santa Ana Branch Office, and Trial Attorney Justin Givens of the Los Angeles Strike Force.
• Darius Moore, 28, formerly of Santa Ana, California, was charged by complaint on March 29, and later by indictment on April 28, with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and receiving kickbacks for referrals to clinical treatment facilities. According to court documents, Moore, a patient recruiter, referred patients to multiple addiction treatment facilities in Orange County, in exchange for kickback payments from the facilities and was paid not less than $488,500 in kickbacks in exchange for his referral of patients for purported addiction treatment services. On Dec. 10, Moore pleaded guilty to one count of conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and one count of receiving kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on May 13, 2022, and faces a maximum total penalty of 15 years in prison. The case is being prosecuted by Assistant U.S. Attorney Benjamin Barron, Chief of the Santa Ana Branch Office, and Trial Attorney Justin Givens of the Los Angeles Strike Force.
• Adrian Gonzalez, 37, of Laguna Hills, California, was charged by information on June 25, with paying kickbacks for referrals to clinical treatment facilities. According to court documents, Gonzalez controlled Stone Ridge Recovery Inc. and Landmark Recovery LLC, addiction treatment facilities in Orange County, and paid at least $1,080,000 in kickbacks to patient recruiters for the referral of addiction treatment patients to Gonzalez’s facilities. On Aug. 6, Gonzalez pleaded guilty to paying kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on Jan. 28, 2022, and faces a maximum penalty of 10 years in prison. The case is being prosecuted by Assistant U.S. Attorney Benjamin Barron, Chief of the Santa Ana Branch Office, and Trial Attorney Justin Givens of the Los Angeles Strike Force.
• Dorian Ballough, 30, formerly of Costa Mesa, California, was charged by information on July 30 with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and receiving kickbacks for referrals to clinical treatment facilities. According to court documents, Ballough acted as a patient recruiter for multiple addiction treatment facilities in Orange County, for which Ballough was paid at least $1.8 million in kickbacks in exchange for his referral of patients for purported addiction treatment services. On Nov. 12, Ballough pleaded guilty to one count of conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and one count of receiving kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on April 8, 2022, and faces a maximum total penalty of 15 years in prison. The case is being prosecuted by Assistant U.S. Attorney Benjamin Barron, Chief of the Santa Ana Branch Office, and Trial Attorney Justin Givens of the Los Angeles Strike Force.
• Kyle Reed, 29, formerly of Huntington Beach, California, was charged by information on July 30, with conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and receiving kickbacks for referrals to clinical treatment facilities. According to court documents, the charges relate to Reed’s role as a patient recruiter for multiple addiction treatment facilities in Orange County, for which Reed was paid at least $604,474 in kickbacks in exchange for his referral of patients for purported addiction treatment services. On Nov.19, Reed pleaded guilty to one count of conspiracy to pay and receive kickbacks for referrals to clinical treatment facilities and one count of receiving kickbacks for referrals to clinical treatment facilities. He is scheduled to be sentenced on May 6, 2022, and faces a maximum total penalty of 15 years in prison. The case is being prosecuted by Assistant U.S. Attorney Benjamin Barron, Chief of the Santa Ana Branch Office, and Trial Attorney Justin Givens of the Los Angeles Strike Force.

A federal district court judge will determine any sentence for the defendants after considering the U.S. Sentencing Guidelines and other statutory factors.

The Sober Homes Initiative in Southern California is led by the Health Care Fraud Unit’s Los Angeles Strike Force of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California, and was coordinated by Assistant Chief Niall O’Donnell of the Health Care Fraud Unit and Benjamin Barron, Chief of the U.S. Attorney’s Office’s Santa Ana Branch Office. 

The FBI Los Angeles Field Office, OPM-OIG, and the California Department of Insurance are investigating the cases.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Online background report company MyLife.com Inc. (MyLife) and its founder and chief executive officer, Jeffrey Tinsley, have agreed to pay $21 million in consumer redress and to injunctive relief that would require them to comply with the Federal Trade Commission Act (FTC Act), the Telemarketing Sales Rule (TSR), the Restore Online Shoppers Confidence Act (ROSCA) and the Fair Credit Reporting Act (FCRA) in all current and future business activities. The agreement follows an order issued by a federal district court in the Central District of California on Oct. 19, awarding partial summary judgment to the government. That order found that MyLife violated the FTC Act, the TSR and ROSCA; that MyLife was liable for $33.9 million in consumer redress; and that injunctive relief would be appropriate to prevent further violations of these laws. 

In the complaint filed on July 27, 2020, the government alleged that the defendants sold subscriptions to their website’s consumer background report service by implying, often falsely, that individuals had criminal records that could be viewed only by buying a subscription. According to the complaint, the defendants also misrepresented or failed to disclose material terms of those subscriptions, including that payment for multiple months was charged upfront, that subscriptions would automatically renew, and that the subscription or automatic renewal could be cancelled only by calling a customer service center that prevented or discouraged cancellations.  The complaint also alleged that defendants were violating FCRA because they promoted use of their background reports, and knew consumers used the reports, for employment decisions, tenant screening or other prohibited purposes, but they lacked reasonable procedures to ensure maximum possible accuracy of their background reports or to determine who was using them and why. For all claims, the government sought civil penalties, consumer redress and injunctive relief from both MyLife and Tinsley. 

“The Department of Justice and the FTC work hard to protect consumers from deceptive sales practices like those at issue here,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “This is a win for consumers, who should not be subjected to misleading statements and marketing tactics.”

“MyLife lured consumers into hard-to-cancel negative-option subscriptions by preying on fears that MyLife’s reports would harm their reputations or ability to find jobs or housing,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “These extortionary tactics broke the law, and MyLife and its CEO have been banned from negative option marketing and ordered to clean up their practices.”

After filing the complaint, the government substantially prevailed on a motion for summary judgment. In particular, the court found that MyLife engaged in deceptive acts in violation of the FTC Act by misleading consumers with representations that millions of individuals have arrest or criminal records, even though MyLife lacked information to substantiate those claims. The court also found that MyLife violated the TSR by engaging in sales calls with consumers that failed to disclose material terms and conditions of a MyLife subscription, such as its automatic renewal feature. The court further found that MyLife violated ROSCA by failing to provide a simple cancellation mechanism for consumers whose subscriptions automatically renewed. The court also granted the government’s request for consumer redress, concluding that a total redress award of $33.9 million was appropriate for MyLife’s TSR and ROSCA violations.

Following the court’s summary judgment ruling, MyLife and Tinsley agreed to the stipulated order entered today by the court, which imposes significant prohibitions on them and any other present or future companies they own or control. The provisions bar MyLife and Tinsley from misrepresenting consumers’ legal backgrounds and expressly prohibit them from stating directly or by implication that a traffic citation is a criminal or arrest record. The order also bans MyLife and Tinsley from using a negative-option automatic renewal feature in their current and future business activities. The order includes 20-year compliance and reporting requirements.

The order also includes a $33.9 million total judgment against MyLife and Tinsley, representing the entire amount of consumer redress sought by the government and found appropriate by the court on summary judgment. Tinsley will personally pay $5 million of this sum, with MyLife liable for the remainder. The amount MyLife will pay will be suspended to $16 million, with the suspension to be lifted, if the court finds that either defendant materially misrepresented their financial status or if MyLife fails to make its required payments.

The case was handled by attorneys in the Civil Division’s Consumer Protection Branch, including Senior Litigation Counsel Patrick Runkle and Claude Scott, Trial Attorneys Zachary Dietert, Rachel Baron and Zachary Cowan, and Assistant Director Lisa Hsiao, in conjunction with Andrea Arias, Jamie Elliott Hine, Whitney Moore and Robert Schoshinski at the FTC Division of Privacy and Identity Protection. 

The United States and Australia today signed a landmark agreement that will facilitate access to electronic data for investigations of serious crime, including terrorism and child sexual abuse.

The agreement is authorized by the Clarifying Lawful Overseas Use of Data (CLOUD) Act, a bill Congress passed in 2018. 

The CLOUD Act Agreement will help ensure Australian and U.S. law enforcement agencies are able to timely access electronic data to prevent, detect, investigate and prosecute serious crime, including child sexual abuse, ransomware attacks, terrorism and the sabotage of critical infrastructure over the internet.

The CLOUD Act Agreement enables authorities in each country to obtain certain electronic data more efficiently from communications service providers operating in the other’s jurisdiction, thereby significantly reducing the time taken to obtain information relevant to ongoing investigations. The agreement also includes strong protections for the rule of law, privacy and civil liberties.

“This Agreement paves the way for more efficient cross-border transfers of data between the United States and Australia so that our governments can more effectively counter serious crime, including terrorism, while adhering to the privacy and civil liberties values that we both share,” said U.S. Attorney General Merrick B. Garland.

U.S. Attorney General Garland and Australian Minister for Home Affairs Karen Andrews said the agreement would enhance law enforcement cooperation and help keep communities in both countries safe, while protecting the values, principles and sovereignty of the United States and Australia.

“As we saw in Operation Ironside – known in the United States as Operation Trojan Shield – the Australian Federal Police and the FBI are already capable of smashing serious, organized crime networks using sophisticated digital techniques,” said Minister Andrews. “By strengthening both nations’ ability to fight crime, and giving our law enforcement agencies more efficient access to evidence, we’re ensuring the safety, security and prosperity of our citizens.”

The CLOUD Act Agreement will now undergo Parliamentary and Congressional review processes in both countries.

For more information on the CLOUD Act, please visit:  and https://www.justice.gov/dag/cloudact.

The Justice Department announced today that Derek Chauvin, 45, pleaded guilty in federal court to two violations of a federal civil rights statute.

First, defendant Chauvin pleaded guilty to willfully depriving, while acting under color of law, George Floyd of his constitutional rights, resulting in Mr. Floyd’s bodily injury and death. Defendant Chauvin also agreed that the appropriate sentencing base offense level for this crime is second-degree murder because he used unreasonable and excessive force that resulted in Mr. Floyd’s death, and he acted willfully and in callous and wanton disregard of the consequences to Mr. Floyd’s life.

Second, defendant Chauvin pleaded guilty to willfully depriving, while acting under color of law, a then 14-year-old juvenile of his constitutional rights, resulting in the juvenile’s bodily injury.

“Defendant Chauvin has pleaded guilty to two federal civil rights violations, one of which led to the tragic loss of George Floyd’s life,” said Attorney General Merrick B. Garland. “While recognizing that nothing can repair the harm caused by such acts, the Justice Department is committed to holding accountable those who violate the Constitution, and to safeguarding the civil rights of all Americans.”

In the plea agreement, defendant Chauvin admitted that on May 25, 2020, he willfully violated Mr. Floyd’s constitutional right to be free from an officer’s use of unreasonable force. Specifically, defendant Chauvin admitted that he held his left knee across Mr. Floyd’s neck, back and shoulder and his right knee on Mr. Floyd’s back and arm. The plea agreement states that Mr. Floyd remained restrained, prone and handcuffed on the ground for approximately 10 minutes. Defendant Chauvin further admitted that he continued to use force even though he was aware that Mr. Floyd had stopped resisting, talking and moving, and even though he was aware that Mr. Floyd had lost consciousness and a pulse. Defendant Chauvin admitted that Minneapolis Police Department (MPD) policy and training requires officers to stop using force when a subject is not resisting and to move an arrestee from the prone position into a side recovery or seated position because the prone position may make it more difficult to breathe. Defendant Chauvin admitted that his willful use of unreasonable force resulted in Mr. Floyd’s bodily injury and death because his actions impaired Mr. Floyd’s ability to obtain and maintain sufficient oxygen to sustain Mr. Floyd’s life.  

In the plea agreement, defendant Chauvin also admitted that he willfully violated Mr. Floyd’s constitutional right not to be deprived of liberty without due process of law, which includes an arrestee’s right to be free from a police officer’s deliberate indifference to his serious medical needs. Specifically, defendant Chauvin admitted that he failed to render medical aid to Mr. Floyd, although he saw that Mr. Floyd was lying on the ground, in serious medical need, and although he was aware that MPD policy required him to provide emergency medical aid, including CPR, to an arrestee who needs it. Defendant Chauvin admitted that his failure to render medical aid resulted in Mr. Floyd’s bodily injury and death.

Additionally, according to the plea agreement, defendant Chauvin admitted that on Sept. 4, 2017, he willfully violated a then 14-year-old juvenile’s constitutional right to be free from an officer’s use of unreasonable force. Specifically, defendant Chauvin admitted that he held the juvenile by the throat and struck the juvenile multiple times in the head with a flashlight, resulting in the juvenile’s bodily injury. In the plea agreement, defendant Chauvin also admitted that he held his knee on the juvenile’s neck, shoulders and upper back for between 15 and 16 minutes, even though the juvenile was face-down on the floor, handcuffed and not resisting. Defendant Chauvin admitted that these actions resulted in the juvenile’s bodily injury.

Defendant Chauvin pleaded guilty today before U.S. District Court Senior Judge Paul A. Magnuson. Defendant Chauvin will be sentenced at a hearing to be scheduled at a later date. According to the plea agreement, defendant Chauvin faces a sentence of between 20- and 25-years imprisonment. Under the terms of the plea agreement, defendant Chauvin will serve his sentence in federal custody and will not be eligible to work in any law enforcement capacity following his release.

This case was investigated by the FBI and the Minnesota Bureau of Criminal Apprehension and is being prosecuted by Special Litigation Counsel Samantha Trepel and Trial Attorney Tara Allison of the Civil Rights Division, and Assistant U.S. Attorneys Samantha Bates, LeeAnn Bell, W. Anders Folk, Evan Gilead, Manda Sertich and Allen Slaughter of the U.S. Attorney’s Office for the District of Minnesota.  

A Virginia man was sentenced today to 38 months in prison for preparing false tax returns on behalf of clients, theft of government funds, and failing to file his own federal income tax returns.

According to court documents and evidence presented at trial, from at least 2013 through 2019, Karl Burden-El Bey (aka Carl L. Burden), 66, of Hampton, created false tax returns for clients of his Hampton tax preparation business. On his clients’ returns, Burden-El Bey claimed false dependent information, residential energy credits, gifts to charity, deductions, and child and dependent care expenses, all to inflate his clients’ refunds from the IRS. As trial evidence showed, Burden-El Bey often concealed his involvement by not signing such false returns as the tax preparer. He also stole $5,000 by directing without authorization a portion of one client’s refund into his personal bank account. Even though he earned income as a tax preparer that exceeded the minimum filing threshold, from 2013 through 2017 Burden-El Bey did not file his own individual income tax returns with the IRS.

In addition to the term of imprisonment, U.S. District Judge David J. Novak ordered Burden-El Bey to serve three years of supervised release and pay approximately $5,000 in restitution to the United States.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Jessica D. Aber for the Eastern District of Virginia made the announcement.

IRS-Criminal Investigation investigated the case.

Trial Attorneys Grace Albinson and Francesca Bartolomey of the Justice Department’s Tax Division and Assistant U.S. Attorneys Brian Samuels and Lisa McKeel of the U.S. Attorney’s Office for the Eastern District of Virginia prosecuted the case.

Solutia Inc. and Pharmacia LLC, successors to Monsanto Company, will complete the cleanup of four former landfills and waste lagoons in Sauget, Illinois, across the Mississippi River from St. Louis. The settlement will require the companies to reimburse EPA $700,000 in past costs spent at the sites and take responsibility for implementing EPA’s cleanup plan estimated to cost $17.9 million.

“This settlement is one in a series that requires the industry that polluted Sauget and Cahokia, Illinois, to clean up their mess,” said Deputy Assistant Attorney General Bruce S. Gelber of the Justice Department’s Environment and Natural Resources Division. “This settlement demonstrates the Justice Department’s and EPA’s continuing efforts, together with our state partners, to ensure that polluters, not the American public, pay for the investigation and cleanup of Superfund sites.”

“For too long, residents in the Metro East area have been overburdened by legacy sources of pollution,” said Administrator Debra Shore of EPA’s Region 5. “Today’s settlement is the result of years of EPA’s efforts to investigate the extent and sources of soil and surface water contamination in the four former landfills that make up Sauget Area 2, and to hold accountable those who placed it there.”

Under the settlement, Solutia and Pharmacia will be required to implement the remedy selected by EPA for over 270 acres designated as Sauget Area 2 Sites O, Q, R and S. The sites were used by area industry to dispose of hazardous and other wastes throughout much of the 20th century. The hazardous waste includes toxic substances and known carcinogens, including PCBs, dioxin, lead, cadmium, benzene and chlorobenzene. Although the industrial area is not readily accessible to the public, the remedial actions required under this settlement will prevent exposure to these harmful contaminants for workers, anglers or others who gain access to the sites.

The cleanup requires placing engineered caps over identified waste areas, conducting vapor intrusion mitigation and controlling access to the sites. This is only the latest in various lawsuits and settlements involving the cleanup of these former landfills dating back 15 years in which Solutia and Pharmacia have conducted extensive investigations, paid for the removal of hazardous wastes and installed a slurry wall to prevent contaminated groundwater from leaching into the nearby Mississippi River.

The consent decree, lodged in the U.S. District Court for the Southern District of Illinois, is subject to a 30-day public comment period and final court approval. The consent decree will be available for viewineg at https://www.justice.gov/enrd/consent-decrees.

The Justice Department announced today that it has entered into a settlement agreement with the Champaign-Urbana Mass Transit District (MTD) to resolve alleged violations of Title II of the Americans with Disabilities Act (ADA).

Under the agreement, the MTD must make its website and mobile applications accessible for users with visual and manual impairments. Public transportation users rely on the MTD’s website and mobile applications to plan trips, check arrival times, and find fare information. The agreement requires the MTD to conform its website – www.mtd.org – and mobile applications to the Web Content Accessibility Guidelines (WCAG), Version 2.1, Level AA. WCAG is a set of voluntary industry guidelines for making information on a website accessible to users with disabilities, particularly those with visual and manual impairments. Additionally, the MTD will invest a minimum of $100,000 to improve its services for passengers with disabilities.  

“Equal access to public transit systems is critically important for the independence of people with disabilities and is required by law,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “This settlement brings us one step closer to realizing the ADA’s promise of equal opportunity for all people regardless of disability status. The Department of Justice will continue to vigorously enforce federal law to root out discrimination against people with disabilities.”

 “This agreement reflects the MTD’s longtime commitment to serving individuals with disabilities,” said U.S. Attorney Gregory K. Harris for the Central District of Illinois. “We appreciate the MTD’s cooperation throughout the investigation and its commitment to quickly make its website and related tools fully accessible. Roughly 30 years after being enacted, the ADA continues to be a very important law protecting the rights of all individuals living and working in our community and its provisions remain relevant as technology and the needs of individuals with disabilities evolve.”

This matter was handled jointly by the Disability Rights Section of the department’s Civil Rights Division and Assistant U.S. Attorney Joshua I. Grant of the Central District of Illinois. Title II of the ADA requires state and local governmental entities like public transportation providers to provide individuals with disabilities an equal opportunity to benefit from their services, programs and activities.

For more information on the Civil Rights Division, please visit http://www.justice.gov/crt. For more information on the ADA, please call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov. ADA complaints may be filed online at http://www.ada.gov/complaint/. Individuals in the Central District of Illinois may also report civil rights violations to the U.S. Attorney’s Office for the Central District of Illinois by calling 217-492-4450.

The Justice Department announced today that Joseph Centanni, a landlord who has owned hundreds of rental units in and around Elizabeth, New Jersey, has agreed to pay $4.5 million in monetary damages and a civil penalty to resolve a Fair Housing Act (FHA) lawsuit concerning his sexual harassment of tenants and housing applicants for more than 15 years. This settlement, which still must be approved by the U.S. District Court for the District of New Jersey, is the largest monetary settlement the department has ever obtained in a case alleging sexual harassment in housing.  

The FHA prohibits discrimination on the basis of sex, which includes sexual harassment and discrimination on the basis of sexual orientation and gender identity. Centanni focused his harassment on women, as well as men who are gay or bisexual. The monetary damages awarded under the proposed consent decree will compensate numerous women and men who were sexually harassed by Centanni.

“This lawsuit and historic settlement send a clear message that the Department will not stand by idly as landlords abuse their power to prey on vulnerable tenants,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “Sexual harassment of tenants is abhorrent and unlawful, and has devastating consequences on victims. The Justice Department stands as committed as ever to aggressively pursuing landlords and housing providers who engage in this violative and threatening conduct.”

“The need for housing is a basic human need,” said Acting U.S. Attorney Rachael A. Honig of the District of New Jersey. “Joseph Centanni exploited that need, and the important federal programs that attempt to meet it, by threatening to deny his victims a roof over their heads if they did not submit to his demands for sexual acts. This landmark settlement demonstrates our unyielding commitment to combat sexual harassment in housing and to ensure that no one is subject to discrimination because of their sex, including based on their sexual orientation or gender identity.”

“No one deserves to be victimized and preyed upon in their own home,” said Inspector General Rae Oliver Davis of Department of Housing and Urban Development (HUD). “HUD OIG is committed to investigating with our law enforcement partners to pursue predatory landlords and hold them accountable for this egregious behavior and seek relief for victims.” 

The United States’ lawsuit alleged that Centanni’s harassment spanned a period of at least 15 years. According to the complaint, Centanni demanded sexual favors, like oral sex, to get or keep housing; offered housing benefits, such as reduced rent in exchange for sexual favors; touched tenants and applicants in a way that was sexual and unwelcome and made unwelcome sexual comments and advances to tenants and applicants. The complaint also alleged that Centanni initiated or threatened to initiate eviction actions against tenants who objected to or refused his sexual advances. According to the complaint, Centanni participated in the federal Housing Choice Voucher Program (also known as Section 8) and received approximately $102,000 each month in Housing Choice Voucher payments.

The United States’ complaint alleged that Centanni would take housing applicants and tenants to places on his properties like empty apartments, and empty laundry or storage rooms. There, he would do things like ask for massages, expose himself, demand oral sex and force people to touch him sexually. If people submitted to his demands, Centanni allowed them to move in, or keep their housing. If people did not submit, Centanni refused to rent to them, or evicted them.  

Under the terms of the proposed consent decree, Centanni will pay $4,392,950 in monetary damages to tenants and prospective tenants harmed by his harassment, through a process established in the consent decree. Individuals who believe that they were subjected to sexual harassment by Centanni should contact the Housing Discrimination Tip Line toll free, at 1-833-591-0291, and select option number one to leave a message.  Individuals can also contact the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339. Individuals may also e-mail the Justice Department at fairhousing@usdoj.gov, or submit a report online. 

The proposed consent decree reflects that Centanni has sold all of his residential rental properties. Under the terms of the settlement, he is permanently enjoined from owning and managing residential rental properties in the future. Centanni will be required to dismiss housing court judgments obtained in proceedings deemed to be retaliatory and take steps to repair the credit of any affected tenants.  He must also pay a $107,050 civil penalty to the United States, the maximum civil penalty allowed under the FHA.   

There are separate, ongoing, criminal prosecutions against Centanni brought by the Office of the Union County, New Jersey, Prosecutor. To date, that office has charged Centanni with coercing 20 tenants into sexual acts in exchange for financial relief. Centanni is charged with 13 counts of second-degree sexual assault, 1 count of second-degree attempted sexual assault, and 21 counts of fourth-degree criminal sexual contact. Individuals may learn more about the criminal prosecution at https://ucnj.org/prosecutor/press-releases/prosecutor/2021/07/01/elizabeth-landlord-charged-with-sexual-crimes-against-7-additional-tenants-bringing-total-to-20/. Individuals with information about Centanni may reach the Union County Prosecutor’s Office by contacting Detective Joanne Son at (908) 477-1698.

Assistant Attorney General Clarke and Acting U.S. Attorney Honig credit the special agents of the U.S. Department of Housing and Urban Development’s Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, for their partnership in this matter. 

The Justice Department launched its Sexual Harassment in Housing Initiative in October 2017. The department’s initiative is led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The goal of the initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing. Since launching the initiative, the Department of Justice has filed 23 lawsuits alleging sexual harassment in housing and recovered over $9.5 million for victims of skuch harassment. 

If you think you are a victim of sexual harassment by a landlord, or other forms of housing discrimination, you may contact the Justice Department by submitting a report online or contacting the U.S. Attorney’s Office for the District of New Jersey at (855) 281-3339 or by filing a complaint online.

Reports also may be made by contacting the U.S. Department of Housing and Urban Development at 1-800-669-9777 or by filing a complaint online.

The U.S. Department of Justice today announced the opening of the FY 2022 Coordinated Tribal Assistance Solicitation period. Also known as CTAS, the funding under this initiative is available to assist American Indian and Alaska Native communities in the areas of crime prevention, victim services and coordinated community responses to violence against native women.

The solicitation, at https://www.justice.gov/tribal/open-solicitations, contains details about available grants and describes how federally-recognized American Indian and Alaska Native tribal governments and tribal consortia can apply for funding. CTAS is administered by the department’s Office of Justice Programs (OJP) and Office of Community Oriented Policing Services (COPS Office).

The funding from OJP’s Bureau of Justice Assistance, Office for Juvenile Justice and Delinquency Prevention and Office for Victims of Crime, and the department’s COPS Office, can be used for a variety of public safety and justice-related projects and services. Funds can be used to support tribal law enforcement; bolster adult and juvenile justice systems; support youth; serve native victims of child abuse, sexual assault, domestic violence and elder abuse; and support other efforts to combat crime.

“Supporting public safety efforts in Indian country is a solemn responsibility and a top priority of the Department of Justice, and it is a duty that we are working hard to fulfill,” said Principal Deputy Assistant Attorney General Amy L. Solomon of OJP. “We have heard from tribal leaders about their biggest challenges and have responded by improving access to federal resources and ensuring that our investments are responsive to the needs of their communities and the people they serve.”

“The COPS Office is excited to once again partner in this extremely important initiative to help our colleagues in Indian country,” said Acting Director Robert Chapman of the COPS Office. “Any opportunity we have to provide officers, equipment, training and other tools to these communities is an opportunity we are excited to offer and we look forward to eligible applicants taking advantage of this funding.”

Last year, the Department of Justice made 137 awards, totaling almost $74 million, to 85 tribes. The department has incorporated feedback from tribal meetings, listening sessions, consultations, assessments and other methods into this year’s solicitation and as a result has streamlined the solicitation as well as the application process to reduce the burden on applicants.

For information about how to apply, including details about the seven CTAS purpose areas and an overview of changes from last year’s solicitation, please view the FY 2022 Fact Sheet: https://www.justice.gov/tribal/open-solicitations. The Grants.gov application deadline for CTAS is 8:59 p.m. EST, on March 10, 2022, and the JustGrants deadline is 8:59 p.m. EST, on March 15, 2022.

Fact sheets detailing each of the individual purpose areas can be found online at: https://www.justice.gov/tribal/open-solicitations. The department will also facilitate a series of webinars to guide applicants through the application process. Details, including how to register for these webinars, will be made available online in coming weeks at https://www.justice.gov/tribal/open-solicitations.

Tribes and tribal consortia may also be eligible for non-tribal specific federal grant programs and are encouraged to explore other funding opportunities, which may be found at the department’s Tribal Justice and Safety website: https://www.justice.gov/tribal/open-solicitations or the www.grants.gov website.

Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities.

The Office of Justice Programs provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims and enhance the rule of law. More information about OJP and its components can be found at www.ojp.gov.

The COPS Office is the federal component of the Department of Justice responsible for advancing community policing nationwide. The only Department of Justice agency with policing in its name, the COPS Office was established in 1994 and has been the cornerstone of the nation’s crime fighting strategy with grants, a variety of knowledge resource products, and training and technical assistance. Through the years, the COPS Office has become the go-to organization for law enforcement agencies across the country and continues to listen to the field and provide the resources that are needed to reduce crime and build trust between law enforcement and the communities served. The COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 135,000 officers.

A federal grand jury in Roanoke, Virginia, returned an indictment on Thursday charging a Virginia man with employment tax fraud.

According to the indictment, Richard E. Moore, of Augusta County, was the executive vice president and part owner of Nexus Services Inc. (Nexus), a Verona-based company that offers bond securitization and other services to immigrants detained by U.S. Immigration and Customs Enforcement. As executive vice president, Moore allegedly directed the company’s day-to-day management and was responsible for paying employment taxes to the IRS that Nexus withheld from its employees’ wages. For various tax periods between the first quarter of 2015 and fourth quarter of 2020, Moore allegedly did not pay the IRS a total of more than $1.5 million in payroll taxes that had been withheld from Nexus employees’ paychecks.

Moore is charged with 10 counts of willfully failing to pay employment taxes. His initial court appearance is scheduled for a later date before U.S. Magistrate Judge Joel Hoppe of the U.S. District Court for the Western District of Virginia. If convicted, Moore faces a maximum penalty of five years in prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Christopher R. Kavanaugh of the Western District of Virginia made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys William Montague and Alexander Effendi of the Justice Department’s Tax Division are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A New Jersey mortgage underwriter was sentenced today to 12 years in prison for helping others file false tax returns claiming large refunds from the IRS, obstructing the IRS’s efforts to recover those illegal refunds and failing to file a tax return.

John Barry Jr., of Pemberton, was convicted by a jury on July 23 of conspiring to defraud the IRS, aiding and assisting the preparation of false tax returns, obstructing the IRS and failing to file a tax return. According to court documents and testimony, in 2015 and 2016, Barry conspired with individuals in Georgia, North Carolina, Virginia and New York to promote a “mortgage recovery” tax fraud scheme in which Barry and his co-conspirators obtained tax refunds for their clients based on fraudulent tax returns. Barry and his co-conspirators told the clients they could extinguish their outstanding mortgage debts by filing forms with the IRS claiming a large amount of taxes had been withheld. Those withholding claims, which Barry and his co-conspirators knew were false, caused the IRS to issue a total of more than $4 million in refunds to the clients. Barry typically charged each client a fee of between 20% to 35% of the refund the client obtained, and then he split those fees with some of his co-conspirators.

In addition to his role in the “mortgage recovery scheme,” Barry did not file his own 2016 return despite earning income in excess of the filing threshold, and he did not report or pay taxes on the income generated from the scheme in that tax year.

When the IRS discovered the fraud and attempted to recover the wrongfully paid refunds, Barry obstructed the agency by providing clients with fraudulent documents to send to the IRS, directing clients to conceal his role in filing their false returns and advising a client to remove funds from his bank account to prevent collection efforts.

In addition to the term of imprisonment, U.S. District Judge Robert B. Kugler ordered Barry to serve three years of supervised release and to pay approximately $4,240,733 in restitution to the United States.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

The IRS Criminal Investigation Division investigated the case.

Trial Attorneys Sean Green and Samuel Bean of the Justice Department’s Tax Division prosecuted the case.

Two Guatemalan nationals were extradited to the United States from Guatemala on Friday to face international narcotics trafficking charges.

Guatemalan nationals Haroldo Geremias Lorenzana-Cordon, aka Chuci, aka Chuchy, and Marta Julia Lorenzana-Cordon, aka Julie, aka Yulie, aka Julia and aka Morena, were extradited from Guatemala to the United States on Dec. 10 to face international drug trafficking charges. They made their initial court appearance in Washington, D.C. on Dec. 11. They are detained pending their appearance today before U.S. Magistrate Judge Zia M. Faruqui in the U.S. District Court for the District of Columbia.

According to allegations contained in court documents, the defendants were leaders of the Lorenzana drug trafficking organization. According to court documents, the Lorenzana drug trafficking organization, a historically patriarchal criminal group comprised primarily of family members, is one of the largest and most influential drug cartels in Guatemala. The organization transports tonnage quantities of cocaine from Colombia into Guatemala, where the cocaine is inventoried and stored on properties owned by the organization throughout Guatemala. Once processed, the organization works with the Sinaloa Cartel, among other organizations, to traffic cocaine into Mexico, through Central America, and eventually, into the United States.

According to court documents, between 1996 and 2019, the organization coordinated the transportation, storage and distribution of multi-ton quantities of cocaine from Colombia to Central America and Mexico, for eventual distribution into the United States. Their siblings, Eliu Elixander Lorenzana-Cordon and Waldemar Lorenzana-Cordon, were convicted on international narcotics trafficking charges in the District of Columbia in March 2019. Their father, Waldemar Lorenzana-Lima Sr., pleaded guilty to international narcotics trafficking charges in the District of Columbia in August 2014. Eliu and Waldemar Lorenzana-Cordon received life sentences. Waldemar Lorenzana-Lima received a 23 year sentence.

In April 2010, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated Haroldo, along with his father and two brothers, as Specially Designated Narcotics Traffickers (SDNT) pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for their role in facilitating the narcotics-trafficking activities of the Sinaloa Cartel in Guatemala. OFAC subsequently designated Marta Julia as an SDNT in November 2012.

A grand jury in the District of Columbia returned an indictment against Haroldo on March 10, 2009. In November 2019, Haroldo was arrested by Guatemalan authorities, pursuant to a provisional arrest request by the United States, where he remained detained pending his extradition. A grand jury in the District of Columbia returned an indictment against Marta Julia on July 23, 2020. In April, Marta Julia was arrested by Guatemalan authorities, pursuant to an extradition request by the United States, where she remained detained pending her extradition.

The defendants are charged with conspiracy to distribute five kilograms or more of cocaine, knowing and intending that it will be unlawfully imported to the United States. If convicted, they each face mandatory minimum sentences of 10 years in federal prison and a statutory maximum sentence of life imprisonment. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

This case is part of “Operation Slipknot,” which is supported by the Organized Crime Drug Enforcement Task Force (OCDETF). The Drug Enforcement Administration’s 959/Bilateral Investigations Unit is investigating with assistance from the DEA Guatemala City Country Office.

Trial Attorneys Imani Hutty and Teresita Mutton of the Criminal Division’s Narcotic and Dangerous Drug Section are prosecuting the case. The Office of International Affairs and Office of Enforcement Operations also provided significant assistance.  

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Justice Department announced today that Chester Gordon Whitescarver and his wife, Betsy Whitescarver, who have owned and managed rental properties in and around Russellville, Kentucky, have agreed to pay $230,000 to resolve a lawsuit alleging that they violated the Fair Housing Act (FHA). The department’s lawsuit alleged that Gordon Whitescarver has sexually harassed female tenants since at least 2012 and that Betsy Whitescarver was on notice of sexual harassment allegations but took no action to stop his sexually harassing behavior. 

Under the consent decree entered by the U.S. District Court for the Western District of Kentucky, the Whitescarvers must pay $220,000 to 11 women who are current or former tenants harmed by the Whitescarvers’ discriminatory conduct, and must pay a $10,000 civil penalty to the United States. The Whitescarvers must also take steps to dismiss any pending eviction actions against the victims, vacate any adverse judgments they obtained against the victims, and take steps to repair the credit of any affected victim. The consent decree also bars future discrimination, permanently bars the Whitescarvers from property management, mandates Fair Housing Act training, and requires monitoring and reporting regarding property management activities.

“We all deserve to feel safe in our own homes,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “Sexual harassment by housing providers deprives tenants of their right to be safe, secure and free from unlawful conduct. The Justice Department is committed to pursuing predatory landlords and will work resolutely to hold those landlords accountable and obtain relief for their victims.”

“I commend the attorneys and investigators assigned to this case for their outstanding work on behalf of the 11 victims,” said U.S. Attorney Michael A. Bennett for the Western District of Kentucky. “The Fair Housing Act prohibits sexual harassment of tenants. We will continue to aggressively pursue landlords who subject their tenants to such discriminatory conduct.”

The United States’ lawsuit alleged that Gordon Whitescarver subjected multiple female tenants to sexual harassment and retaliation. According to the complaint, he made repeated and unwelcome sexual comments, entered the homes of female tenants without their consent, touched female tenants without their consent, requested sexual acts, offered reduced or free rent in exchange for sexual acts and took adverse housing-related actions against female tenants who refused his sexual advances. The United States’ complaint also alleged that Betsy Whitescarver threatened and retaliated against women who complained about her husband’s harassment.

The Justice Department launched its Sexual Harassment in Housing Initiative in October 2017. The department’s initiative is led by the Civil Rights Division, in coordination with U.S. Attorneys' Offices across the country. The goal of the initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing. Since launching the initiative, the Department of Justice has filed 23 lawsuits alleging sexual harassment in housing and recovered over $5.2 million for victims of such harassment. 

If you think you are a victim of sexual harassment by a landlord, or have suffered other forms of housing discrimination, you may contact the Justice Department by submitting a report online or contacting the U.S. Attorney’s Office for the Western District of Kentucky at (502) 582-5911.

Reports may also may be made by contacting the U.S. Department of Housing and Urban Development at 1-800-669-9777 or by filing a complaint online.

A Georgia woman pleaded guilty today to conspiring to defraud the United States by promoting a nationwide tax fraud scheme and preparing false tax returns for the scheme’s participants.

According to court documents, Yomarie Febres, 47, of Covington, prepared 77 false income tax returns that collectively sought more than $23.8 million in tax refunds from the IRS. Between 2014 and 2016, Febres’s co-conspirators held seminars throughout the country where they promoted the scheme and recruited clients to file false tax returns with the IRS by convincing them that their mortgages and other debts entitled them to tax refunds. Information was then collected from clients and provided to Febres for use in the preparation of false tax returns. The tax returns Febres prepared falsely claimed that banks and other financial institutions had withheld large amounts of income taxes from the clients, which entitled the clients to refunds. In reality, the financial institutions had not paid any income to or withheld any taxes from the clients. The false tax returns Febres prepared caused the IRS to pay out more than $15 million in fraudulent refunds to scheme participants. Febres concealed her role in the scheme by falsely reporting that all of the returns were “self-prepared,” when, in fact, she had created them.

As part of her plea, Febres admitted that her co-conspirators charged clients approximately $10,000 to $15,000 in fees to participate in the scheme. A portion of the fee – typically $500 per client – was paid to Febres for each tax return she prepared. Febres further admitted that she did not report on her 2014 and 2015 income tax returns the income she received for preparing these false returns. She also admitted to claiming false business losses on her personal tax returns.

Febres is scheduled to be sentenced at a later date. She faces a maximum penalty of five years in prison for conspiring to defraud the United States and three years in prison for aiding and assisting in the preparation of false tax returns. Febres also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Several of Febres’s co-conspirators are scheduled to go to trial in January 2022.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Karin Hoppmann for the Middle District of Florida made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Melissa S. Siskind, Kavitha Bondada and Isaiah Boyd III of the Justice Department’s Tax Division and Assistant U.S. Attorney Chauncey A. Bratt of the U.S. Attorney’s Office for the Middle District of Florida are prosecuting the case.

In the first extradition from the Republic of Cameroon to the United States, a Texas man was extradited to Houston on Friday to serve an 80-year prison sentence he received in absentia four years ago after he pleaded guilty in two separate cases to conspiracy, health care fraud, money laundering, and tax offenses.

According to court documents, in November 2016, Ebong Aloysius Tilong, 57, of Sugar Land, Texas, and his wife, Marie Neba, went to trial on the conspiracy, health care fraud, and money laundering charges. The trial evidence and court documents showed that between 2006 and 2015, Tilong, Neba, and their co-conspirators used Tilong and Neba’s company, Fiango Home Healthcare Inc. (Fiango), to corruptly obtain more than $13 million by submitting false and fraudulent claims to Medicare for home health care services that Fiango’s patients did not need or receive. The trial evidence and court documents also showed that Tilong and Neba paid illegal kickbacks to patient recruiters to refer patients to Fiango, and that Tilong falsified and directed others to falsify medical records to make it appear as though Fiango’s patients met the Medicare qualifications for home health care. Additional evidence demonstrated that Tilong attempted to destroy evidence and blackmail and suborn perjury from witnesses. After the first week of trial, Tilong pleaded guilty to one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiracy to pay and receive health care kickbacks, three counts of payment and receipt of health care kickbacks, and one count of conspiracy to launder monetary instruments.

In June 2017, Tilong pleaded guilty in a separate case to two counts of filing fraudulent tax returns. In connection with this guilty plea, Tilong admitted that he created a shell company called Quality Therapy Services (QTS) to limit the amount of tax that he paid to the IRS on the proceeds that he and his co-conspirators stole from Medicare. According to Tilong’s plea agreement, in 2013 and 2014, Tilong wrote almost $1 million in checks from Fiango to QTS for physical-therapy services that QTS never provided to Fiango’s patients and deducted as business expenses. Tilong admitted that his tax fraud scheme caused the IRS a tax loss of approximately $344,452.

In August 2017, Neba was sentenced to 75 years in prison the Medicare fraud scheme at Fiango. The U.S. District Court scheduled Tilong’s sentencing for Oct. 13, 2017, but court records show that on the morning of his sentencing hearing, Tilong removed an ankle bracelet monitoring his location and failed to respond to phone calls from, or appear in, the U.S. District Court for his sentencing. On Dec. 8, 2017, the U.S. District Court sentenced Tilong in absentia to 80 years in prison for his role in the Medicare and tax fraud schemes.

After Tilong absconded, the FBI Houston Field Office located Tilong in Cameroon, and worked collaboratively with the FBI Legal Attaché in Abuja, Nigeria, the Department of Health and Human Services Office of Inspector General (HHS-OIG), IRS Criminal Investigation (IRS-CI) Fraud Section, and the Office of the President of the Republic of Cameroon to ensure Tilong’s capture. Prior to his removal from Cameroon, Tilong was wanted by the FBI and listed among HHS-OIG’s Top 10 Most Wanted Fugitives. The National Police Force of Cameroon arrested Tilong in January 2019.

In September 2021, the Republic of Cameroon President Paul Biya signed a decree ordering Tilong’s removal to the United States.

On Dec. 10, 2021, U.S. Marshals escorted Tilong from Cameroon to the United States.

The United States is grateful to the Government of Cameroon for its cooperation and support of this extradition request.

“The successful return of Ebong Tilong demonstrates the department’s commitment to working with our international partners to pursue, capture, and return those who try to defraud the American people,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “Thanks to the efforts of our law enforcement partners and their counterparts in Cameroon, Ebong Tilong has been returned to the United States and brought to justice.”

“This successful extradition of Ebong Tilong to serve his 80-year prison sentence is an example of the FBI’s collaboration with our federal and international partners that we hope will deter others from fleeing to avoid prosecution or sentencing,” said Acting Special Agent in Charge Richard A. Collodi of the FBI Houston Field Office. “These partnerships highlight the FBI’s reach as well as its determination to pursue actors anywhere to administer justice.”

“Convicted fraudster and former fugitive Ebong Tilong has been brought to justice in our country, thanks to the tireless efforts of U.S. law enforcement, including our investigators,” said Special Agent in Charge Miranda L. Bennett of HHS-OIG. “Our agency, together with our law enforcement partners, will continue to aggressively pursue those who steal from federal health care programs, wherever they try to hide.”

“IRS-CI is committed to not only investigating and ultimately seeking convictions of individuals who scheme to defraud Medicare, launder proceeds of their illicit transactions, and evade the IRS in paying their taxes, but we’re also committed to assisting in the apprehension and return of criminals who choose to run and hide upon their conviction and sentencing no matter where they go or how long they’ve been gone,” said Assistant Special Agent in Charge Ramsey E. Covington of the IRS-CI Houston Field Office. “We appreciate the efforts of our law enforcement partners and federal prosecutors in ensuring Tilong ultimately begins serving his 80-year sentence in federal prison.”

The Justice Department’s Office of International Affairs, the Regional Security Office of the State Department’s Bureau of Diplomatic Security, and the Consular Section of the U.S. Embassy in Yaoundé provided invaluable assistance in supporting the extradition and coordinating the return of Tilong to the United States.

Trial Attorney Jonathan Baum formerly of the Criminal Division’s Fraud Section (now with the Money Laundering and Asset Recovery Section) and Trial Attorney Andrew Pennebaker of the Fraud Section are prosecuting Tilong’s Medicare and tax fraud cases.

The FBI, HHS-OIG, and IRS-CI conducted the investigation under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Texas as part of the Medicare Fraud Strike Force. The interagency team combines the resources of federal, state, and local law enforcement entities to prevent and combat health care fraud, waste, and abuse. Strike Force teams have shut down health care fraud schemes around the country, arrested more than a thousand criminals, and recovered millions of taxpayer dollars.

The Justice Department’s Antitrust Division, U.S. Patent and Trademark Office (USPTO), and the National Institute of Standards and Technology (NIST) are extending the period for receiving comments on the Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to F/RAND Commitments, released on Dec. 6. The agencies are extending the comment period from 30 to 60 days, with comments now being accepted until Feb. 4, 2022. The agencies extended the comment period to give all stakeholders more time to provide input on the new draft policy statement, which seeks to promote good-faith licensing negotiations and addresses the scope of remedies available to patent owners that have agreed to license their essential technologies on reasonable and non-discriminatory or fair, reasonable and non-discriminatory (F/RAND) terms.

Interested parties, including attorneys, economists, academics, consumer groups, industry stakeholders or other members of the public, may submit public comments to Regulations.gov until Feb. 4, 2022. Information about the draft revised statement can also be found on the Antitrust Division’s website.

The Department of Justice today released the following statement from spokesman Anthony Coley following the Supreme Court’s decision in Whole Woman’s Health et al. v. Jackson:

“The Department of Justice brought suit against Texas Senate Bill 8 because the law was specifically designed to deprive Americans of their constitutional rights while evading judicial review. The department will continue our efforts in the lower courts to protect the rights of women and uphold the Constitution.”

A Florida man pleaded guilty today to conspiring to defraud the United States by promoting a tax fraud scheme to more than 200 individuals in at least 19 states. He also pleaded guilty to attempting to obstruct the IRS.

According to court documents, Aaron Aqueron of Clermont recruited clients to a nationwide tax fraud scheme by convincing them that their mortgages and other debts entitled them to tax refunds. Aqueron collected tax and financial information from these clients to send to co-conspirators,  who prepared tax returns and other tax documents to submit to the IRS. These tax returns falsely claimed that banks and other financial institutions had withheld large amounts of income taxes from the clients, and that the clients were entitled to a refund. In reality, the financial institutions had not paid any income to or withheld any taxes from the clients. In total, the tax returns filed by the clients sought more than $14.6 million in tax refunds and caused the IRS to actually pay out more than $7.6 million in refunds.

As part of his plea, Aqueron admitted he and his co-conspirators received fees from his clients ranging from $10,000 to $15,000 each. Aqueron further admitted he did not report on his 2015 individual income tax return the income he received from the scheme. Aqueron also personally filed false tax returns on which he fraudulently claimed that he was entitled to tax refunds. In response to one of these false tax returns, the IRS issued Aqueron a refund of $193,347.97.

Aqueron further admitted that he attempted to obstruct the IRS’s efforts to collect the tax refunds it  issued to his clients, pursuant to the fraud scheme. Aqueron and his conspirators coached clients on ways to obstruct IRS collection efforts. For example, after learning one client had begun to receive letters from the IRS about collections, Aqueron instructed the client: “Make sure you move money out of your name and out of the banking institutions and be smart.” Aqueron also attempted to obstruct IRS efforts to collect his own fraudulently-obtained refund, including by transferring money into a trust.

Aqueron is scheduled to be sentenced at a later date. He faces a maximum penalty of five years in prison for conspiring to defraud the United States and three years in prison for corruptly endeavoring to obstruct or impede the IRS. Aqueron also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Aqueron’s conspirators are scheduled to go to trial in January 2022.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Karin Hoppmann for the Middle District of Florida made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Melissa S. Siskind, Kavitha Bondada, and Isaiah Boyd, III of the Justice Department’s Tax Division and Assistant U.S. Attorney Chauncey A. Bratt of the U.S. Attorney’s Office for the Middle District of Florida are prosecuting the case.

On Dec. 9, a federal jury in Fort Lauderdale, Florida, convicted James Boccuzzi, 37, of Boca Raton, Florida, of one count of conspiracy to defraud the U.S. Food and Drug Administration (FDA) and one count of conspiracy to distribute controlled substances.

Boccuzzi is the 11th defendant convicted in connection with Blackstone Labs LLC, a Boca Raton company that sold millions of dollars of products labeled as dietary supplements. According to court documents and evidence presented at trial, Boccuzzi who was Blackstone’s director of sales, and his co-conspirators, including Phillip “PJ” Braun, Aaron Singerman, Blackstone Labs LLC and others, conspired to defraud the FDA and to manufacture and illegally distribute anabolic steroids that were controlled substances. Evidence presented at trial established that the steroid products sold by Blackstone Labs and affiliated companies became illegal controlled substances in December 2014 under a new federal law, the Designer Anabolic Steroid Control Act, which amended the Controlled Substances Act. Evidence at trial established that despite knowing about the law and its impact on the legality of Blackstone’s steroid products, Boccuzzi and his co-conspirators continued selling the products for more than 18 months.

The evidence also showed that Boccuzzi and his co-conspirators quickly sold off other Blackstone products containing certain stimulants after they received an FDA warning letter notifying them that the products were unlawful to sell as dietary supplements. Further, the evidence showed that the conspirators concealed the sales of other products containing research chemicals despite knowing that the products could not legally be sold as dietary supplements.

Braun and Singerman each pleaded guilty on Nov. 17 to conspiracy to distribute controlled substances and to selling unapproved new drugs. Blackstone Labs pleaded guilty on Nov. 19 to the same charges as Braun and Singerman, as well as to conspiracy to defraud the FDA and to commit mail and wire fraud. Five other individual defendants and two corporate entities involved in the sale of Blackstone Labs products previously pleaded guilty to related charges.

“It is illegal to sell drugs and controlled substances as dietary supplements,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The department will work with its law enforcement partners to prosecute individuals and companies that market potentially dangerous products, such as designer steroids, in violation of the Controlled Substances Act and the Federal Food, Drug and Cosmetic Act.”   

“Products mislabeled as dietary supplements can pose a serious risk to the health of U.S. consumers,” said Special Agent in Charge Justin C. Fielder of the FDA Office of Criminal Investigations (FDA-OCI) Miami Field Office. “We will continue to investigate and bring to justice those who jeopardize the public health by selling violative products.”

Boccuzzi was remanded to the custody of the U.S. Marshals following trial, and he is scheduled to be sentenced on Feb. 17, 2022, in Fort Lauderdale before U.S. District Judge William P. Dimitrouleas of the Southern District of Florida. Boccuzzi faces a maximum penalty of 15 years in prison. Braun, Singerman, and Blackstone are scheduled to be sentenced on Jan. 27, 2022. The court will determine any sentences after considering the U.S. Sentencing Guidelines and other statutory factors.

The trial and plea agreements resulted from a multi-year investigation conducted by the FDA-OCI Miami Field Office.

Trial Attorneys Alistair Reader and Stephen Gripkey, Senior Litigation Counsel David Frank, and Assistant Director John W. Burke of the Civil Division’s Consumer Protection Branch are prosecuting the cases with assistance from Assistant U.S. Attorney Daren Grove of the Southern District of Florida.

United States Attorney Bob Murray announced today that CALVIN ANDERSON WHITE, 32, of Ethete, Wyoming was charged by indictment for assault by strangulation. White appeared for an arraignment hearing before United States Magistrate Judge Teresa M. McKee on

December 3, 2021 and pleaded not guilty to the charges. A trial has been set for January 31, 2022 and the defendant was remanded to the custody of the United States Marshals Service.

According to the indictment, on or about October 25, 2020, White did knowingly assault the victim by strangling and attempting to strangle her. If convicted, White faces up to 10 years imprisonment, up to a $250,000 fine, three years of supervised release and a $100 special assessment.

This crime is being investigated by the Federal Bureau of Investigation with assistance from the Bureau of Indian Affairs. Assistant United States Attorney Timothy W. Gist is prosecuting the case.  

An indictment merely contains allegations, and every defendant is presumed innocent unless and until proven guilty.

Case No. 21-cr-00123-SWS

The Department of Justice announced today that it has awarded more than $17.5 million in grants to support the Project Safe Neighborhoods (PSN) Program. Funding will support efforts across the country to address violent crime, including the gun violence that is often at its core.

The Bureau of Justice Assistance, part of the department’s Office of Justice Programs (OJP), will administer the 88 grant awards, which are being made to designated fiscal agents to support local PSN projects that work in partnership with U.S. Attorneys’ Offices.

“This latest Project Safe Neighborhoods grant is critical to addressing the violent crime threatening cities and towns all across our country,” said Deputy Attorney General Lisa O. Monaco. “Ensuring the safety of all Americans is the highest priority for the Department of Justice, but when it comes to violent crime, there is not a one-size-fits-all solution. We have to work closely with local public safety agencies as well as community organizations to craft individual strategies unique to each community’s needs. Programs like Project Safe Neighborhoods and the funding it provides allow us to do just that.”

“Investing in our communities, supporting victims and building a justice system that both keeps people safe and earns their trust – these are mutually reinforcing goals that stand at the heart of Project Safe Neighborhoods,” said Principal Deputy Assistant Attorney General Amy L. Solomon for OJP. “The Office of Justice Programs is pleased to join with our U.S. Attorneys’ Offices, and with jurisdictions across the country, as we work together to meet the challenges of crime and violence and achieve our shared aspirations of public safety and community trust.”

In May 2021, Attorney General Merrick B. Garland announced a new effort to reduce violent crime, including the gun violence that is often at its core. Integral to that effort was the reinvigoration of PSN, a two-decade old, evidence-based and community-oriented program focused on reducing violent crime. The updated PSN approach, outlined in the department’s Comprehensive Strategy for Reducing Violent Crime issued by Deputy Attorney General Monaco, is guided by four key principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence, setting focused and strategic enforcement priorities and measuring the results of our efforts. The fundamental goal is to reduce violent crime, not simply to increase the number of arrests or prosecutions.

This fall, U.S. Attorney’s Offices across the country enhanced their violent crime reduction efforts to ensure alignment with the department’s comprehensive violent crime reduction strategy. U.S. Attorneys’ Offices engaged in outreach to law enforcement and other agencies and organizations serving communities to identify the most significant drivers of violence in their districts. Working together with a broad coalition of stakeholders, the U.S. Attorneys’ Offices are addressing the most pressing violent crime issues in their district to make our neighborhoods safer for all.

PSN programs are led by U.S. Attorneys’ Offices in collaboration with local public safety agencies, community stakeholders and other agencies and organizations that work to reduce violent crime.

For a list of all grantees, please visit: https://www.ojp.gov/sites/g/files/xyckuh241/files/media/document/FY21-Project-Safe-Neighborhoods-Awards.pdf  

Information about these and other FY 2021 grant awards from the Office of Justice Programs can be found online at the OJP Grant Awards Page.

The Office of Justice Programs provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims and enhance the rule of law. More information about OJP and its components can be found at www.ojp.gov.

Hagatña, Guam – SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that the following defendants were sentenced in the United States District Court of Guam for conspiracy to rig bids:

Thomas E. Marler, 62, of Piti, Guam, was sentenced to 12 months and 1 day of imprisonment for Conspiracy to Restrain Trade, in violation of 15 U.S.C. § 3, Money Laundering, in violation of 18 U.S.C. §§ 1957 and 2, and Conspiracy to Commit Money Laundering, in violation of 18 U.S.C. § 1956(h). The court ordered 2 years of supervised release, a fine of $20,000, and a special assessment fee of $300.

John Hobart “Bart” Lawrence, 62, of Gresham, Oregon was sentenced to 4 months of imprisonment for Conspiracy to Restrain Trade, in violation of 15 U.S.C. § 3 and Conspiracy to Commit Wire Fraud, in violation of 18 U.S.C.§§ 1349 and 1343. The court ordered 1 year of supervised release, a $4,000 fine, and a special assessment fee of $200

Jayanika Lawrence, 33, of Gresham, Oregon was sentenced to one year probation for Unlawfully Cutting Trees on United States Lands, in violation of 18 U.S.C. § 1853. The court ordered a $25 special assessment fee.

From November 2014 to June 2015, Thomas E. Marler conspired with John Hobart Lawrence and Jayanika Lawrence to rig bids for federally-funded project work pursuant to cooperative agreements between the federal government and the University of Guam (UOG).  During this time, Marler was a Professor at UOG as well as the Principal Investigator for certain federally-funded cooperative agreements where his responsibilities included bidding out and awarding project work in compliance with UOG’s procurement process. However, instead of soliciting bids from the Guam community, Marler produced fictitious bids in order to make the procurement process appear legitimate and awarded the project work to Isla Paraiso, a company controlled by Marler, and to Sansar Consulting, a company owned by Jayanika Lawrence and operated with the help of John Lawrence, Marler’s longtime friend and associate. During the time of the conspiracy, the defendants fraudulently obtained over $200,000 in project work.

“A competitive bidding process promotes fairness among those seeking government funded projects,” stated United States Attorney Anderson.  “It also ensures that taxpayers are getting the most value for their money.  The defendants’ actions undermined this process to the detriment of others, including UOG.  Our office applauds our federal partners for their hard work in bringing these defendants to justice.”

"Thomas Marler used his position as principal investigator between the University of Guam and the Department of the Navy to manipulate governmental contracts that were favorable to Isla Paraiso, a company he controlled," said FBI Special Agent in Charge Steven Merrill.  "Marler and his associate, John Lawrence, conspired to restrain trade to benefit themselves and then Marler laundered the proceeds of this crime.  This investigation into the activities of Thomas Marler and his co-conspirators, John and Jayanika Lawrence, sends a clear message that the FBI, working with our federal partners in the Internal Revenue Service and the Naval Criminal Investigative Service, will continue to hold individuals accountable when they violate federal laws and to protect the integrity of the federal government's contract process." 

“Mr. Marler, Mr. Lawrence, and Ms. Lawrence conspired together out of greed to unfairly profit themselves, and they did so at the expense of other businesses operating in an honest manner” said Bret Kressin, IRS Criminal Investigation (IRS-CI) Special Agent in Charge, Seattle Field Office. “Fair business practices exist to promote opportunities for everyone, and IRS-CI will continue to investigate those who cheat and choose not to play fairly.”   

The underlying investigation was conducted by the Federal Bureau of Investigation, Internal Revenue Service Criminal Investigation, and Naval Criminal Investigative Service.  The case was prosecuted by Benjamin K. Petersburg, Assistant United States Attorney in the District of Guam.

A former Drug Enforcement Administration (DEA) special agent was sentenced today to 145 months, or more than 12 years, in prison for operating a money laundering and fraud scheme while serving as a special agent with the DEA.

According to court documents, Jose I. Irizarry, 46, of Dorado, Puerto Rico, pleaded guilty on Sept. 14, 2020, to all counts in a 19-count indictment that included conspiracy to commit money laundering, honest services wire fraud, bank fraud, and aggravated identity theft. According to the indictment and his plea agreement, the scheme began shortly after Irizarry filed for personal bankruptcy protection in 2010. Irizarry used his position as a special agent to divert approximately $9 million from undercover DEA money laundering investigations to himself and to co-conspirators. In return, Irizarry received bribes and kickbacks worth at least $1 million for himself and his family, which was used to purchase jewelry, luxury cars, and a home. To carry out the scheme, Irizarry and his co-conspirators used a stolen identity to open a bank account under false pretenses and then utilized the account to receive diverted drug proceeds. The scheme lasted throughout Irizarry’s assignments to the DEA’s Miami Field Division and to its office in Cartagena, Colombia.

“The Department of Justice has zero tolerance for abuse of public office and is committed to ferreting out and prosecuting corruption wherever found, especially among the ranks of law enforcement,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.

“Public corruption is the FBI’s top criminal investigative priority, and we will not be deterred in our commitment to expose the deceitful even if it means arresting a former federal agent,” said Special Agent in Charge Michael McPherson of the FBI’s Tampa Field Office. “The FBI and its federal, state, and local law enforcement partners will remain steadfast and focused on the work to maintain the public’s trust in government.”

“Former Special Agent Irizarry abused the trust of the American people when he repeatedly violated his oath as a federal law enforcement officer,” said Administrator Anne Milgram of the DEA. “Bringing him to justice reflects the principles of those who faithfully serve and uphold the values of DEA. The men and women of DEA remain committed to protecting our communities and holding all accountable who engage in drug-related crimes. I commend our federal law enforcement partners who investigated this case with utmost professionalism and the prosecutors who worked tirelessly to bring Irizarry to justice.”

“This is an egregious breach of the trust by a federal agent who was sworn to protect and serve the American people,” said Special Agent in Charge John Condon of Homeland Security Investigations (HSI) Tampa Field Office. “While his actions are uncharacteristic of the dedication and integrity demonstrated by the vast majority of government employees, this case should send a message about the serious consequences facing those who would exploit their positions and violate that special trust.”

“Irizarry betrayed his oath to serve and instead used his position to further the criminal activities of a violent drug cartel while enriching himself,” said Special Agent in Charge Brian Payne of IRS-Criminal Investigation (IRS-CI). “While his actions represent an egregious breach of the public trust, they are in no way a reflection of the overwhelming majority of special agents who serve with honor and integrity. IRS-CI will take every step necessary to ferret out those who cave into temptation and grossly misuse their power.”

“We trust law enforcement officials to uphold the oath and bring criminals to justice,” said Special Agent in Charge James F. Boyersmith of the Department of Justice Office of the Inspector General (OIG) Miami Field Office. “Instead, Irizarry actively participated in drug trafficking and money laundering schemes. But today, justice was served. He will rightly serve time for his crimes.”

Irizarry was also ordered to pay $11,233 in restitution and forfeit his interests in a diamond ring and a luxury sports car.

At the conclusion of today’s sentencing in Tampa, Florida, U.S. District Judge Charlene E. Honeywell ordered Irizarry to begin serving his term of imprisonment immediately. Irizarry was remanded into the custody of the U.S. Marshals Service for transfer to the Federal Bureau of Prisons.

The FBI, DEA, HSI, IRS-CI and the Department of Justice OIG investigated the case.

Senior Trial Attorney Mark A. Irish and Deputy Chief Joseph Palazzo of the Criminal Division’s Money Laundering and Asset Forfeiture Section prosecuted the case, with assistance from Acting U.S. Attorney Kurt Erskine of the Northern District of Georgia.

Note: Mahesh Patel was acquitted by the court of the charges alleged in the criminal complaint described in the press release below.

The U.S. District Court for the District of Connecticut unsealed a criminal complaint accusing a former aerospace outsourcing executive of participating in a long-running conspiracy with managers and executives of several outsource engineering suppliers (Suppliers) to restrict the hiring and recruiting of engineers and other skilled laborers among their respective companies.

According to the filed documents, Mahesh Patel, of Glastonbury, Connecticut, a former director of global engineering services at a major aerospace engineering company, enforced this agreement while serving as an intermediary between conspiring Suppliers. Patel appeared remotely before a federal court in Hartford, Connecticut, on Tuesday after his arrest on the complaint charging him with conspiracy in restraint of trade. He was released on conditions including travel restrictions and a $100,000 appearance bond. The charge against Patel is the first in this ongoing federal antitrust investigation.

“The Antitrust Division, together with our law enforcement partners, have prioritized rooting out conspiracies in labor markets,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Here, thousands of workers have been victimized over a long period of time. We will vigorously prosecute this and other cases in which corporate executives undermine the careers of their own workers in order to reap undeserved profits and deprive our fellow citizens of opportunities to earn a competitive wage.”

“Given the significance of major defense and aerospace companies to Connecticut’s economy, it is vital that the labor market in this industry remain fair, open and competitive to our workers,” said Peter S. Jongbloed, Counsel to the U.S. Attorney for the District of Connecticut. “No one should be illegally denied the opportunity to pursue better jobs, higher pay and greater benefits. We look forward to continuing the partnership with the Antitrust Division and our law enforcement partners in prosecuting this important case.”

“Protecting the integrity of the Department of Defense (DoD) procurement process is a top priority for the DoD Office of Inspector General’s Defense Criminal Investigative Service (DCIS),” said Principal Deputy Director James R. Ives of the DCIS. “We are committed to working with the Antitrust Division and the U.S. Attorney’s Office for the District of Connecticut to hold companies and individuals accountable for practices that erode public trust and confidence in the DoD industry.”

According to the affidavit filed in support of the criminal complaint, Patel upheld a conspiracy among aerospace companies not to hire or recruit one another’s employees. At times, Patel confronted and berated Suppliers who cheated on the agreement, often at the direct behest of another Supplier, and threatened to punish nonconforming Suppliers by taking away valuable access to projects. In addition, as the complaint alleges, Patel and co-conspirators recognized the mutual financial benefit of this agreement — namely, reducing the rise in labor costs that would occur when aerospace workers were free to find new employment in a competitive environment.

The maximum penalty for conspiracy to restrain trade under the Sherman Antitrust Act is 10 years of imprisonment and a fine of $1 million for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  

The charges are the result of an ongoing federal antitrust investigation into market allocation in the aerospace engineering services industry, conducted by the Antitrust Division’s New York Office, the U.S. Attorney’s Office for the District of Connecticut, and the New Haven and New York Resident Agencies of the DCIS. Anyone with information in connection with this investigation should contact the Antitrust Division’s Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.

A criminal complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.