District Not Recorded

Hagatña, Guam – SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant Jesse Cruz Camacho, age 57, from Harmon, Guam was sentenced in the United States District Court of Guam to twenty-four months imprisonment for Theft of Government Property, in violation of 18 U.S.C. § 641.  The Court also ordered two years of supervised release following imprisonment, 100 hours of community service, restitution to the Navy Exchange Guam in the amount of $261,036.96, and a mandatory $1,375.00 special assessment fee. 

Jesse Cruz Camacho was employed as a chargeback clerk with the Navy Exchange Guam (NEX). From June 2016 to October 2019, Camacho used his knowledge and access at the NEX to steal over $250,000 worth of electronics, laptops, and other items. Camacho then disposed of the itemsby selling them on a Facebook social media account and by other means. NEX Loss Prevention discovered the thefts and reported the case to the United States Naval Criminal Investigative Service (NCIS).

U.S. Attorney Anderson stated, “This prosecution and the custodial sentence imposed highlight the seriousness of this crime.  We commend NEX Loss Prevention for their vigilance and investigative efforts. Their partnership with NCIS serves to effectively detect and deter criminal conduct involving the loss of federal property.”

This case was investigated by the United States Naval Criminal Investigative Service and prosecuted by Benjamin K. Petersburg, Assistant United States Attorney in the District of Guam.

 A federal grand jury in Las Vegas, Nevada, returned an indictment today charging a Las Vegas husband and wife with conspiring to defraud the IRS, tax evasion, filing a false tax return, assisting in the filing of false tax returns, and failing to file tax returns and pay federal income taxes.

According to allegations in the indictment, from at least 2005 through at least 2020, Scott H. Lawrence, a real estate professional, and Debra R. Lawrence, an owner of an interior design business, conspired to conceal their income and true financial condition from the IRS and to obstruct the IRS’s efforts to collect their unpaid tax liabilities. As part of the scheme, Scott and Debra Lawrence allegedly submitted to the IRS false documents, including false tax returns and collection information statements, that understated their true income. The indictment further alleges that Scott and Debra Lawrence sought to evade the payment of taxes owed for tax years 2005 to 2010 by cashing substantial portions of paychecks, thereby thwarting IRS levies and collection actions, and that they willfully failed to pay taxes for tax years 2014 to 2018. In total, Scott and Debra Lawrence are alleged to have caused a tax loss to the IRS of approximately $1,758,128.

Scott and Debra Lawrence are scheduled to make their initial court appearances on August 11, 2021, before U.S. Magistrate Judge Youchah of the U.S. District Court for the District of Nevada. If convicted, each defendant faces a maximum penalty of five years in prison for conspiracy to defraud the United States and for each count of tax evasion; three years in prison for each count of filing a false tax return and assisting in the filing of false tax returns; and one year in prison for each count of failing to file a tax return and failing to pay income taxes. 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 Acting U.S. Attorney Christopher Chiou for the District of Nevada made the announcement.

The IRS-Criminal Investigation is investigating this case.

Trial Attorneys Valerie Preiss and Patrick Burns 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.

The Justice Department announced today a settlement agreement with Florida’s Volusia County School District (VCS) to address the district’s systemic and discriminatory practices that punish students with disabilities for their disability-related behavior and deny them equal access to VCS’s programs and services.

The department conducted an investigation under Title II of the Americans with Disabilities Act (ADA) after the U.S. Attorney’s Office for the Middle District of Florida received a complaint from a local legal aid organization on behalf of several students, many of whom have Autism Spectrum Disorder. The complaint alleged that VCS unnecessarily excluded students with disabilities from the school’s education programs and services by regularly: (1) requiring parents or guardians to pick up their children with disabilities from school or to keep them home; (2) disciplining students for behavior resulting from their disability; and (3) engaging with law enforcement to remove students with disabilities, one as young as kindergarten age, from school.

The department’s investigation substantiated the allegations in the complaint, confirming that VCS had excluded students with disabilities from its programs and services through unnecessary removals from the classroom.  It also found that VCS staff often failed to implement necessary behavioral supports and lacked training on how to properly respond to students’ disability-related behavior. These issues led to the exclusion of students with disabilities from VCS’s programs and services and, at times, resulted in calls to law enforcement to remove students with disabilities from school, including through the misuse of Florida’s Baker Act procedures. The Baker Act permits the involuntary admission of a person with a mental illness to a psychiatric facility for up to 72 hours if certain criteria are met.

“Students should never be denied their education on the basis of disability, and we will not yield until the full measure of rights guaranteed by the ADA is a reality for all,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The department is committed to enforcing the law to make sure schools meet the needs and respect the rights of all their students.”

“We are appreciative that VCS cooperated with our investigation, recognized the opportunity to improve, and has committed to the successful implementation of our agreement,” said Acting U.S. Attorney Karin Hoppmann for the Middle District of Florida. “We look forward to working with the district to improve educational opportunities for all students.”

The U.S. Attorney’s Office for the Middle District of Florida worked in collaboration with the Civil Rights Division’s Disability Rights Section (DRS) to investigate this case.

The enforcement of Title II of the ADA in schools is a top priority of the department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt, and additional information about the work of the DRS is available at https://www.ada.gov.  Members of the public may report possible civil rights violations at https://civilrights.justice.gov/report/.  Information about the Civil Rights Unit of the United States Attorney’s Office for the Middle District of Florida and a complaint form for the unit can be found at https://www.justice.gov/usao-mdfl/civil-rights.

Arriva Medical LLC (Arriva), at one point the nation’s largest Medicare mail-order diabetic testing supplier, and its parent, Alere Inc. (Alere), have agreed to pay $160 million to resolve allegations that they violated the False Claims Act.

Until it ceased business operations in December 2017, Arriva was a mail-order diabetic testing supply company based in Coral Springs, Florida. Alere is a medical device company now based in Abbott Park, Illinois. Alere acquired Arriva in November 2011. The settlement resolves allegations that Arriva and Alere made, or caused, claims to Medicare that were false because kickbacks were paid to Medicare beneficiaries, patients were ineligible to receive meters, or patients were deceased. 

“Paying illegal inducements to Medicare beneficiaries in the form of free items and routine copayment waivers can result in overutilization and waste taxpayer funds,” said Acting Assistant Attorney General Brian M. Boynton for the Justice Department’s Civil Division. “We will continue to protect the integrity of the Medicare program by pursuing fraudulent claims arising from violations of the Anti-Kickback Statute or other applicable reimbursement requirements.” 

The United States alleged that, from April 2010 until the end of 2016, Arriva, with Alere’s approval, paid kickbacks to Medicare beneficiaries by providing them “free” or “no cost” glucometers and by routinely waiving, or not collecting, their copayments for meters and diabetic testing supplies. Specifically, the United States alleged that Arriva advertised that glucometers would be “free,” and then during intake calls offered Medicare beneficiaries a “no cost guarantee,” under which Arriva would provide the meters at “no cost” if Medicare denied payment, which typically happened because the beneficiaries were not yet entitled to a new glucometer paid for by Medicare. Arriva also allegedly offered and provided existing customers “free” additional meters to induce them to reorder testing supplies from Arriva.

Arriva also allegedly routinely waived, and failed to make reasonable efforts to collect, Medicare copayments. It allegedly failed to send invoices to beneficiaries, and failed to take other basic steps, like sending collection letters or making phone calls, to collect copayments. Specifically, Arriva allegedly systematically waived “small” dollar copayments without informing beneficiaries of their copayment obligations by sending them an invoice, and allegedly automatically waived other unpaid copayments after sending no more than three invoices seeking payment and making no other collection efforts. Arriva also allegedly waived copayments when customers complained that Arriva had advertised and otherwise indicated that their supplies would be free or at no cost.

“The False Claims Act and related statutes exist to protect the public fisc and to ensure companies do not benefit from unfair competition by gaining an illegal advantage over competitors,” said Acting U.S. Attorney Mary Jane Stewart for the Middle District of Tennessee. “When companies engage in such practice, they can expect to be held accountable for their actions.”

“Engaging in activities that result in the submission of false claims to Medicare diverts funding from the necessary treatment and medical supplies beneficiaries need,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “We will continue working with our law enforcement partners to hold accountable those who seek to enrich themselves by submitting false claims to federal health care programs.”  

“The TBI is diligent in pursuing false claims allegations such as these,” said Director David Rausch of the Tennessee Bureau of Investigation. “The partnership we have with our federal counterparts is key in combating healthcare fraud.”

The settlement also resolves allegations that Arriva and Alere caused the submission of false claims to Medicare for glucometers because Arriva, with Alere’s approval, allegedly systematically provided to all of its new patients, and billed Medicare for, a meter without regard to the patients’ eligibility for one. Medicare beneficiaries are only eligible to seek reimbursement for a new meter once every five years. Arriva also allegedly repeatedly billed Medicare for new meters for existing patients where Arriva itself had previously billed Medicare for meters for those patients within the five-year window.

Finally, the settlement resolves claims that Arriva submitted false claims to Medicare on behalf of deceased beneficiaries. In November 2016, the Medicare program revoked Arriva’s Medicare supplier number for doing so.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Gregory Goodman, a former employee at an Arriva call center in Antioch, Tennessee. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The Act also permits the United States to intervene and take over the litigation of such actions, as the United States did here. Mr. Goodman will receive $28,548,749 as his share of the recovery. The qui tam case is captioned United States ex rel. Goodman v. Arriva Medical LLC et al., Case No. 3:13-cv-00760 (M.D. Tenn.).

Arriva’s founders, David Wallace and Timothy Stocksdale, previously paid $1 million to resolve allegations that they participated in the kickback scheme. Ted Albin and Albin’s company, Grapevine Billing and Consulting Services Inc., are not parties to the settlement and remain defendants in the ongoing litigation. The United States filed suit against Albin and Grapevine shortly after it intervened in the qui tam action against Arriva and Alere.

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the Middle District of Tennessee, HHS-OIG, and the Tennessee Bureau of Investigation.

The investigation and resolution of this matter illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The matter was handled by Trial Attorney Jake M. Shields of the Civil Division and Assistant U.S. Attorney Ellen Bowden McIntyre of the Middle District of Tennessee.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

A federal jury in the U.S. District Court for the District of Columbia convicted an Arkansas man on Friday for fraudulently arranging for a labor union to provide health plan coverage to his girlfriend, who was never a union employee.  

According to court documents and evidence presented at trial, Roderick Marvin Bennett, 53, of Camden, the former chief of staff for Laborers International Union of North America (LIUNA) in Washington, D.C., was convicted by a jury of one count of health care fraud. The charges stemmed from Bennett, unbeknownst to LIUNA, placing his girlfriend on the health care plan designed for employees at LIUNA’s headquarters when he knew she was not eligible to participate in the plan. 

“The jury’s conviction affirms the Justice Department’s efforts to rid our health care delivery systems of corrupt influences and our pursuit of those who would exploit those systems through fraudulent means,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “Department of Labor investigators worked diligently with our prosecutors to ensure that individuals, such as Bennett, who are sworn to safeguard their members’ dues and health and pension plans do not exploit those plans for personal gain.”

LIUNA is a labor organization that represents more than 500,000 laborers in the construction industry in the United States and Canada. For approximately four years, until October 2016, Bennett served as the chief of staff at LIUNA headquarters. The current conviction is in addition to Bennett’s January 2018 guilty plea to three counts of theft from a labor organization stemming from his unauthorized personal purchases – exceeding $150,000 – on his LIUNA-issued American Express card. 

Bennett will be sentenced for his convictions at a later date and faces up to five years in prison. Any sentence will be determined after considering the U.S. Sentencing Guidelines and other statutory factors.

The U.S. Department of Labor investigated the case.

Trial Attorneys Vincent Falvo and Jeremy Franker of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case.

A federal jury in the Eastern District of Wisconsin on Thursday convicted the former chief financial officer of Roadrunner Transportation Systems Inc. (Roadrunner), a publicly traded trucking and logistics company formerly headquartered in Cudahy, Wisconsin, on four counts of violating federal securities laws for his role in a complex securities and accounting fraud scheme.

According to court documents and evidence presented at trial, Peter R. Armbruster, 62, of Milwaukee, the former chief financial officer (CFO) of Roadrunner, whose shares were traded on the New York Stock Exchange using the ticker symbol #RRTS, committed securities fraud, falsified Roadrunner’s books and records, and misled Roadrunner’s auditors. Armbruster was convicted in relation to a sophisticated accounting fraud scheme that resulted in Roadrunner’s financial statements and Securities and Exchange Commission filings for the third quarter of 2016 being materially false and fraudulent.

Armbruster was convicted of one count of securities fraud, one count of misleading Roadrunner’s auditors, and two counts of falsifying Roadrunner’s books and records. He is scheduled to be sentenced on Oct. 29 before U.S. District Judge Matthew F. Kennelly. He faces a maximum prison sentence of 25 years' imprisonment for securities fraud, 20 years imprisonment for misleading auditors, and 20 years' imprisonment for each books and records violation. Judge Kennelly 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, Special Agent in Charge Robert E. Hughes of the FBI’s Milwaukee Field Office and Special Agent in Charge Andrea Kropf of the Department of Transportation – Office of Inspector General’s Chicago Field Office made the announcement.

The FBI’s Milwaukee Field Office and the Department of Transportation’s Office of Inspector General are investigating the case. 

Trial Attorneys Emily Scruggs and Kyle Hankey and Acting Principal Assistant Chief Justin Weitz of the Criminal Division’s Fraud Section prosecuted the case. Assistant U.S. Attorney Caitlin R. Cottingham, formerly of the Criminal Division’s Fraud Section, provided valuable assistance.

The Fraud Section is the nation’s leading prosecuting authority for complex white-collar criminal cases, including accounting and securities fraud cases involving public companies.

Hussey Copper has agreed to perform a comprehensive environmental audit, implement an updated environmental management system, and pay an $861,500 penalty to resolve alleged violations of the federal Clean Water Act (CWA) and Pennsylvania’s Clean Streams Law (PCSL) at its smelting facility in Leetsdale, Allegheny County, Pennsylvania.

The civil complaint, brought by the U.S. Department of Justice on behalf of the U.S. Environmental Protection Agency (EPA) and the Pennsylvania Department of Environmental Protection (PADEP) and filed simultaneously with the settlement, alleges violations of the CWA and PCSL that threaten to degrade receiving streams and impact public health and harm aquatic life. These include chronic exceedances of effluent limits in the facility’s PADEP-issued CWA permit -- limiting oil sheens and discharges of copper, chromium, nickel, oil and grease, lead, pH, total suspended solids and zinc.

“This settlement reaffirms that industrial polluters must do the necessary work to ensure that their operations are not causing harm to our nation’s waterways,” said Deputy Assistant Attorney General Jean E. Williams for the Justice Department’s Environment and Natural Resources Division. “We are happy to have partnered with the Commonwealth of Pennsylvania to ensure the continued protection of the Ohio River.”

“This agreement holds Hussey Copper accountable for the impact their actions have had on the health of the Ohio River,” said Acting U.S. Attorney Stephen R. Kaufman for the United States Attorney’s Office for the Western District of Pennsylvania. “We will continue to work with our partners to enforce the laws enacted to protect our region’s abundant natural resources.

“Today’s settlement improves water quality for the citizens of Leetsdale and surrounding communities,” said Acting Assistant Administrator Larry Starfield for the EPA’s Office of Enforcement and Compliance Assurance. “This agreement requires Hussey to address their existing environmental violations, as well as implement plans to address any future noncompliance.”

Under the settlement, along with payment of the penalty, Hussey Copper will:

• Conduct a comprehensive review of its wastewater treatment system.
• Hire third-party consultants to conduct a compliance audit and implement corrective measures.
• Hire third-party consultants to review, update, and audit compliance with the facility’s environmental management system.
• Implement a process to prevent and correct violations of permit effluent limits.
• Conduct annual compliance training of employees and contractors.

Pay agreed-upon penalties on demand for future violations.
PADEP has assisted EPA in the investigation and litigation of this case and is a co-plaintiff and signatory to the proposed consent decree. Under the settlement, penalty funds will be distributed evenly between the United States and PADEP.

Previous to this settlement, Hussey Copper was ordered to pay a criminal fine of $550,000 and to serve three years’ probation after pleading guilty to three felony CWA charges in December 2020 for offenses involving a multi-year pattern of submitting false discharge monitoring reports to conceal 140 National Pollutant Discharge Elimination System (NPDES) permit violations, discharges of oil into the Ohio River, and the failure to report those oil discharges to the federal government.

The settlement is with Libertas Copper LLC, which does business as Hussey Copper. 

This settlement furthers EPA’s national compliance initiative to reduce significant noncompliance and improve surface water quality by assuring dischargers comply with NPDES permit requirements. For more information on this initiative, visit: https://www.epa.gov/enforcement/national-compliance-initiative-reducing-significant-non-compliance-national-pollutant

More information on the Clean Water Act is available at: https://www.epa.gov/laws-regulations/summary-clean-water-act

More information on Pennsylvania’s Clean Streams Law is available at: https://www.dep.pa.gov/Citizens/My-Water/Pages/default.aspx

The proposed consent decree, filed in the federal district court in Pittsburgh, is subject to a 30-day public comment period and approval by the court.

A Florida man was sentenced today to 33 months in prison for fraudulently seeking over $7,263,564 in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Andre Clark, 48, of Miramar, pleaded guilty to one count of conspiracy to commit wire fraud on May 14, 2021. According to court documents, Clark admitted that he obtained a PPP loan of $488,565 on behalf of his company, Top Choice LLC, based on falsified information and documents that a co-conspirator, James Stote, submitted on his behalf.  Clark also admitted to recruiting friends and associates whom he referred to Stote for the purpose of submitting additional fraudulent PPP loan applications, sometimes in exchange for kickbacks. Clark admitted to seeking $6,774,999 in fraudulent PPP loans through other conspirators that he referred to the scheme. In addition to the prison sentence, Clark was ordered to pay $2,975,086 in restitution.

Additionally, two other co-conspirators were recently sentenced for their role in the scheme.  On July 29, 2021, Tonye Johnson, 29, of Philadelphia, Pennsylvania, was sentenced to 18 months in prison.  According to court documents, Johnson admitted to obtaining a fraudulent PPP loan of $389,627 for his company, Synergy Towing & Transport LLC, based on falsified information and documents.  And on July 13, 2021, Tiara Walker, 38, of Miami Gardens, Florida, was sentenced to 12 months and a day in prison.  According to court documents, Walker admitted to obtaining a fraudulent PPP loan of $258,575 for her company, Utilization Review Pros LLC, based on falsified information and documents.  Both Johnson and Walker falsely inflated the number of employees and monthly payroll for their companies, and they worked with Stote and other co-conspirators to obtain their fraudulent loans.

James Stote was charged by complaint on June 24, 2020, with wire fraud, bank fraud, and conspiracy to commit wire fraud, and his case remains pending.  A complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Acting U.S. Attorney Juan Antonio “Tony” Gonzalez of the Southern District of Florida; Special Agent in Charge Michael J. De Palma of the IRS Criminal Investigation (IRS-CI) Miami Field Office; Special Agent in Charge George L. Piro of the FBI’s Miami Field Office; and Special Agent in Charge Amaleka McCall-Brathwaite of the SBA’s Office of Inspector General (SBA-OIG) Eastern Region made the announcement.

The IRS-CI, FBI, and SBA-OIG investigated the cases.

Trial Attorney Philip Trout of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David Turken and David Snider of the U.S. Attorney’s Office for the Southern District of Florida prosecuted the cases.

The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the months since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $65 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at:  https://www.justice.gov/criminal-fraud/ppp-fraud.

In May, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form

The United States has intervened in six complaints alleging that members of the Kaiser Permanente consortium violated the False Claims Act by submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees in order to receive higher reimbursements.

The Kaiser Permanente consortium members (collectively Kaiser) are Kaiser Foundation Health Plan Inc., Kaiser Foundation Health Plan of Colorado, The Permanente Medical Group Inc., Southern California Permanente Medical Group Inc. and Colorado Permanente Medical Group P.C. Kaiser is headquartered in Oakland, California. 

“Medicare’s managed care program relies on the accuracy of information submitted by health care providers and plans to ensure that patients receive the appropriate level of care, and that plans receive the appropriate compensation,” said Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department’s Civil Division. “Today’s action sends a clear message that we will hold health care providers and plans accountable if they seek to game the system by submitting false information.” 

“The integrity of government health care programs must be protected,” said Acting U.S. Attorney Stephanie Hinds for the Northern District of California. “The Medicare Advantage Program maintains the health of millions, and wrongful acts that defraud the program cannot continue and will be pursued.”

“The federal government pays hundreds of billions of dollars every year to Medicare Advantage Plans,” said Acting U.S. Attorney Matt Kirsch for the District of Colorado. “The District of Colorado will vigorously pursue investigations with our partners to make sure that money supports necessary health care, not fraud.”

Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed care insurance plans called Medicare Advantage Plans (MA Plans). MA Plans are paid a per-person amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the diagnoses of each plan beneficiary. The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with more severe diagnoses will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.

Medicare requires that, for outpatient medical encounters, MA Plans submit diagnoses to CMS only for conditions that required or affected patient care, treatment or management during an in-person encounter in the service year. In order to increase its Medicare reimbursements, Kaiser allegedly pressured its physicians to create addenda to medical records after the patient encounter, often months or over a year later, to add risk-adjusting diagnoses that patients did not actually have and/or were not actually considered or addressed during the encounter, in violation of Medicare requirements.    

The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done, in part, in these cases. The cases are consolidated in the Northern District of California and captioned United States ex rel. Osinek v. Kaiser Permanente, 3:13-cv-03891 (N.D. Cal.); United States ex rel. Taylor v. Kaiser Permanente, et al., 3:21-cv-03894 (N.D. Cal.); United States ex rel. Arefi, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-01558 (N.D. Cal.); United States ex rel. Stein, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-05337 (N.D. Cal.); United States ex rel. Bryant v. Kaiser Permanente, et al., 3:18-cv-01347 (N.D. Cal.); and United States ex rel. Bicocca v. Permanente Med. Group, Inc., et al., No. 3:21-cv-03124 (N.D. Cal.).

This matter was investigated by the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Offices for the Northern District of California and the District of Colorado, with assistance from HHS-OIG.

The claims in which the United States has intervened are allegations only, and there has been no determination of liability. 

The Antitrust Division today commemorates National Whistleblower Appreciation Day, which celebrates individuals who act with courage to speak out and report crimes, including antitrust violations like price-fixing, bid rigging and market allocation conspiracies. Collusion among competitors undermines fair competition and harm consumers, and individuals who step forward to shine a light on illegal practices deserve recognition. This year marks the 243rd anniversary of the United States’ first whistleblower law and also the first year for the Criminal Antitrust Anti-Retaliation Act (CAARA), signed into law on Dec. 23, 2020.

“We acknowledge whistleblowers’ courage and conviction in the face of adversity — their protection has been critical in exposing illegal activity,” said Acting Assistant Attorney General Richard A. Powers for the Justice Department's Antitrust Division. “This year marks another milestone for these protections with the passage of the Criminal Antitrust Anti-Retaliation Act, a law that will further our efforts to root out antitrust crimes that undermine our economy and cheat American consumers, workers, and taxpayers of the benefits of free and fair competition.” 

CAARA provides legal protections for employees who blow the whistle on criminal antitrust violations by prohibiting employers from taking punitive actions against whistleblowers for reporting these violations to their employer or assisting a federal government investigation into a criminal antitrust violation. The law protects employees, contractors, subcontractors and agents of the employer. Detecting antitrust violations can prevent or reduce harm to victims of antitrust crimes. For example, by some estimates, eliminating bid rigging could reduce government procurement costs by 20% — a significant sum when the budget for discretionary spending on public procurement is more than $580 billion, as it was in 2019.     

Consistent with President Biden’s Executive Order on Promoting Competition in the American Economy, the Antitrust Division will continue to work in partnership with our colleagues at the U.S. Department of Labor to effectively implement CAARA’s whistleblower protections, including by offering antitrust training and providing guidance on federal antitrust law to the officials who administer CAARA at the Occupational Health and Safety Administration. To learn more about how to seek whistleblower protection under CAARA, please go to https://www.whistleblowers.gov/complaint_page.

The Antitrust Division maintains a Citizen Complaint Center, where concerned citizens may report antitrust concerns via email, U.S. mail or phone. The Procurement Collusion Strike Force, a department initiative led by the Antitrust Division, also encourages citizens to report complaints about antitrust and other crimes that affect government procurement at all levels — federal, state and local. 

Note: The charges against Defendants Justin Gay and Wesley Scott Tucker were dismissed on Aug. 11, 2022. The charges against Defendants Jason McGuire and Timothy Stiller were dismissed on Oct. 17, 2022.

A federal grand jury in Denver, Colorado, returned an indictment yesterday charging Koch Foods, headquartered in Park Ridge, Illinois, for participating in a nationwide conspiracy to fix prices and rig bids for broiler chicken products. Separately, a federal grand jury in Denver returned an indictment charging four executives for their roles in the same conspiracy.

According to court documents, the four charged former Pilgrim’s Pride executives are Jason McGuire, a former Executive Vice President of Sales for Prepared Foods; Timothy Stiller, a former General Manager of Fresh Food Services and Small Bird Debone; Wesley “Scott” Tucker, a former National Accounts sales executive; and Justin Gay, a former Director of Fresh Foodservice Sales.

The indictments allege that the defendants and co-conspirators conspired to suppress and eliminate competition for sales of broiler chicken products, which are chickens raised for human consumption and sold to grocers and restaurants. Koch’s senior vice president, William Kantola, is among ten individuals indicted in October 2020 for their roles in the conspiracy. On May 19, a grand jury returned an indictment against Claxton Poultry for its role in the same conspiracy, which today’s indictment supersedes. Pilgrim’s Pride, a major broiler chicken producer based in Greeley, Colorado, pleaded guilty and was sentenced in February 2021 to pay a criminal fine of $107 million for its role in the conspiracy. The long-running conspiracy began as early as 2012 and lasted until at least 2019.

“As today’s charges show, the division remains committed to holding both individuals and companies accountable when they choose profits over following the law,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “Our investigation into criminal price fixing of broiler chickens continues, and we will not stop until we ensure that wrongdoers are held accountable and competition is restored to this critical industry.”

“Price fixing is not a victimless crime, and the illegal actions taken by these companies and individuals in the broiler chicken industry have had a direct and negative impact on the American consumer,” said Assistant Director in Charge Steven M. D’Antuono of the FBI Washington Field Office. “The FBI is committed to pursuing those who violate antitrust laws, harming the nation’s free and competitive marketplace all for their own monetary gain.”

“Price fixing, bid rigging and related activities harm consumers and our system of free market competition,” said Scott Kieffer, Assistant Inspector General for Investigations at the U.S. Department of Commerce, Office of Inspector General. “We remain committed to working with the Department of Justice and our law enforcement partners to aggressively investigate and prosecute corrupt behavior in order to protect the integrity of our nation’s commerce.”

Koch Foods, McGuire, Stiller, Tucker and Gay are each charged with a violation of the Sherman Antitrust Act. Defendants McGuire, Stiller, Tucker and Gay will make their initial court appearances on Aug. 11 before U.S. Magistrate Judge Crews of the U.S. District Court for Colorado. Koch Foods’ initial appearance is also scheduled on Aug. 11 before U.S. Magistrate Judge Crews for the U.S. District Court for Colorado The Sherman Act carries a statutory maximum penalty of 10 years in prison and a $1 million fine for individuals, and a $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims, if either of those amounts is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

This case is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the broiler chicken industry, which is being conducted by the Antitrust Division with the assistance of the Department of Commerce Inspector General’s Office, the FBI’s Washington Field Office and the U.S. Department of Agriculture Inspector General’s Office. The case is being prosecuted by the Antitrust Division.

Anyone with information on price fixing, bid rigging or other anticompetitive conduct related to the broiler chicken industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.

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 Louisiana woman pleaded guilty today to a conspiracy to defraud the United States.

According to court documents, from January through April 2015, Brittany Patterson, of Jefferson Parish, and others conspired to file false tax returns for clients of Pelicans Income Tax and Payroll Services, a return preparation business located in Kenner and Westwego, Louisiana. Patterson and others prepared client returns reporting false income and withholdings in order to generate larger tax refunds. Patterson also filed a return for herself that claimed a false dependent, after obtaining the dependent’s personal identifying information from a client without the client’s knowledge. In total, Patterson and her co-conspirators caused a tax loss to the IRS of more than $550,000.

Patterson is scheduled to be sentenced on Jan. 5, 2022, and faces a maximum sentence of five years in prison. She 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.

On Nov. 14, 2019, Patterson pleaded guilty to a conspiracy to defraud the United States for filing false returns for clients of another tax preparation business, Crown Tax Service LLC. She is scheduled to be sentenced on Aug. 5 for that case.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Duane A. Evans for the Eastern District of Louisiana made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Jessica Kraft and William Montague of the Justice Department’s Tax Division and Assistant U.S. Attorney Carter Guice of the U.S. Attorney’s Office for the Eastern District of Louisiana are prosecuting the case.

The Department of Justice announced today that it will require Gray Television Inc. and Quincy Media Inc. to divest 10 broadcast television stations in seven local markets as a condition of resolving a challenge to Gray’s proposed $925 million acquisition of Quincy.

The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed merger. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the suit by remedying competitive harms alleged in the complaint, through the divestitures and related conditions.

“Without the required divestitures, Gray’s acquisition of Quincy threatens significant competitive harm to cable and satellite TV subscribers and small businesses that advertise on broadcast television,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “I am pleased that we have been able to reach a complete resolution of the department’s concerns, thanks in part to the parties’ commitment to engage in good faith settlement talks from the outset of our investigation.”

According to the complaint, without the divestitures the merger would eliminate head-to-head competition between Gray and Quincy broadcast television stations in seven local markets, which are centered in: Tucson, Arizona; Rockford, Illinois; Cedar Rapids, Iowa; Paducah, Kentucky; Eau Claire, Wisconsin; Madison, Wisconsin; and Wausau, Wisconsin.

The combined company likely would charge cable and satellite companies higher retransmission fees to carry its broadcast television stations in those local markets, resulting in higher monthly cable and satellite bills for millions of Americans. The merger also would enable the combined company to charge local businesses higher prices to advertise on its broadcast television stations in those local markets.

Under the terms of the proposed settlement, Gray and Quincy must divest 10 broadcast television stations to Allen Media Holdings LLC or an alternative acquirer approved by the United States. Allen Media currently owns and operates 14 broadcast television stations in 12 local markets.

Gray is a Georgia corporation with headquarters in Atlanta, Georgia. Gray owns 165 television stations in 94 local markets. In 2020, Gray reported revenues of $2.4 billion.

Quincy is an Illinois corporation headquartered in Quincy, Illinois. Quincy owns 20 television stations in 16 local markets. In 2020, Quincy earned revenues of approximately $338 million.

As required by the Tunney Act, the proposed settlement, along with a 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 to Scott Scheele, Chief, Media, Entertainment, and Communications Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 7000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the final judgment upon finding it is in the public interest.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Today the U.S. Department of Justice announced the release of two guidance documents to ensure states fully comply with federal laws regarding elections, specifically federal statutes affecting methods of voting and federal constraints related to post-election “audits.”

“The right of all eligible citizens to vote is the central pillar of our democracy, and the Justice Department will use all of the authorities at its disposal to zealously guard that right,” said Attorney General Merrick B. Garland. “The guidances issued today describe certain federal laws that help ensure free, fair, and secure elections. Where violations of such laws occur, the Justice Department will not hesitate to act.”   

“The Department of Justice is committed to protecting the right to vote for all Americans and ensuring states are complying with federal voting laws,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Whether through litigation or the issuance of official guidance, we are using every tool in our arsenal to ensure that all eligible citizens can exercise their right to vote free from intimidation, and have their ballots counted.”

The first guidance document, entitled “Guidance Concerning Federal Statutes Affecting Methods of Voting,” provides guidance regarding how eligible citizens cast their ballots. The guidance document addresses efforts by some states to permanently adopt their COVID-19 pandemic voting modifications, and by other states to bar continued use of those practices, or to impose additional restrictions on voting by mail or early voting. In addition, this guidance document discusses federal statutes the department enforces related to voting by mail, absentee voting and voting in person.

The second guidance document, entitled “Federal Law Constraints on Post-Election Audits,” provides information on the how states must comply with federal law when preserving and retaining election records and the criminal penalties associated with the willful failure to comply with those requirements. This guidance document also details the statutes that prohibit the intimidation of voters and the department’s commitment to act if any person engages in actions that violate the law.

Today’s announcements follow Attorney General Garland’s recent commitment to expand the Justice Department’s efforts to safeguard voting rights. For a list of the department’s actions to protect voting rights, click here.

More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice’s website at www.justice.gov/crt/about/vot.

Complaints about discriminatory voting practices may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

If jurisdictions have questions about the constraints federal law places on the methods of voting they are using or propose to use, or questions about the constraints federal law places on post-election “audits” regarding protections for voters and federal election records, they should contact the Voting Section of the Civil Rights Division.

For the guidance document on methods of voting, click here.

For the guidance document on post-election “audits,” click here.

The Justice Department announced today that it has filed a lawsuit against Wilson County, North Carolina, alleging that Wilson County Emergency Communications (WCEC) engaged in unlawful retaliation in violation of Title VII of the Civil Rights Act of 1964 when it terminated an employee after she disclosed to supervisors that she had been sexually harassed while on the job.

Title VII is a federal statute that not only prohibits employers from discriminating on the basis of sex, race, color, national origin and religion, but also from retaliating against employees for engaging in activities protected by Title VII, such as complaining about discrimination. 

As alleged in the lawsuit, filed in the Eastern District of North Carolina, Jennifer Riddle began working as a telecommunicator trainee for WCEC in 2017. Soon after she began her employment, she was sexually harassed by the Assistant Director of WCEC. According to the filing, Riddle complained of the harassment, and an investigation ensued. After WCEC’s investigation substantiated Riddle’s complaints, the county terminated the Assistant Director. However, as alleged in the lawsuit, soon after the Assistant Director’s termination, Riddle began experiencing hostility from her supervisor and co-workers, culminating in a transfer and, ultimately, termination, when she disclosed to the supervisors on her new shift that she had previously been sexually harassed and that WCEC failed to effectively deal with her harasser.

“The Civil Rights Division will not tolerate attempts by employers to silence victims of sexual harassment,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Discouraging employees from reporting potential harassment and discrimination to their supervisors stands in the way of efforts to identify and root out sex harassment in workplaces across the country. We will continue to hold employers accountable and take action to ensure that employees are free to come forward to report discrimination or harassment in the workplace.”

Riddle filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). The EEOC’s Charlotte District Office investigated the charge and made a reasonable cause finding. After unsuccessful conciliation efforts, the EEOC referred the charge to the Justice Department.

The United States, through this lawsuit, seeks to require WCEC to develop and implement policies that would prevent retaliation. The United States also seeks monetary relief for Riddle to compensate her for damages that she sustained as a result of the alleged retaliation.

The full and fair enforcement of Title VII is a top priority of the Justice Department’s Employment Litigation Section of the Civil Rights Division. Additional information about the Civil Rights Division and the jurisdiction of the Employment Litigation Section is available on its websites at www.justice.gov/crt/ and https://www.justice.gov/crt/employment-litigation-section. 

This case is being handled by Senior Trial Attorney Christopher Woolley and Trial Attorney Vendarryl Jenkins of the Civil Rights Division’s Employment Litigation Section.

A Mexican national was sentenced today in the U.S. District Court for the District of Columbia to 22 years in prison for her role in an international drug trafficking conspiracy to transport into the United States thousands of kilograms of cocaine and dozens of pounds of methamphetamine.

Following a seven-day jury trial in December 2019, Luz Irene Fajardo Campos, aka “La Comadre,” “La Madrina” and “La Doña,” 57, of Culiacan, Mexico, was convicted of conspiracy to distribute five kilograms or more of cocaine, and to manufacture and/or distribute 500 grams or more of methamphetamine in Mexico, Colombia, Honduras and elsewhere, knowing or intending that these substances would be unlawfully imported into the United States.

According to the evidence introduced at trial, Fajardo Campos led a drug trafficking organization with her adult children that was aligned with the Sinaloa cartel. She sourced cocaine directly from Colombia, employed pilots, and brokered the purchase of jets to fly the cocaine to Central America and Mexico. She partnered with other traffickers in the Sinaloa cartel and her children for further distribution of the cocaine into the United States. She also oversaw the importation of precursor chemicals into Mexico, which she processed into methamphetamine at a laboratory located in the desert outside Hermosillo, Mexico. She distributed this methamphetamine in Tucson, Arizona, and Jackson, Mississippi, among other locations. She also paid bribes to law enforcement officials in Mexico and Colombia to import cocaine through an international airport and attempted to bribe other public officials to secure the arrest of rival drug traffickers and the release of precursor chemicals seized at Mexican shipping ports.

“Luz Irene Fajardo Campos and her organization imported into the United States large quantities of cocaine and methamphetamine, bribing foreign law enforcement officers along the way, and then distributed those drugs across our communities,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “Her conviction and sentence demonstrate the department’s commitment to bring to justice those who pump dangerous drugs into our communities and fuel corruption in the process.”

 “With this sentencing, we cut the head off of the snake,” said Special Agent in Charge Cheri Oz of the Drug Enforcement Administration’s (DEA) Phoenix Field Division. “Drug traffickers like Fajardo Campos tear at the very fabric of our communities. She made millions of dollars from pushing thousands of pounds of poison into Americans' communities while at the same time fueling violence and crime across the United States. Today, justice was served.”

In addition to the prison sentence, Fajardo Campos was also ordered to serve five years of supervised release and forfeit $18 million.

The case was investigated by the DEA’s Tucson and Mexico City Country Offices.

Trial Attorneys Cole Radovich, Kaitlin Sahni and Imani Hutty of the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) and Anthony Aminoff, formerly of NDDS, prosecuted the case with significant assistance provided by the NDDS Judicial Attachés in Bogotá, Colombia, the Justice Department’s Office of International Affairs and the Criminal Division’s Office of Enforcement Operations.

The U.S. Department of Justice (DOJ) and the U.S. Environmental Protection Agency (EPA) announced that Advanced Flow Engineering (aFe), an automotive parts manufacturer and distributor based in Corona, California, has agreed to stop manufacturing and selling parts for motor vehicles that, when installed, defeat, disable or override EPA-approved emission controls and harm air quality.

The complaint, filed simultaneously with the settlement, alleges that aFe’s manufacture and sale of these parts violate the Clean Air Act. From 2014 to the present, aFe manufactured and/or sold over 63,000 of these parts, widely known as “defeat devices.” The company will also pay a $250,000 penalty, which was based on its financial situation.

“The products that aFe manufactured and sold jeopardized the public health by causing illegal emissions of dangerous pollutants, including particulate matter and nitrogen oxides (NOx),” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division (ENRD). “This case demonstrates that we will undertake necessary enforcement measures to eliminate the manufacture and sale of such devices to ensure that the vehicles on our roads meet required emission standards.”

“Today’s settlement will prevent the future sale of approximately 12,000 illegal product units per year,” said Acting Regional Administrator Deborah Jordan for EPA’s Pacific Southwest. “The increased particulate matter and NOx pollution stemming from defeat devices threatens the health of everyone, especially those with pre-existing health conditions, children and older adults. We also know that air pollution can lead to worse outcomes from COVID-19. It is unacceptable that the same communities that are being hit the hardest by the COVID-19 pandemic are often the same communities that bear the disproportionate impact of air pollution.”

Based on prior sales that are now prohibited under the settlement, EPA estimates that this enforcement action will prevent the release of approximately 112 million pounds of NOx and one million pounds of particulate matter from vehicles that would have been installed with aFe’s defeat devices.

Tampering with diesel and gasoline-powered vehicles by installing defeat devices can cause large amounts of NOx and particulate matter emissions, both of which contribute to serious public health problems. These include premature death, aggravation of respiratory and cardiovascular disease, aggravation of existing asthma, acute respiratory symptoms, chronic bronchitis and decreased lung function. Numerous studies also link diesel exhaust to increased incidence of lung cancer. Respiratory issues disproportionately affect families, especially children, living in underserved communities overburdened by pollution. Stopping the sale and use of defeat devices will help reduce harmful air pollution that exacerbates the health effects of pollutant exposures. 

The consent decree for this settlement was lodged in the U.S. District Court for the Central District of California and is subject to a 30-day public comment period and final court approval. A copy of the decree will be available on the Department of Justice website at: www.justice.gov/enrd/consent-decrees.

The enforcement action is part of EPA’s National Compliance Initiative that targets companies that manufacture, sell and install parts that disable vehicle emission controls. To learn more, visit: https://www.epa.gov/enforcement/national-compliance-initiative-stopping-aftermarket-defeat-devices-vehicles-and-engines

If you suspect someone is manufacturing, selling or installing illegal defeat devices, or is tampering with emission controls, tell the EPA by writing to tampering@epa.gov.

The Justice Department announced today that a former officer with the Meridian, Mississippi Police Department pleaded guilty to using excessive force against a man during a vehicle stop and arrest. 

According to court documents and statements made in court, Daniel Starks of Meridian, Mississippi, shoved the victim twice as he was getting handcuffed by another officer and then unlawfully used his taser against the victim, even though the victim was compliant and handcuffed. As a result of the tasing, the victim immediately fell to the ground and groaned in pain, his hands restrained behind his back and unable to break his fall. While the victim was still on the ground, Starks pointed the taser at him and demanded that he stand up or else he would be tased again.

“Law enforcement officials who violate people’s federal civil rights are not above the law. This defendant is being held accountable for exceeding his authority and his power when he violated the victim’s civil rights,” said Assistant Attorney General Kristen Clarke for the Department of Justice’s Civil Rights Division. “The Civil Rights Division will continue to investigate and prosecute cases involving police officers who willfully violate the constitutional rights of others.”

“Those who abuse their positions of power will be prosecuted according to the law,” said Acting U.S. Attorney Darren J. LaMarca for the Southern District of Mississippi. “This defendant chose to violate his duty and the law, the very law he swore to uphold, by his wanton and violent act against the victim. Justice is served.” 

“Law enforcement officers take an oath to serve and protect their communities,” said Acting Special Agent in Charge Paul Brown of the FBI Jackson Field Office. “When an officer breaks this oath and abuses the authority given to them, they must be held accountable. Investigating violations of civil rights will continue to be a priority for the FBI.” 

A sentencing hearing is scheduled for Oct. 26. The defendant faces a statutory maximum punishment of 10 years in prison and a $250,000 fine.

This case was investigated by the Jackson Division of the FBI. Assistant U.S. Attorney Chris Wansley of the Southern District of Mississippi and Special Litigation Counsel Julia Gegenheimer and Trial Attorney Cameron Bell of the Civil Rights Division are prosecuting the case. 

A federal jury in Greenbelt, Maryland, convicted a Washington, D.C., man Friday of conspiring to commit theft of public money, theft of public money and aggravated identity theft.

According to court documents and the evidence introduced at trial, from 2011 to 2013, Devell Lincoln, 55, conspired with Stephanie Twyman and others to cash tax refund checks fraudulently obtained by filing false federal income tax returns in the names of other individuals with the IRS. In total, the conspirators cashed more than $500,000 in fraudulent refunds at a check-cashing business, and Lincoln deposited more than $150,000 in fraudulent refunds using bank accounts under his control.

From 2011 to 2013, false federal income tax returns were filed with the IRS using the names and Social Security numbers of unwitting taxpayers and seeking fraudulent refunds. When the refunds were received, Lincoln and his co-conspirators cashed the checks at a check-cashing business. In addition, from 2010 to 2014, Lincoln deposited fraudulent refunds into bank accounts under his control. While two of these accounts were in Lincoln’s name, one bank account was held in the name of a third party, who was deceased, and one was in the name of a company registered under the deceased person’s name, with the deceased person as the signatory.

Twyman pleaded guilty to theft of government money and aggravated identity theft on July 3, 2019, for her role in the refund scheme. She is scheduled to be sentenced at a later date.

Lincoln is scheduled to be sentenced at a later date and faces a statutory minimum of two years in prison for aggravated identity theft, a maximum sentence of five years for conspiracy, and a maximum sentence of 10 years for theft of public money. Lincoln also faces a period of supervised release, restitution, forfeiture and monetary penalties. 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 Acting U.S. Attorney Jonathan Lenzner for the District of Maryland made the announcement.

IRS-Criminal Investigations and the Treasury Department’s Office of the Inspector General investigated the case.

Trial Attorney Abigail Burger Chingos of the Tax Division and Assistant U.S. Attorney Jessica C. Collins of the District of Maryland are prosecuting the case.

Today, as we commemorate the 31st anniversary of the Americans with Disabilities Act (ADA), the U.S. Department of Justice (DOJ) and the U.S. Department of Health and Human Services (HHS) are jointly publishing guidance on how “long COVID” can be a disability under the ADA, Section 504 of the Rehabilitation Act and Section 1557 of the Affordable Care Act. The guidance is on the DOJ website at https://www.ada.gov/long_covid_joint_guidance.pdf - PDF and on the HHS website at https://www.hhs.gov/civil-rights/for-providers/civil-rights-covid19/index.html.

Some people continue to experience symptoms that can last weeks or months after first developing COVID-19. This can happen to anyone who has had COVID-19, even if the initial illness was mild. People with this condition are sometimes called “long-haulers” — and the condition they have is known as “long COVID.”

With the rise of long COVID as a persistent and significant health issue, the DOJ Civil Rights Division and the HHS Office for Civil Rights (OCR) have joined together to provide this new guidance.  This guidance explains that long COVID can be a disability under the ADA, Section 504 of the Rehabilitation Act of 1973, and Section 1557 of the Affordable Care Act, and explains how these laws may apply. Each of these federal laws protects people with disabilities from discrimination. This guidance also provides resources for additional information and best practices.

“The ADA is one of our most transformative civil rights laws, helping to ensure that our schools, courthouses, townhalls, businesses and workplaces are open to all people, regardless of their disability status,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This anniversary, we recognize the ongoing challenges to full equality, including COVID-19’s devastating and disproportionate impact on people with disabilities.  As many of our neighbors find themselves with long-lasting effects from COVID-19, we are committed to making sure that people understand their rights under federal nondiscrimination laws. The Department of Justice will vigorously enforce the ADA and other federal civil rights laws to ensure that as the nation responds to, and recovers from, COVID-19, and that those with disabilities are full and equal partners in that recovery.” 

“Some individuals recover quickly from COVID, but others experience debilitating long-term impairments that substantially limit major life activities,” said Acting Director Robinsue Frohboese of HHS’s Office of Civil Rights. “Today’s guidance makes clear that these individuals are entitled to equal opportunities and full participation in all aspects of life. We honor the 31st anniversary of the ADA, a law that established ‘a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities,’ and deepen our commitment to enforcing federal civil rights laws. OCR is committed to advancing the principles of non-discrimination and equity and will continue to provide guidance so that consumers understand their rights and providers fulfill their obligations.” 

“It’s critical that we ensure people who have disabilities as a result of long COVID are aware of their rights under federal nondiscrimination laws,” said Acting Administrator and Assistant Secretary Alison Barkoff for Aging at the Administration for Community Living at HHS. “It also is crucial that they know how to connect to services and supports available if they now need assistance to live in their own homes, go to school or work, or participate in their communities.” 

This guidance, along with a directory of resources available through programs funded by the Administration for Community Living (ACL), was shared this morning by the White House as part of a comprehensive package of resources for people with long COVID, which you can find here: https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/26/fact-sheet-biden-harris-administration-marks-anniversary-of-americans-with-disabilities-act-and-announces-resources-to-support-individuals-with-long-covid/.

The ACL directory of resources for those with long COVID may be found at:  https://acl.gov/sites/default/files/COVID19/ACL_LongCOVID.pdf - PDF.

This guidance is one of many actions HHS has taken in recent months to address long COVID. In February HHS launched a new initiative to study long COVID. Led by NIH, the goal of the initiative is to learn more about how COVID-19 may lead to widespread and lasting symptoms, and to develop ways to treat or prevent these symptoms. In addition to the initiative, HHS, through the COVID-19 Health Equity Task Force and OCR, held listening sessions on long COVID with health advocates, and NIH held a workshop with experts to identify key gaps in knowledge about the condition.

Additional Resources

DOJ’s Civil Rights Division has a page on its ADA.gov website that discusses topics related to COVID-19 and the ADA:  https://www.ada.gov/emerg_prep.html.

OCR has a webpage devoted to COVID-19 and civil rights issues: https://www.hhs.gov/civil-rights/for-providers/civil-rights-covid19/index.html.

The Centers for Disease Control and Prevention’s (CDC) website has a page on post-COVID conditions, which discusses long COVID:  https://www.cdc.gov/coronavirus/2019-ncov/long-term-effects.html.

Other ACL resources and information about COVID-19 for people with disabilities can be found at: https://acl.gov/COVID-19.

ACL and OCR partnered to create a website that tells the story of how the ADA came to be, showcase some of the progress we have made as a country toward achieving its promise and illustrate a little bit of the work being done by ACL and OCR, as well as other partners within HHS and across government. That website can be found at: https://acl.gov/ada.

If you believe that you or another person has been discriminated against by an entity covered by the ADA, you may file a complaint with the Disability Rights Section (DRS) in the Department of Justice.  Information about how to file a complaint is available at: https://www.ada.gov/fact_on_complaint.htm.

If you believe that you or another person has been discriminated against by an entity covered by federal civil rights laws, you may file a complaint with OCR.  Information about how to file a complaint is available at: https://www.hhs.gov/ocr/complaints.

Attorney General Merrick B. Garland today released the following statement on Aon plc’s and Willis Towers Watson’s announcement that the firms agreed to terminate their planned $30 billion merger. The Department of Justice filed a civil antitrust lawsuit on June 16, 2021, to stop the merger, alleging that the combination of Aon and Willis Towers Watson, the second- and third-largest insurance brokers in the world, would reduce competition for the business of American companies, effectively consolidating the industry’s “Big Three” into a Big Two.

“This is a victory for competition and for American businesses, and ultimately, for their customers, employees and retirees across the country,” said Attorney General Merrick B. Garland. “American employees and retirees rely on dependable health care and retirement plans provided by their employers. Many of those employers, in turn, rely on insurance brokers like Aon and Willis Towers Watson for managing the complexities of these health and retirement benefits. Businesses also rely on Aon and Willis Towers Watson to compete for the bulk of their risk management portfolio, including property and casualty insurance. The decision to abandon this anticompetitive merger will help preserve competition in insurance brokering.

“The department is grateful for the team of dedicated lawyers, economists, paralegals and support staff who thoroughly investigated the merger and pursued litigation to block this combination for the benefit of American consumers.”

Today, Attorney General Merrick B. Garland and Assistant Attorney General for the Civil Rights Division Kristen Clarke issued the following statements to mark the 31st Anniversary of the Americans with Disabilities Act (ADA), the nation’s preeminent civil rights law that provides equal opportunity for people with disabilities.

“Thirty-one years ago today, the Americans with Disabilities Act was signed into law with broad bipartisan support and it has been life-changing for people with disabilities,” said Attorney General Merrick B. Garland. “It ushered in a new era of greater participation, inclusion, independent living and opportunity. The ADA has helped knock down discriminatory barriers in employment, state and local government programs, and businesses. That has made it possible for generations of Americans with disabilities to contribute to their communities and achieve their full potential. The Justice Department will keep working tirelessly — marshalling all tools made possible by this groundbreaking law — to realize the ADA’s promise of equal opportunity for all people with disabilities.”

“The ADA is one of our most transformative civil rights laws, helping to ensure that our schools, courthouses, townhalls, businesses and workplaces are open to all people, regardless of their disability status,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We know that much work remains to be done to achieve fully the goals underlying the ADA, but the department celebrates the progress that the ADA has made possible for millions of Americans, while continuing to fight for full access and opportunity for people with disabilities. This is the Civil Rights Division’s charge and this is our promise to every person with a disability across this country. We will not yield until the full measure of rights guaranteed by the ADA is a reality for all.”

This year, the Civil Rights Division has enforced the ADA to provide concrete changes in the lives of Americans with disabilities.  The following are some examples of its work:

• The department recently secured a comprehensive settlement agreement with Amtrak that will provide equal access to rail travel for countless passengers with disabilities. Over the next 10 years, Amtrak will design at least 135 stations to be accessible, complete construction at 90 of those stations, and have at least 45 more under construction. Amtrak is also installing Passenger Information Display Systems to provide both audio and visual messages at 97 stations, which will benefit riders with vision or hearing disabilities. Amtrak also established a $2.25 million settlement fund to compensate people who were harmed by inaccessible stations while trying to travel by train.
• The department recently entered into a significant settlement agreement with North Dakota, a statewide agreement that will ensure adults with physical disabilities can receive community-based services instead of entering or remaining in nursing facilities. Under the agreement, more than 2,500 people with disabilities will receive services that will help them remain with their families and communities, while still receiving the care that they need.
• The department entered into a settlement agreement with Newton County, Arkansas and the Newton County Board of Elections to address polling place accessibility for people with disabilities. As part of its investigation, the department surveyed the county courthouse used for early voting and all 18 of the polling places used during the election. The County’s polling places contained architectural barriers and lacked  functioning, accessible voting machines. The department’s agreement requires the County and the Board to provide accessible polling places. Through the department’s ADA Voting Initiative, we have surveyed over 2,400 polling places and increased polling place accessibility in over 50 jurisdictions.
• The department’s recent settlement agreements with the City of Killeen and Central Texas College of Killeen are removing physical barriers to accessibility. For example, the college is working to make parking, entrances, restrooms, service counters, drinking fountains and routes to and within buildings accessible to people with disabilities. It is also providing the required wheelchair and companion seating in assembly areas, such as auditoriums. The city is taking similar steps to make buildings accessible, including its City Hall, police stations, libraries, community centers and emergency shelters. The city is also improving communication services for individuals with hearing disabilities, enhancing website accessibility and implementing a plan for sidewalk accessibility.

For more information about the ADA, please visit www.ada.gov or call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383). For more information on the Civil Rights Division, please visit www.justice.gov/crt.

The Attorney General’s video marking the 31st Anniversary can be found here.

A Texas resident pleaded guilty Thursday to filing a false individual income tax return.

According to court documents, between January 2009 and December 2014, Charles D. Holley, aka Charlei Diwan Holley, owned and operated a data brokerage business. As part of this business, Holley purchased data information from state motor vehicle agencies, which she re-sold to various buyers. Holley set up bank accounts in which to deposit the proceeds of her business activity, including an offshore bank account in Nicosia, Cyprus. In February 2012, Holley filed a false individual tax return with the IRS that did not disclose that she was engaged in or receiving income from her data brokerage business. In total, Holley caused a tax loss to the IRS of $202,196.

Holley is scheduled to be sentenced on Oct. 20. She faces a possible maximum penalty of three years in prison, as well as 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.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Jennifer Lowery for the Southern District of Texas made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Robert Kemins and Ignacio Perez De La Cruz of the Tax Division are prosecuting the case.

A North Carolina return preparer was sentenced today to 15 months in prison for conspiring to defraud the IRS.

According to court documents and statements made in court, from 2012 through 2016, Audrey Renetta Odom, of Durham, conspired with Karen Jones and Andrea Pasley to prepare false returns for clients. The returns fraudulently lowered the clients’ tax liabilities or inflated their refunds by claiming false education credits or dependents or by manipulating the clients’ income to qualify for larger earned income tax credits. Odom admitted that some clients were charged up to $2,000 for preparing returns. Based on an analysis of the falsely claimed education credits, the tax loss is over $1.2 million.

Jones pleaded guilty to conspiracy to defraud the IRS on Nov. 5, 2020, and was sentenced to 22 months in prison for her role in the conspiracy. Pasley pleaded guilty to conspiracy to defraud the IRS on May 6 and is scheduled to be sentenced on Oct. 29.

In addition to the term of imprisonment, U.S. District Judge William L. Osteen Jr. ordered Odom to serve three years of supervised release and to pay approximately $1,239,847 in restitution to the United States.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina made the announcement.

IRS-Criminal Investigation investigated the case.

Assistant Chief Todd Ellinwood and Trial Attorney Kavitha Bondada of the Tax Division prosecuted the case.

A federal jury convicted a New Jersey man today of conspiring with individuals in Georgia, North Carolina, Virginia and New York in a “mortgage recovery” tax fraud scheme and for assisting in the filing of false returns, among other tax offenses.

According to court documents and evidence presented at trial, from March 2015 through 2016, John Barry Jr., of Pemberton, and his co-conspirators falsely represented to clients that they could extinguish their outstanding mortgage debts by obtaining tax refunds. To carry out the scheme, Barry and his co-conspirators filed forms with the IRS that fraudulently claimed that financial institutions had withheld and paid over to the IRS substantial taxes on behalf of Barry’s clients, even though no such payments had occurred. Barry then directed clients to file false tax returns that claimed significant refunds based upon the bogus tax withholdings. These false withholding claims caused the IRS to issue more than $3 million in refunds to clients. Barry typically charged each client a fee of between 20 and 35 percent of the refund the client obtained, and then split fees with some co-conspirators.

In addition to his participation in the “mortgage recovery scheme,” Barry did not file his own 2016 return despite earning income in excess of filing threshold, nor did Barry report or pay taxes on the income generated from the scheme in that tax year.

Barry is scheduled to be sentenced on December 1 and faces a maximum penalty of five years’ imprisonment for conspiracy to defraud the IRS, three years’ imprisonment for each count of aiding and assisting the filing of false tax returns, three years’ imprisonment for obstructing the internal revenue laws, and one year of imprisonment for failing to file a tax return. 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 made the announcement.

IRS-Criminal Investigations investigated the case.

Trial Attorneys Sean M. Green and Samuel B. Bean of the Justice Department’s Tax Division are prosecuting the case.

The Justice Department today announced that Dallas towing company United Tows LLC has agreed to enter into a consent order to resolve allegations that it illegally sold five servicemember-owned vehicles, in violation of the Servicemembers Civil Relief Act (SCRA).  

The SCRA is a federal law that provides a variety of financial and housing protections to members of the U.S. military. The law prohibits a towing company from selling a vehicle owned by a servicemember unless it first obtains a court order allowing it to do so.                                                               

The department filed a lawsuit against United Tows on Sept. 28, 2020, alleging that the company auctioned a car belonging to a man who was attending U.S. Air Force basic training in San Antonio, Texas. The complaint alleges that when the servicemember learned that his vehicle had been towed, he contacted United Tows and told them that he was out of town on active duty. According to the complaint, the owner of United Tows responded by telling the servicemember that she did not believe that he was in the military. United Tows sold the vehicle at auction without a court order while the servicemember was still completing his training requirements.

A subsequent investigation by the department revealed that United Tows had illegally sold at least four other vehicles owned by active duty servicemembers between Oct. 4, 2014, and April 26, 2019.

Under the proposed settlement, which is subject to approval by the U.S. District Court for the Northern District of Texas, United Tows must adopt new policies and implement new training requirements. United Tows will also be required to pay a total of $50,000: $20,000 in compensation to the originally identified servicemember; a $20,000 fund to be shared by the four additional servicemembers; and a $10,000 civil penalty to the U.S. Treasury.

“United Tows not only disregarded the legal rights of servicemembers, it made hurtful and dismissive comments about a member’s military service,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The members of our armed forces selflessly devote themselves to the defense of our nation and are deserving of our respect and utmost consideration. The Department of Justice remains committed to the vigorous enforcement of the SCRA and all other laws that protect our servicemembers.”

“United Tows violated a victim’s rights while he was selflessly serving his country,” said Acting U.S. Attorney Prerak Shah for the Northern District of Texas. “We were appalled to learn that this Airman came home from basic training to find his car sold at auction. The men and women of our armed forces represent the best among us, and we are proud to enforce the SCRA and other laws designed to protect them.”

Servicemembers and their dependents who believe their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations can be found at http://legalassistance.law.af.mil/.

The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. Since 2011, the department has obtained over $474 million in monetary relief for over 120,000 servicemembers through its enforcement of the SCRA. Additional information on department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov.

Interface Rehab (Interface), headquartered and operating in California, has agreed to pay $2 million to resolve allegations that it violated the False Claims Act by causing the submission of claims to Medicare for rehabilitation therapy services that were not reasonable or necessary.

The settlement resolves allegations that, from Jan. 1, 2006, through Oct. 10, 2014, Interface knowingly submitted or caused the submission of false claims for medically unreasonable and unnecessary “Ultra High” levels of rehabilitation therapy for Medicare Part A residents at 11 Skilled Nursing Facilities. These facilities include Colonial Care Center, Covina Rehabilitation Center, Crenshaw Nursing Home, Green Acres Lodge, Imperial Care Center, Laurel Convalescent Hospital, Live Oak Rehabilitation Center, Longwood Manor Convalescent Hospital, Monterey Care Center, San Gabriel Convalescent Center, and Whittier Pacific Care Center. In July 2020, the Department of Justice announced that Longwood Management Corporation and 27 affiliated skilled nursing facilities agreed to pay $16.7 million to the United States to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for rehabilitation therapy services that were not reasonable or necessary. The settlement announced today resolves Interface’s role in that alleged conduct.

During the relevant time period, Medicare reimbursed skilled nursing facilities at a daily rate that reflected the skilled therapy and nursing needs of qualifying patients. The greater the patient’s needs, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities was for “Ultra High” therapy patients, who required a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational or speech therapy), one of which had to be provided five days a week.

The United States contends that Interface pressured therapists to increase the amount of therapy provided to patients in order to meet pre-planned targets for Medicare revenue. These alleged targets could only be achieved by billing for a high percentage of patients at the “Ultra High” level without regard to patients’ individualized needs. 

“This settlement reflects our continuing efforts to protect patients and taxpayers by ensuring that the care provided to beneficiaries of government-funded health care programs is dictated by clinical needs, not a provider’s fiscal interests,” said Acting Assistant Attorney General Brian M. Boynton for the Department of Justice’s Civil Division. “Rehabilitation therapy companies provide important services to our vulnerable elderly population, but they will be held to account if they provide therapy services based on maximizing revenue rather than the interests of their patients.”

“The claims that patients required ultra-high levels of care appear to be driven solely by a desire to send ultra-high bills to Medicare,” said Acting U.S. Attorney Tracy L. Wilkison for the Central District of California. “This case is further proof that the government will vigorously pursue those who attempt to cheat the taxpayer-funded system that pays for medical care for millions of Americans, sometimes with the help of whistleblowers who shine a light on fraud.”

“Our agency will continue to aggressively investigate health care providers that attempt to boost their profits by falsely billing  federal health care programs for medically unnecessary services,” said Special Agent in Charge Timothy B. DeFrancesca of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).  “We will not tolerate such fraud schemes, which undermine medical decision-making and the public's trust in the health profession.”

“This multimillion-dollar settlement agreement signifies an important conclusion to the government’s investigation into Interface Rehab’s dubious business practices that tainted the integrity of federal healthcare programs, including the Department of Defense's TRICARE program, by unnecessarily inflating costs,” said Paul K. Sternal, Deputy Director of the Defense Criminal Investigative Service (DCIS).  “DCIS is committed to working with its law enforcement partners to protect the healthcare interests of our military service members, their families and American taxpayers.”

This civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Keith Pennetti, a former Director of Rehab at Interface. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. Mr. Pennetti will receive $360,000 of the settlement proceeds. The qui tam case is captioned United States ex rel. Pennetti v. Interface Rehab, et al., No. CV-14-4133 (C.D. Cal.). 

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Central District of California, with assistance from the HHS-OIG and DCIS.

The investigation and resolution of this matter illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The matter was investigated by Trial Attorney Amy Likoff and Assistant U.S. Attorney John Lee of the U.S. Attorney’s Office for the Central District of California.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

After a three-day trial, a federal jury convicted former Alabama Department of Corrections (ADOC) shift commander Willie Burks, 42, of failing to stop an officer under his command from assaulting an inmate at ADOC’s Elmore Correctional Facility.

The evidence at trial established that when Burks watched calmly as his subordinate, Sergeant Ulysses Oliver, took a handcuffed and compliant inmate out of an observation room, threw him onto the ground, and then punched, kicked, and beat him with a baton. Rather than intervene, as Burks had been trained to do, Burks stood silent until the end of the beating, at which time he commented, “That’s fair.” When Oliver turned himself in for using excessive force, triggering an investigation, Burks instructed Oliver to write in his report that Burks had told him to stop, even though that was not true, in order to cover up his failure to intervene.

“The Constitution requires officers to take reasonable steps to stop excessive force when they know of it and have the power to stop it,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Defendant Burks defied the Constitution, and ignored his oath as a law enforcement officer, when he casually watched a handcuffed and defenseless inmate in his custody being assaulted by an officer under his command. We stand ready to hold officers who commit federal civil rights violations inside of jails and prisons accountable for their misconduct.”

“Correctional officers have an incredibly difficult and important job,” said Acting U.S. Attorney Sandra J. Stewart for the Middle District of Alabama. “Although a vast majority of them serve with honor, cases like this damage public trust and make the job they do more difficult. When officers abandon their oath to protect and serve, and turn a blind eye to criminal conduct, they must be held accountable. This office is committed to prosecute anyone who violates the law.”

“When a law enforcement officer accepts his or her oath of office, they also accept the higher standard they must adhere to,” said FBI Special Agent in Charge James Jewell of the FBI’s Mobile Division. “The abuse of prisoners should not, and will not, be tolerated by the men and women of the FBI and their work in this case was exemplary. The cooperation of the multiple agencies involved in this case, and most specifically the Alabama Department of Corrections, is a testament to their dedication to the administration of justice.”

“We condemn in the strongest possible terms Burks’ behavior and blatant violation of his sworn oath to serve,” said Chief Law Enforcement Officer Arnaldo Mercado for the Alabama Department of Corrections’ Law Enforcement Services Division. “We extend our thanks to the DOJ for its assistance in bringing forth justice in this case.”

Burks is the fourth correctional officer to be convicted in federal court in connection with this assault. Former ADOC Sergeant Ulysses Oliver previously pleaded guilty for assaulting the inmate, and former Corrections Officers Briana Mosley and Leon Williams, who were also present during the assault, previously pleaded guilty for failing to intervene.

Burks will be sentenced in November. He faces a statutory maximum sentence of 10 years in prison. 

This case was investigated by the FBI’s Mobile Division and ADOC’s Law Enforcement Services Division. It was prosecuted by Assistant U.S. Attorney Eric Counts of the Middle District of Alabama, and Trial Attorneys Katherine DeVar and David Reese of the Justice Department’s Civil Rights Division.

Separately, the Department of Justice is prosecuting a civil case against Alabama and ADOC that alleges a pattern or practice of excessive force by ADOC security staff in violation of the United States Constitution. See United States v. Alabama, No. 2:20-cv-01971-RDP (N.D. Ala.).   

A Tennessee man pleaded guilty today to fixing the prices of DVDs and Blu-ray Discs sold on Amazon Marketplace. 

According to court documents filed in Knoxville, David Camp was charged with conspiring with others to fix prices of DVDs and Blu-ray Discs sold through Amazon Marketplace. The price-fixing conspiracy was ongoing from at least as early as May 2018 until at least Oct. 29, 2019. Camp is the first individual to be charged and the first individual to plead guilty in the ongoing investigation. 

“American consumers deserve the benefits of competitive pricing, whether they’re shopping in brick-and-mortar stores or in an online marketplace,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “By their actions, the defendant and his co-conspirators denied purchasers of DVDs and Blu-ray Discs free and open competition, and instead lined their own pockets. The division remains dedicated to safeguarding online sales from collusion, especially as online shopping becomes increasingly ubiquitous.”

According to the one-count information, Camp and his co-conspirators agreed to raise and maintain the prices of DVDs and Blu-rays sold in their Amazon Marketplace stores. Amazon Marketplace is an e-commerce platform that enables third-party vendors to sell new or used products alongside Amazon’s own offerings. Amazon Marketplace is owned and operated by Amazon.com Inc.

“Honest, competitive pricing of goods allows consumers to purchase products at fair market value, which provides an overall benefit to the individual customer and the market as a whole,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “Partnering with competitors to fix prices of goods at higher-than-necessary rates removes this protection for consumers — it’s also illegal, whether it happens on an online platform or in a face-to-face transaction. Today’s guilty plea should remind other like-minded individuals that they will eventually have to answer for this type of behavior.”  

“Activities related to collusion, bid rigging and market allocation do not promote an environment conducive to open competition, which harms the consumer,” said Acting Executive Special Agent in Charge Steven Stuller of the U.S. Postal Service (USPS) Office of Inspector General. “Along with the Department of Justice and our federal law enforcement partners, the USPS Office of Inspector General will aggressively investigate those who would engage in this type of harmful conduct.”

A criminal violation of the Sherman Act carries a maximum sentence of 10 years in prison and a $1 million criminal fine 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 of those amounts is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. 

The Antitrust Division’s Chicago Office is prosecuting the case, which was investigated with the assistance of the FBI’s New York Field Office and the USPS Office of Inspector General’s Great Lakes Regional Investigations Office in Chicago. 

Anyone with information concerning price fixing or other anticompetitive conduct related to the sale of DVDs, Blu-rays or products sold through Amazon Marketplace should contact the Antitrust Division’s Chicago Office at 312-984-7200, the Citizen Complaint Center at 888-647-3258, www.justice.gov/atr/contact/newcase.html, or the FBI’s New York Field Office at  212-384-1000.

A New York ambulance service business owner pleaded guilty on July 20 to failure to pay employment taxes.

According to court documents and admissions made in court, Steven J. Kwestel, of Lawrence, owned and operated Courtesy Transportation Inc. (Courtesy Transportation), a Brooklyn business that provided ambulance services. As the person who exercised control over Courtesy Transportation’s financial and business operations, Kwestel had a duty to truthfully account for and pay over to the IRS payroll taxes owed by its employees. From 2013 through 2019, Kwestel withheld employment taxes from his employees’ paychecks but did not pay over to the IRS $1,302,841 in taxes owed. Rather than paying the taxes due to the IRS, Kwestel used corporate funds to make hundreds of thousands of dollars of expenditures for his and his family’s personal benefit.

Kwestel is scheduled to be sentenced on Oct. 20 and faces a maximum penalty of five years in prison. He also faces a period of supervised release, restitution and monetary penalties. As part of his plea agreement, Kwestel has agreed to pay back over $1.2 million. 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 made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorneys Shawn Noud and Anahi Cortada of the Tax Division are prosecuting the case.

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

A federal grand jury in New York filed an indictment today charging nine defendants with acting and conspiring to act in the United States as illegal agents of the People’s Republic of China (PRC) without prior notification to the Attorney General, and engaging and conspiring to engage in interstate and international stalking. Two of the nine defendants are also charged with obstruction of justice and conspiracy to obstruct justice.

According to court documents, Tu Lan, 50, and Zhai Yongqiang, 46, both of China, are the latest two of nine charged in the superseding indictment. Co-defendants Hu Ji, 46 and Li Minjun, 65, both of China; Zhu Feng, 34, a Chinese national residing in Queens, New York; Michael McMahon, 53, of Mahwah, New Jersey; Zheng Congying, 24, of Brooklyn, New York; and Zhu Yong, aka Jason Zhu, 64, of Norwich, Connecticut, were previously charged in a related criminal complaint issued in October 2020 and a related indictment in May 2021. The name of the ninth defendant remains under seal.

According to court documents, the defendants allegedly acted at the direction and under the control of PRC government officials, conducted surveillance of and engaged in a campaign to harass, stalk and coerce certain residents of the United States to return to the PRC as part of a global, concerted and extralegal repatriation effort known as “Operation Fox Hunt.” The superseding indictment also alleges that Tu Lan, a new defendant who was employed as a prosecutor with the Hanyang People’s Procuratorate, traveled to the United States, directed the harassment campaign and ordered a co-conspirator to destroy evidence to obstruct the criminal investigation.

“Law enforcement officials around the world act according to a professional code of conduct,” said Acting Attorney General Mark Lesko for the Justice Department’s National Security Division. “They act to enforce the law, not to violate it in such an egregious manner. That aprosecutor and police officer not only directed and participated in a criminal scheme on U.S. soil, but then attempted to cover it up, is an affront to justice of the highest order.”

“As alleged, the defendants, acting as agents of the PRC, carried out an illegal and clandestine campaign to harass and threaten targeted U.S. residents in order to force them to return to the PRC,” said Acting U.S. Attorney Jacquelyn M. Kasulis. “Unregistered, roving agents of a foreign power are not permitted to engage in secret surveillance of U.S. residents on American soil, and their illegal conduct will be met with the full force of U.S. law. To the extent the PRC seeks to repatriate its citizens to the PRC, its agents are required to register with the Attorney General of the United States, coordinate with U.S. officials, and adhere to U.S. laws and protocols.”

"As noted in the superseding indictment, the Chinese government sent operatives to America to harass, surveil, and coerce U.S. residents to return to China. These acts are undemocratic, authoritarian, and contrary to the rule of law," said Assistant Director Alan E. Kohler, for the FBI’s Counterintelligence Division. “The FBI will continue to protect those who are victims of harassment and intimidation by the government of China, or any other government practicing these tactics.”

As alleged, in and around 2012 and 2014, the PRC government caused the International Criminal Police Organization, aka Interpol, an inter-governmental law enforcement organization, to issue “Red Notices” for John Doe #1 and his wife, Jane Doe #1. According to the Red Notices, John Doe #1 was wanted by the PRC government for “embezzlement, abuse of power [and] acceptance of bribes” which carried a maximum possible penalty of death under PRC law. Jane Doe #1 was wanted by the PRC government for “accepting bribes” which carried a maximum possible penalty of life imprisonment under PRC law.

As alleged, the nine defendants participated in an international campaign to threaten, harass, surveil and intimidate John Doe #1 and his family, in order to force John Doe #1 and Jane Doe #1 to return to the PRC as part of “Operation Fox Hunt,” a PRC Ministry of Public Security initiative to locate and repatriate alleged Chinese “fugitives” who had fled to foreign countries, including the United States. Instead of operating with the approval and coordination of the U.S. government, PRC government officials carrying out Operation Fox Hunt traveled to the United States and directed non-official operatives in the United States to engage in violations of U.S. criminal law. Specifically, between approximately 2016 and 2019, PRC government officials, including defendant Tu Lan, the PRC prosecutor, and Hu Ji, a PRC police officer with the Wuhan Public Security Bureau, traveled to the United States and directed other defendants to engage in unsanctioned and illegal conduct on behalf of the PRC to coerce the targeted victims to return to the PRC.

As further alleged in the superseding indictment, a centerpiece of this criminal scheme was an April 2017 effort, directed by PRC officials Tu Lan and Hu Ji, to transport John Doe #1’s elderly father from the PRC to the United States to convey a threat to John Doe #1 that his family in the PRC would be harmed if he did not return to the PRC. At the direction of Tu Lan, Hu Ji and others, several defendants worked to investigate, surveil and locate John Doe #1 and his wife. Tu Lan then traveled to the United States along with John Doe #1’s father and a medical doctor, Li Minjun. While in the United States, Tu Lan directed several conspirators to surveil John Doe #1 and his family so the defendants would know where to bring John Doe #1’s father to deliver the demand that John Doe #1 return to the PRC. Afterwards, Tu Lan returned to the PRC, where she continued to supervise the operation with Hu Ji and other PRC officials, directed other U.S.-based conspirators to continue stalking John Doe #1 and then ordered the return of John Doe #1’s father to the PRC after their attempts to render John Doe #1 and Jane Doe #1 were unsuccessful.

Zhu Feng, Hu Ji and Zhu Yong worked with McMahon, a private investigator, to gather intelligence about and locate John Doe #1 and Jane Doe #1. To evade detection and frustrate a criminal investigation of their conduct, Tu Lan allegedly directed one of the conspirators to “delete all the chat content” between the conspirators. Subsequently, between 2017 and 2019 other defendants continued to harass and stalk the victims at the direction of the PRC government. 

For example, on or about Sept. 4, 2018, two defendants drove to the New Jersey residence of John Doe #1 and Jane Doe #1 and pounded on the front door.  The two defendants attempted to force open the door to the residence, then left a note at the residence that stated “If you are willing to go back to the mainland and spend 10 years in prison, your wife and children will be all right. That’s the end of this matter!”

All defendants are charged with acting as and conspiring to act as agents of the PRC, which carry maximum penalties of ten years and five years in prison respectively. The defendants are also charged with interstate stalking and conspiring to engage in interstate stalking, which carry a maximum penalty of five years in prison for each charge. Defendants Tu and Zhu are separately charged with obstruction of justice and conspiracy to obstruct justice, which carry a maximum penalty of 20 years in prison for each charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant U.S. Attorneys Craig R. Heeren, J. Matthew Haggans and Ellen H. Sise are prosecuting the case, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

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 today announced that Toledo, Ohio, landlords Anthony Hubbard, Ann Hubbard, Jeffery Hubbard, PayUp LLC and No Joke Properties Inc. have agreed to pay $100,000 to resolve a Fair Housing Act lawsuit alleging that Anthony Hubbard sexually harassed female tenants at rental properties he owned or managed with the other defendants. 

“People deserve to be safe in their homes and sexual harassment in housing deprives them of that right,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will not tolerate landlords who abuse their power by sexually harassing their tenants, and we will continue to vigorously enforce the Fair Housing Act against landlords who engage in this conduct.”

“Exploiting any person’s basic housing needs as a way to sexually harass, demean and control them violates the law,” said Acting U.S. Attorney Bridget M. Brennan for the Northern District of Ohio. “We remain committed to rooting out homeowners and landlords who target vulnerable residents seeking safe and affordable housing opportunities for them and their families.

The settlement, which must still be approved by the U.S. District Court for the Northern District of Ohio, requires that defendants pay a total of $90,000 to three female tenants who were harmed by Hubbard’s harassment and a $10,000 civil penalty to the United States. The settlement also:

• prohibits Anthony Hubbard from continuing to manage rental housing;
• requires Anthony Hubbard to retain an independent property manager to manage any rental properties he owns now or in the future; and
• requires defendants to receive fair housing training and implement comprehensive non-discrimination policies and complaint procedures to prevent sexual harassment at their properties in the future.

The United States’ lawsuit, filed in October 2019, alleged that Anthony Hubbard  engaged in unwelcome sexual harassment at properties he managed, including making unwelcome sexual advances and comments to female tenants; sending them unwanted sexual text messages, videos and photos; offering to reduce or excuse their monthly rental payments, security deposits and utility fees in exchange for sex acts; and entering the homes of female tenants without their consent and without prior notice. The United States also alleged that Anthony Hubbard carried out some of this sexual harassment while managing properties on behalf of the other defendants — Ann Hubbard, Jeffery Hubbard, PayUp LLC and No Joke Properties Inc. — making them liable for the harassment he carried out while acting as their agent.

This case was jointly litigated by attorneys in the Civil Rights Division and the Civil Division of the U.S. Attorney’s Office for the Northern District of Ohio. The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The goal of the department’s 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 in October 2017, the Department of Justice has filed 21 lawsuits alleging sexual harassment in housing and recovered over $2.5 million for victims of such harassment.

The Justice Department’s Civil Rights Division enforces the Fair Housing Act, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt.  Individuals may report sexual harassment or other forms of housing discrimination by calling the Justice Department at 1-800-896-7743, emailing the Justice Department at fairhousing@usdoj.gov or submitting a report online.  Individuals may also report such discrimination by contacting the Department of Housing and Urban Development (HUD) at 1-800-669-9777 or by filing a complaint online. 

The U.S. Department of Justice today launched five cross-jurisdictional strike forces to help reduce gun violence by disrupting illegal firearms trafficking in key regions across the country. Leveraging existing resources, the regional strike forces will better ensure sustained and focused coordination across jurisdictions and help stem the supply of illegally trafficked firearms from source cities, through other communities, and into five key market regions: New York, Chicago, Los Angeles, the San Francisco Bay Area/Sacramento Region and Washington, D.C.

Each strike force region will be led by designated United States Attorneys, who will collaborate with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and with state and local law enforcement partners within their own jurisdiction (where firearms are used in crimes) as well as law enforcement partners in areas where illegally trafficked guns originate. These officials will use the latest data, evidence, and intelligence from crime scenes to identify patterns, leads, and potential suspects in violent gun crimes.

“All too often, guns found at crime scenes come from hundreds or even thousands of miles away. We are redoubling our efforts as ATF works with law enforcement to track the movement of illegal firearms used in violent crimes. These strike forces enable sustained coordination across multiple jurisdictions to help disrupt the worst gun trafficking corridors,” said Attorney General Merrick B. Garland. “The Department of Justice will use all of its tools – enforcement, prevention, intervention, and investment – to help ensure the safety of our communities – the department’s highest priority.”

The strike forces represent one important, concrete step in implementing the Department’s Comprehensive Violent Crime Reduction Strategy, which was announced on May 26, 2021. The comprehensive strategy supports local communities in preventing, investigating, and prosecuting gun violence and other violent crime—and requires U.S. Attorneys’ offices to work with federal, state, local and tribal law enforcement, as well as the communities they serve, to address the most significant drivers of violence in their districts. In guidance to federal agents and prosecutors as part of that comprehensive strategy, the Deputy Attorney General made clear that firearms traffickers providing weapons to violent offenders are an enforcement priority across the country. 

Department of Justice Efforts to Address Violent Crime

Since April 2021, the Department has taken the following steps to reduce and prevent violent crime, especially the gun crime that is often at the core of the problem:

• April 8, 2021 – Attorney General Garland, alongside President Biden, announced four concrete steps for addressing gun violence:  ATF would propose a new rule  within 30 days to help curb the proliferation of so-called ghost guns, ATF would propose a new rule within 60 days on stabilizing braces used to convert pistols into short-barreled rifles, the Department would publish model state extreme risk protection order legislation within 60 days; and ATF would begin preparing a thorough and detailed new public study of firearms trafficking for the first time in 20 years.
• In April 2021, the Office of Justice Programs also made clear when existing grant funds could be used to support Community Violence Intervention (CVI) programs.
• On May 7, 2021, meeting the Attorney General’s announced timeline, ATF issued a notice of proposed rulemaking to update outdated firearms definitions and to help address the proliferation of ghost guns.
• May 26, 2021, the Attorney General announced the Department’s comprehensive strategy to reduce violent crime, including an overall Department Violent Crime Reduction Strategy, the strengthening of Project Safe Neighborhoods (PSN), and a directive to the U.S. Attorneys to work with their local partners in addressing the increase in violence that typically occurs over the summer (with specific support from DOJ law enforcement agencies).
• On June 7, meeting the Attorney General’s announced timeline, ATF issued a notice of proposed rulemaking to clarify that the restrictions imposed by the National Firearms Act apply when stabilizing braces are used to convert pistols into short-barreled rifles.
• On June 8, meeting the Attorney General’s announced timeline, the Department published model state extreme risk protection order legislation.
• On June 22, 2021, the Attorney General announced that the Department would be forming five Firearms Trafficking Strike Forces within 30 days.
• On, June 23, 2021, the Attorney General, alongside President Biden, announced steps that ATF would take to hold rogue gun dealers accountable for their actions. They include applying a “no tolerance” policy for federal firearms licensers (FFLs) that willfully commit violations that endanger public safety; designating  points of contact for state and local government officials to report concerns about rogue FFLs; formalizing the use of public safety factors for inspection prioritization; sharing inspection information with states that regulate firearms dealers themselves; resuming the practice of notifying revoked dealers on how to dispose of their inventory and the potential criminal consequences of continuing to engage in the business; increasing ATF’s resources for inspections (see, FY 2022 Budget request); and publicly posting disaggregated inspection information to ATF’s website.

A federal grand jury has charged a self-identified “incel” with attempting to conduct a mass shooting of women and with illegally possessing a machine gun.

Tres Genco, 21, of Hillsboro, Ohio, allegedly plotted to commit a hate crime, namely, a plan to shoot students in sororities at a university in Ohio. He was arrested by federal agents today.

Genco identified as an “incel” or “involuntary celibate.” The incel movement is an online community of predominantly men who harbor anger towards women. Incels seek to commit violence in support of their belief that women unjustly deny them sexual or romantic attention to which they believe they are entitled.   

According to the indictment, Genco maintained profiles on a popular incel website from at least July 2019 through mid-March 2020. Genco was a frequent poster on the site.

In one post, Genco allegedly detailed spraying “some foids and couples” with orange juice in a water gun. “Foids” is an incel term short for “femoids,” referring to women. According to the charging document, Genco compared his “extremely empowering action” to similar conduct by known incel, Elliot Rodger. In May 2014, Rodger killed six people and injured 14 others, including shooting individuals outside a University of California, Santa Barbara sorority house. Prior to his mass attack, Rodger shot a group of college students with orange juice from a water gun.

Genco also allegedly wrote a manifesto, stating he would “slaughter” women “out of hatred, jealousy and revenge…” and referring to death as the “great equalizer.” As part of this investigation, law enforcement agents discovered a note of Genco’s that indicated he hoped to “aim big” for a kill count of 3,000 people and intended to attend military training. Searches of Genco’s electronics revealed that the day he wrote his manifesto, he searched online for sororities and a university in Ohio.

It is alleged that in 2019, Genco purchased tactical gloves, a bulletproof vest, a hoodie bearing the word “revenge,” cargo pants, a bowie knife, a skull facemask, two Glock 17 magazines, a 9mm Glock 17 clip and a holster clip concealed carry for a Glock.

Genco attended Army Basic Training at Ft. Benning, Georgia, from August through December 2019.

In January 2020, Genco allegedly wrote a document entitled “Isolated” that he described as “the writings of the deluded and homicidal.” Genco signed the document, “Your hopeful friend and murderer.”

The charging document claims Genco conducted surveillance at an Ohio university on Jan. 15, 2020. That same day, he allegedly searched online for topics including “how to plan a shooting crime” and “when does preparing for a crime become attempt?”

On March 12, 2020, local police officers responded to Genco’s residence in Highland County. At the residence, in the trunk of Genco’s vehicle, police officers found, among other things, firearm with a bump stock attached, several loaded magazines, body armor and boxes of ammunition.  Inside the residence, police officers found a Glock-style 9mm semiautomatic pistol, with no manufacturer’s marks or serial number, hidden in a heating vent in Genco’s bedroom. 

Genco is charged with one count of attempting to commit a hate crime which, because it involved an attempt to kill, is punishable by up to life in prison and one count of illegally possessing a machine gun which is punishable by up to 10 years.

Vipal J. Patel, Acting U.S. Attorney for the Southern District of Ohio; Chris Hoffman, Special Agent in Charge, Federal Bureau of Investigation (FBI) Cincinnati Division; and Roland Herndon, Special Agent in Charge, U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), announced the charges. Assistant U.S. Attorney Megan Gaffney Painter and Assistant Deputy Criminal Chief Timothy S. Mangan are representing the United States in this case.

An indictment is merely an allegation, and defendants are presumed innocent unless proven guilty in a court of law.

The Department of Justice, together with the Federal Trade Commission (FTC), today announced that KuuHuub Inc., a Canadian corporation, and two Finnish corporations, Kuu Huub Oy and Recolor Oy, have agreed to a settlement to resolve alleged violations of the FTC Act and the Children’s Online Privacy Protection Act of 1998 (COPPA) associated with the companies’ “Recolor” mobile app and digital coloring book.

In a complaint filed in the U.S. District Court for the District of Columbia, the United States alleged that the Recolor app included a “kids” category targeted at children, and that defendants also obtained actual knowledge that children 13 years old and younger were using and accessing the Recolor app not only to color images but also to use the app as a social media platform for communicating. The complaint further alleges that the Recolor app collected personal information of these child users without attempting to obtain verifiable parental consent, thus violating COPPA.

As reflected in the stipulated order entered by the court today, the defendants have agreed to a civil penalty of $3 million, with a payment of $100,000 due within a specified timeframe and the remainder suspended pending compliance with the order’s other provisions and based on ability-to-pay considerations. The order also prohibits the defendants from engaging in the challenged practices going forward and requires them to notify customers about the alleged violations; to delete children’s personal information currently in their possession; to seek the deletion of information held by third-party ad networks; to allow refunds requested by any current subscribers who were underage at sign-up; and to meet recordkeeping, certification and compliance obligations. 

This matter was handled by Assistant Director Lisa K. Hsiao and Trial Attorney Marcus P. Smith of the Civil Division’s Consumer Protection Branch. Kerry O’Brien and Evan Rose represented the FTC.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.

A former civilian employee of the U.S. Army’s Directorate of Public Works pleaded guilty today for his role in a kickbacks scheme to steer government contracts for work at Camp Arifjan, a U.S. Army base in Kuwait.

According to court documents, Ephraim Garcia, 64, admitted that he conspired with Gandhiraj Sankaralingam, aka Gandhi Raj, the former general manager and co-owner of Kuwait-based contracting company Gulf Link Venture Co. W.L.L. (Gulf Link), to steer government contracts to Gulf Link. In his position with the U.S. Army, Garcia was involved in the solicitation, award and management of certain government contracts related to facilities support at Camp Arifjan.

In 2015, at an Olive Garden restaurant located in Mahboula, Kuwait, Garcia and Sankaralingam approached an employee of the prime contractor responsible for base support services. During that meeting, they offered to pay the prime-contractor employee in exchange for his assistance in steering subcontracts worth over $3 million to Gulf Link. Rather than agree to the scheme, the prime-contractor employee reported the kickback offer to authorities. Garcia was arrested in the Philippines in December 2019. On Aug. 19, 2020, Sankaralingam was charged in a superseding indictment with conspiracy to offer a kickback and with paying illegal gratuities to Garcia. Sankaralingam remains a fugitive.

Garcia pleaded guilty to one count of conspiracy to offer a kickback and one count of offering a kickback. He is scheduled to be sentenced on Oct. 22, and faces a maximum of five years in prison on the conspiracy charge and 10 years in prison on the kickback charge. 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; Director Marion F. Robey of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command; and Assistant Inspector General for Investigations Paul Sternal of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), made the announcement.

The U.S. Army Criminal Investigation Command and DCIS are investigating the case.

Trial Attorneys Christopher Jackson and Matthew Sullivan of the Criminal Division’s Fraud Section are prosecuting the case.

The charges in the indictment against Sankaralingam are merely allegations, and he is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

DES MOINES, Iowa -- On Wednesday, July 21, 2021, federal search warrants were executed at the following locations in the Des Moines metropolitan area:

• 1100 block of 24th Street, Des Moines
• 1300 block of 13th Place, Des Moines
• 800 block of Loomis Avenue, Des Moines
• 1200 block of East 32nd Street, Des Moines
• 6300 block of Hickman Road, Des Moines
• 1300 block of Clark Street, Des Moines
• 5100 block of Ingersoll Avenue, Des Moines
• 1700 block of Logan Avenue, Des Moines
• 400 block of Aurora Avenue, Des Moines
• 2200 block of 32nd Street, Des Moines
• 1800 block of 2nd Avenue, Des Moines
• 300 block of East Grand Avenue, Des Moines
• 800 block of East County Line Road, Des Moines

The searches at these locations were an official law enforcement action involving officers, agents, and investigators from Mid-Iowa Narcotics Enforcement Task Force; Central Iowa Gang Task Force; Des Moines Police Department; Iowa Division of Narcotics Enforcement; Polk County Sheriff’s Office; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Iowa State Patrol; Iowa Division of Intelligence and Fusion Center; Iowa State Patrol SWAT; United States Marshals Service; Central Iowa Drug Task Force; Drug Enforcement Agency; Mid-Iowa Narcotics Enforcement Task Force East; Homeland Security Investigations; Altoona Police Department; Story County Sheriff’s Office; Ames Police Department; Norwalk Police Department; West Des Moines Police Department; Ankeny Police Department; METRO Star; SERT; Iowa 5th Judicial District; Federal Bureau of Investigation Chicago; Federal Bureau of Investigation Kansas City; Federal Bureau of Investigation Minneapolis; Federal Bureau of Investigation Omaha.

Two Texas companies have agreed to pay a combined $15.3 million to resolve allegations of kickbacks and other misconduct resulting in the submission of false claims to federal health care programs.

According to the settlement, Alliance Family of Companies LLC (Alliance), a national electroencephalography (EEG) testing company based in Texas, will pay $13.5 million to resolve allegations that it submitted or caused to be submitted false claims to federal health care programs that resulted from kickbacks to referring physicians or that sought payment for work not performed or for which only a lower level of reimbursement was justified. The settlement also resolves allegations against Texas-based private investment company Ancor Holdings LP (Ancor), which will pay over $1.8 million for causing false billings resulting from the kickback scheme through its management agreement with Alliance.

“Kickbacks and inflated billings result in the misuse of critical federal health care program funds,” said Acting Assistant Attorney General Brian M. Boynton of the Department of Justice’s Civil Division. “The Department of Justice will collaborate with our agency partners to protect federal health care programs by pursuing those who knowingly claim public funds to which they are not entitled.”

“This settlement should put health care providers on notice that we will hold accountable those who seek to profit by pursuing kickbacks and other improper billing schemes,” said Acting U.S. Attorney Jennifer B. Lowery for the Southern District of Texas. “This office, in coordination with its law enforcement partners, will use all available resources to pursue those who defraud these federal programs and to protect our nation’s health care system.”

“This settlement is an example of strong federal partnerships working to protect federal health care programs that are relied upon by so many beneficiaries,” said Special Agent in Charge Miranda L. Bennett of the Department of Health and Human Services Office of Inspector General (HHS-OIG), Dallas Region. “We will continue working with our law enforcement partners to investigate kickback schemes that undermine the integrity of the Medicare and Medicaid programs.”

“As the investigative arm of the Department of Defense Inspector General, the Defense Criminal Investigative Service is dedicated to protecting the integrity of Department of Defense programs such as TRICARE, the health care system for our service members, retirees, and their families,” said Acting Special Agent in Charge Gregory P. Shilling of the Defense Criminal Investigative Service (DCIS) Southwest Field Office. “Today’s settlement highlights the teamwork with our federal and state partners in rooting out fraud to protect our critical program and preserve American taxpayer resources.” 

“This settlement demonstrates our commitment to safeguarding the Federal health care programs from fraud,” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General of the U.S. Office of Personnel Management Office of Inspector General (OPM-OIG). “I would like to thank our staff, law enforcement partners and the Department of Justice for their efforts to protect the Federal Employees Health Benefits Program from those who would seek to defraud the program through improper and illegal billing practices.”

Alliance provides ambulatory EEG testing services for patients referred by physicians and other health care providers to diagnose certain neurological conditions. The United States alleged that Alliance induced physicians to order the company’s EEG testing by providing kickbacks in the form of free EEG test-interpretation reports, thereby enabling primary care physicians who were not neurologists to bill the government as if they had interpreted the tests. The government also alleged that Alliance used an inaccurate billing code for certain EEG testing to generate higher reimbursements and billed for a specialized digital analysis that it did not actually perform. The United States alleged that Ancor learned of the kickbacks based on due diligence it performed prior to investing in Alliance and then caused false claims by allowing that conduct to continue once it entered into an agreement to manage Alliance.

Under the terms of the settlement, Alliance will pay $13,022,356 and Ancor will pay $1,780,349 to the federal government to resolve their liability under the False Claims Act. In addition, Alliance will pay $477,643 and Ancor will pay $64,369 to state Medicaid programs. Alliance is obligated to pay additional amounts if certain financial contingencies occur within the next five years and forego any claim to over $390,000 in suspended payments that it would otherwise be owed by Medicare. 

In connection with the settlement, Alliance entered into a five-year Corporate Integrity Agreement with HHS-OIG, setting forth requirements for future compliance.

The settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act in six actions. Under the Act’s qui tam provisions, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government reaches a monetary agreement with the defendant. The qui tam actions subject to the settlement are all pending in the Southern District of Texas and are captioned United States ex rel. Mandalapu, et al. v. Alliance Family of Companies, Inc., et al., No. 4:17-cv-00740; United States ex rel. Fuller v. Respiratory Sleep Solutions, et al., No. 4:17-cv-01197; United States ex rel. Calcanis v. Alliance Family of Companies, Inc., et al., No. 4:19-cv-1497; United States, et al. ex rel. Jane Doe v. Alliance Family of Companies, LLC, et al., No. 4:19-cv-1213; United States, et al. ex rel. McKay v. Alliance Family of Companies, LLC, et al., No. 4:18-cv-1949; and United States, et al. ex rel. Krasnov v. Alliance Family of Companies, LLC, et al., No. 4:19-cv-4886. Relators Mandalapu and Chava will receive $2,962,850 of the federal settlement proceeds as their share of the government’s recovery, plus a share of any additional recoveries should the financial contingencies occur. 

The resolutions obtained in this matter were the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Southern District of Texas, with assistance from the U.S. Attorney’s Office for the Middle District of Florida; HHS-OIG; FBI; DCIS; OPM-OIG; and the state attorneys general and Medicaid Fraud Control Units.   

Trial Attorneys Michael Hoffman and Sarah Loucks of the Civil Division’s Commercial Litigation Branch (Fraud Section), and Assistant U.S. Attorney Kenneth Shaitelman of the Southern District of Texas are handling this case. 

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The claims resolved by the settlement are allegations only, and there has been no determination of liability.  

The U.S. Department of Justice today formally updated its guidelines governing communications between the Justice Department and the White House. Attorney General Merrick B. Garland announced the guidelines, effective immediately, in a memorandum to all Department personnel. 

“The success of the Department of Justice depends upon the trust of the American people,” wrote Attorney General Garland. “That trust must be earned every day. And we can do so only through our adherence to the longstanding Departmental norms of independence from inappropriate influences, the principled exercise of discretion, and the treatment of like cases alike.”

The policy expands upon procedural safeguards designed to protect the Department’s criminal and civil law enforcement decisions, and legal judgments, from the appearance or reality of partisan or other inappropriate influences. 

A Pennsylvania man pleaded guilty today in the Western District of Pennsylvania for trafficking in endangered and invasive fish in violation of the Lacey Act.

Anthony Nguyen, aka JoJo Nguyen and Jackie Lee, 49, of Pittsburgh, entered guilty pleas before U.S. District Judge Nora B. Fischer to counts one and two of the indictment returned against him on Nov. 13, 2020, alleging that he trafficked in endangered Asian arowana and invasive snakehead fish. Nguyen owned and operated a Pittsburgh business, Ichiban Tropical Fish, specializing in the sale of rare and exotic freshwater tropical fish species.

During his plea hearing, Nguyen admitted to violating the Lacey Act in 2016 when he sold illegally imported Asian arowana, which are native to Southeast Asia and are protected under the U.S. Endangered Species Act (ESA). Arowana, also known as “dragon fish” or “Asian bonytongue fish,” are considered the most expensive freshwater fish on earth, with highly sought-after specimens selling for tens of thousands of dollars. Arowana are also listed in Appendix I of the Convention on International Trade in Endangered Species of Flora and Fauna (CITES), which is reserved for the most endangered species of fish and wildlife.

Nguyen also admitted to violating the Lacey Act for selling invasive and injurious snakehead fish in 2019, in violation of Pennsylvania law. Snakeheads are native to Asia, but have been introduced into freshwater habitats in the U.S.  Pursuant to the terms of Nguyen’s plea agreement, he will also accept responsibility for falsifying documents related to the snakehead shipment.

Nyugen is scheduled to be sentenced on Nov. 1 and faces a maximum penalty of five years in prison and a $250,000 fine for each charge.

The investigation was conducted by the U.S. Fish and Wildlife Service, Office of Law Enforcement. The Pennsylvania Fish and Boat Commission, California Department of Fish and Wildlife, and Texas Parks and Wildlife Department also provided assistance during the investigation. The case is being prosecuted by Trial Attorney Patrick M. Duggan of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney Eric G. Olshan.

The Justice Department today announced that it reached an agreement with Los Angeles towing company Black and White Towing Inc. to resolve allegations that it illegally auctioned off an active-duty U.S. Marine’s car, in violation of the Servicemembers Civil Relief Act (SCRA).  

The SCRA is a federal law that provides a variety of financial and housing protections to members of the U.S. military. The law prohibits a towing company from auctioning off a vehicle owned by a servicemember unless it first obtains an order from a court allowing it to do so.                                                             

The department’s lawsuit, which was filed today along with the settlement, alleges that Black and White illegally auctioned a U.S. Marine’s 2014 Honda Accord while the Marine was stationed at Camp Pendleton in San Diego County, California. The Marine’s car was struck by another vehicle while it was legally parked and unoccupied. Black and White towed the car to its lot in Pacoima, California. When the Marine learned that her vehicle had been towed, she contacted Black and White and told them that she was in the military and would be working with the other driver’s insurance company to retrieve the vehicle. The complaint also alleges that the Marine’s car contained her military uniform and several military awards and certificates, and Department of Motor Vehicle records indicated that she had obtained her vehicle loan through Navy Federal Credit Union.  Before the insurance company could arrange to inspect or retrieve the vehicle, Black and White sold it at auction, without a court order. As a result, the Marine lost the use and ownership of the car, but still had to continue making her monthly car loan payments to Navy Federal.

Under the proposed settlement, which is subject to approval by the U.S. District Court for the Central District of California, Black and White must pay $22,000 in compensation to the Marine and a $5,000 civil penalty to the U.S. Treasury. Black and White will also be required to adopt new policies and implement new training requirements.

“When towing companies ignore their legal obligations under the Servicemembers Civil Relief Act, it can have serious financial consequences for servicemembers and their families,” said Assistant Attorney General Kristen Clarke of the Civil Rights Division. “We hope this settlement encourages all towing companies to review and improve their policies and ensure that the rights of all servicemembers are honored and respected.”

Servicemembers and their dependents who believe their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program Office.  Office locations can be found at http://legalassistance.law.af.mil/.

The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. Since 2011, the department has obtained over $474 million in monetary relief for over 120,000 servicemembers through its enforcement of the SCRA.  Additional information on the department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov.

PORTLAND, Maine: A Hollis man was sentenced today in federal court for possessing fentanyl with intent to distribute and possessing a firearm in furtherance of drug trafficking, Acting U.S. Attorney Donald E. Clark announced.

U.S. District Judge D. Brock Hornby sentenced Dustin Homewood, 23, to six years in prison and three years of supervised release. Homewood entered a guilty plea on February 2, 2021.

According to court records, on May 31, 2020, the Rumford Police Department responded to a report of a male under the influence of drugs at a gas station. Officers found Homewood unconscious behind the wheel of a car. Once Homewood was alert, officers discovered a set of brass knuckles and a loaded firearm in his pocket. An ensuing search of his vehicle resulted in the seizure of another firearm and more than 300 grams of fentanyl.

The Rumford Police Department and the FBI’s Safe Streets Task Force investigated the case with assistance from the Maine State Police.

Eric Todd Ellis, 32, a former Bureau of Prisons (BOP) corrections officer at the FCI-Aliceville facility in Aliceville, Alabama, pleaded guilty today in federal court to one count of sexual abuse of a ward and one count of tampering with a witness.

According to court documents, on or about June 11, 2020, Ellis knowingly engaged in a sexual act with a female inmate while in the back of the laundry room of the prison. At the time, Ellis was on-duty and acting in his capacity as a corrections officer. The female inmate was in official detention and under Ellis’s custodial authority. Ellis subsequently admitted his conduct to another corrections officer.

Thereafter, the U.S. Department of Justice Office of the Inspector General (OIG) began investigating Ellis’s conduct. While that investigation was ongoing, Ellis made the following statements – on a recorded call – to that corrections officer (to whom he had previously admitted his conduct) in reference to the federal investigation and his conduct: “Just tell [the OIG agents], yeah, we’re friends, but, I mean, you hadn’t really talked to me about it. And when you have it’s – I’ve just told you that nothing happened.” Ellis admitted in the plea agreement that he made those statements because was attempting to persuade that other corrections officer to provide false information to OIG agents about his sexual abuse of the female inmate.

“Inmates detained inside jails and prisons have the right to be free from sexual assaults and sexually abusive behavior,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Department of Justice will continue to hold accountable prison employees who exploit their positions of power to sexually abuse individuals in their custody, and then attempt to cover up their misconduct. Corrections officers who commit sexual assault have no place inside the Bureau of Prisons, and we will continue to fight for justice for victims of these despicable crimes.” 

“The Department of Justice strives to maintain a safe, secure and supportive environment for prison inmates, and one that promotes the successful reentry of inmates into society,” said U.S. Attorney Prim F. Escalona. “My office works closely with the OIG and the Civil Rights Division to investigate and prosecute any sexual abuse of inmates by prison employees.”

“Ellis sexually abused an inmate in his custody and then tried to coerce another correctional officer to help him cover up his crime,” said Special Agent in Charge James F. Boyersmith of the Justice Department’s Office of the Inspector General Miami Field Office. “The DOJ Office of the Inspector General will continue to investigate and bring to justice anyone who engages in this kind of behavior.” 

A sentencing hearing is scheduled for Oct. 26.

This case was investigated by the Atlanta Division of the OIG. Executive Assistant U.S. Attorney Robert Posey and Assistant U.S. Attorney Robin Mark of the Northern District of Alabama and Special Litigation Counsel Fara Gold and Trial Attorney Anna Gotfryd of the Criminal Section of the Civil Rights Division of the U.S. Department of Justice are prosecuting the case.

The U.S. Department of Justice today formally adopted a new policy that restricts the use of compulsory process to obtain information from, or records of, members of the news media acting within the scope of newsgathering activities. Attorney General Merrick B. Garland announced the new policy, effective immediately, in a memo to Department leadership.

The Attorney General also reiterated his support for the durability of these policy changes. To further protect members of the news media in a manner that will be enduring, he asked the Deputy Attorney General to undertake a review process to further explain, develop, and codify the policy announced today into Department regulations. He also reaffirmed the Department’s support for congressional legislation to protect members of the news media.

Attorney General Merrick B. Garland issued the following statement today commemorating the life of Congressman John Lewis:

“One year ago today, the nation lost Congressman John Lewis. Throughout his life, Congressman Lewis fought fearlessly to ensure people’s freedom, equality, and other basic human rights. Nowhere was his impact greater than on strengthening the foundation of our democracy – the right to vote.

“Congressman Lewis often spoke about getting into ‘good trouble, necessary trouble,’ and his ‘trouble’ got results. In 1965, he and other civil rights leaders were attacked by state troopers as they peacefully marched across the Edmund Pettus Bridge in Selma, Alabama. Their act of protest paved the way for the passage of the Voting Rights Act, and an exponential increase in Black voter registration.

“In 2013, the Supreme Court’s Shelby County decision effectively eliminated the preclearance protections of the Voting Rights Act, which had proved to be one of the nation’s most effective tools for safeguarding voting rights. During the half-century it was in effect, the Justice Department relied on the preclearance provision to object to more than one thousand discriminatory voting changes. Since 2013, there has been a dramatic rise across the country in legislative efforts that make it harder for millions of citizens to vote. This increase accelerated after the 2020 elections.

“The recent further narrowing of voting protections only underscores the need for legislative action. The Department of Justice is using all the tools at its disposal to protect the voting rights of all citizens, but that is not enough. We need Congress to pass the John Lewis Voting Rights Advancement Act, which would provide the Department with important tools to protect the right to vote and to ensure that every vote is counted. There is no more fitting way to honor the profound legacy of Congressman Lewis.”

A Richmond, Virginia, tax return preparer was sentenced yesterday to one year and a day in prison for evading her own taxes.

According to court documents and statements made in court, Willette J. Holland owned Tax Professionals, a return preparation firm located in Richmond, Virginia. In August 2014, the IRS contacted Holland because she had not filed personal tax returns for the years 2010 through 2013. Holland then presented false returns to an IRS Revenue Agent for those years, which substantially underreported her gross receipts and taxes due. In 2014, 2015 and 2016, Holland again did not file tax returns despite being required to do so by law. To further conceal her earnings from the IRS, in 2014, Holland deposited almost all of her tax preparation business’s gross receipts into a bank account held in the name of a nominee. In all, Holland caused the IRS to suffer a tax loss of approximately $177,000.

In addition to the term of imprisonment U.S. District Judge Robert E. Payne ordered Holland to serve three years of supervised release. 

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

IRS-Criminal Investigation is investigating the case.

Trial Attorney Francine Davis and Assistant Chief Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Kaitlin Cooke for the Eastern District of Virginia are prosecuting the case.

A federal judge convicted two Philadelphia residents at a bench trial of conspiring to defraud the United States and aiding and assisting in the preparation of false tax returns.

According to court documents and evidence presented at trial, between 2010 and 2013, Yolonda Thompson, also known as Qhama Al, and Albert Upshur, also known as Kelinde Jaha, attempted to obtain millions of dollars for themselves and other participants in a fraudulent debt-relief scheme. As part of the scheme, which they named the Debt Payoff Program, Thompson and Upshur formed the Yolonda Denise Thompson Living Trust. Participants in the Debt Payoff Program were told that if they paid money to Upshur and filed tax returns and other documents that Thompson prepared for them, they could access funds from the trust to pay off their mortgages and other debts. In reality, the tax returns that Thompson prepared and that participants filed with the IRS fraudulently claimed income tax refunds that the scheme participants were not entitled to receive. The false tax returns introduced into evidence at trial collectively sought tax refunds of more than $300 million.

The evidence at trial also established that after the IRS began to investigate the Debt Payoff Program, Thompson and Upshur attempted to obtain money from the IRS by other fraudulent means, including using checks drawn on closed bank accounts and fake financial instruments. Even after the IRS assessed civil penalties against Thompson and Upshur, and notified them that they were under criminal investigation, both defendants continued to file false returns and other tax documents for themselves and other.

Thompson and Upshur are scheduled to be sentenced at a later date and face a maximum penalty of five years in prison for the conspiracy count and three years in prison for each false return 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 made the announcement. He thanked the U.S. Attorney’s Office for the Eastern District of Pennsylvania, which provided support in the investigation and prosecution of this case.

IRS Criminal Investigation investigated the case.

Trial Attorneys Melissa S. Siskind and Kathryn D. Sparks of the Justice Department’s Tax Division are prosecuting the case.

Today, the Justice Department announced the unsealing of a nine-count indictment charging Michael Harvel, 59, of Crossville, Tennessee, with civil rights violations for kidnapping and sexually assaulting women that he supervised during his tenure as the Cumberland County, Tennessee, Solid Waste Director. FBI agents arrested Harvel at his home earlier today, and he will appear before a U.S. Magistrate Judge later this afternoon.

According to the indictment, Harvel’s official duties as the former Solid Waste Director included supervising women who served their court-ordered community service time or worked as paid county employees. The indictment alleges that, from 2015 to 2018, Harvel sexually assaulted seven women under his supervision. Two counts charge that Harvel kidnapped and sexually assaulted women he supervised, and a third count charges him with committing aggravated sexual abuse by forcibly raping a woman in a dark office. The indictment alleges several other incidents of sexual assault, including Harvel fondling the breasts and genitals of women against their will.

If convicted, Harvel faces a maximum sentence of up to life in prison.

This case is being investigated by the FBI. Assistant U.S. Attorney Sara Beth Myers for the Middle District of Tennesee and Trial Attorney Michael J. Songer of the Justice Department’s Civil Rights Division are prosecuting the case. 

In March, in a separate civil action, the Department of Justice settled a sexual harassment lawsuit against Cumberland County for $1.1 million. The lawsuit alleged, among other things, that Cumberland County failed to take adequate precautions to prevent Harvel, as the director of the county’s Solid Waste Department, from sexually harassing women he supervised. According to the complaint, Harvel regularly subjected the women to unwanted sexual contact, including kissing and groping; unwelcome sexual advances, including propositioning the women for sexual favors; and offensive sexual remarks about their bodies and sex acts.

An indictment is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.  

The Justice Department, together with the Federal Trade Commission (FTC),  today announced that the government will collect $1.66 million in civil penalties as part of a settlement to resolve alleged violations of the FTC Act and the FTC’s Telemarketing Sales Rule (TSR) by New Jersey-based Environmental Safety International Inc. (ESI), as well as its co-owners, Joseph and Sean Carney, and its telemarketer, Raymond Carney, all of whom reside in New Jersey.

In a complaint filed in the U.S. District Court for the District of New Jersey, the United States alleged that the defendants made millions of unlawful telemarketing calls to consumers in an effort to sell septic tank cleaning products. Among other things, the complaint alleges that the defendants violated the TSR by initiating “robocalls” from a seller without the recipient’s consent. The complaint further alleges that the defendants violated the TSR by making telemarketing calls that failed to disclose the seller’s identity, that were directed to numbers on the National Do-Not-Call Registry, and that were initiated to individuals who previously stated that they did not wish to receive calls from the defendants. Lastly, the company and its co-owners are alleged to have violated the FTC Act by falsely representing they would commence legal action or debt collection activities if customers failed to pay for its septic tank products.

“Americans should be protected from unwanted, deceptive telemarketing calls,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice is working together with the FTC to prevent the scourge of robocalls that harass and invade the privacy of millions of people every day.”

As reflected in the stipulated orders entered by the court today, the defendants have agreed to a civil penalty of $10.2 million, all of which will be suspended except for $1.66 million; to forfeit real property worth $774,000; and to forego $164,402 in unpaid customer balances. The orders also require the defendants to take a number of steps to prevent a recurrence of the alleged unlawful conduct. Among other things, ESI must dissolve and the individual defendants must forego activities in its name. Furthermore, the individual defendants are enjoined from engaging in future telemarketing activities and must meet recordkeeping, certification and compliance obligations. 

This matter was handled by Assistant Director Lisa K. Hsiao and Trial Attorney Zachary L. Cowan of the Civil Division’s Consumer Protection Branch. Amy C. Hocevar, Christian M. Capece, Derek E. Diaz and Fil M. de Banate represented the FTC.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.

Today, as part of the ongoing response, agencies across the U.S. government announced new resources and initiatives to protect American businesses and communities from ransomware attacks. The U.S. Department of Justice (DOJ) and the U.S. Department of Homeland Security (DHS), together with federal partners, have launched a new website to combat the threat of ransomware. StopRansomware.gov establishes a one-stop hub for ransomware resources for individuals, businesses and other organizations. The new StopRansomware.gov is a collaborative effort across the federal government and is the first joint website created to help private and public organizations mitigate their ransomware risk.

“The Department of Justice is committed to protecting Americans from the rise in ransomware attacks that we have seen in recent years,” said Attorney General Merrick B. Garland of the Justice Department. “Along with our partners in and outside of government, and through our Ransomware and Digital Extortion Task Force, the Department is working to bring all our tools to bear against these threats. But we cannot do it alone. It is critical for business leaders across industries to recognize the threat, prioritize efforts to harden their systems and work with law enforcement by reporting these attacks promptly.”

“As ransomware attacks continue to rise around the world, businesses and other organizations must prioritize their cybersecurity,” said Secretary Alejandro Mayorkas for the Department of Homeland Security. “Cyber criminals have targeted critical infrastructure, small businesses, hospitals, police departments, schools and more.  These attacks directly impact Americans’ daily lives and the security of our nation. I urge every organization across our country to use this new resource to learn how to protect themselves from ransomware and reduce their cybersecurity risk.”

StopRansomware.gov is the first central hub consolidating ransomware resources from all federal government agencies. Before today, individuals and organizations had to visit a variety of websites to find guidance, latest alerts, updates and resources, increasing the likelihood of missing important information. StopRansomware.gov reduces the fragmentation of resources, which is especially detrimental for those who have become victims of an attack, by integrating federal ransomware resources into a single platform that includes clear guidance on how to report attacks, and the latest ransomware-related alerts and threats from all participating agencies. StopRansomware.gov includes resources and content from DHS’s Cybersecurity and Infrastructure Security Agency (CISA) and the U.S. Secret Service, the DOJ’s FBI, the Department of Commerce’s National Institute of Standards and Technology (NIST), and the Departments of the Treasury and Health and Human Services.

Ransomware is a long-standing problem and a growing national security threat. Tackling this challenge requires collaboration across every level of government, the private sector and our communities. Roughly $350 million in ransom was paid to malicious cyber actors in 2020, a more than 300% increase from the previous year. Further, there have already been multiple notable ransomware attacks in 2021, and despite making up roughly 75% of all ransomware cases, attacks on small businesses often go unnoticed. Like most cyber attacks, ransomware exploits the weakest link. Many small businesses have yet to adequately protect their networks, and StopRansomware.gov will help these organizations and many more to take simple steps to protect their networks and respond to ransomware incidents, while providing enterprise-level information technology (IT) teams the technical resources to reduce their ransomware risk. 

DHS, DOJ, the White House and our federal partners encourage all individuals and organizations to take the first step in protecting their cybersecurity by visiting StopRansomware.gov.