A FORMER CEO OF KELLOGG, BROWN & ROOT GOES TO PRISON FOR BRIBERY AND KICKBACK SCHEMES

The following excerpt is from the Department of Justice website:

“Thursday, February 23, 2012Former Chairman and CEO of Kellogg, Brown & Root Inc. Sentenced to 30 Months in Prison for Foreign Bribery and Kickback SchemesU.K. Solicitor and Former Salesman Also Sentenced for Participation in Scheme to Bribe Nigerian Government Officials

WASHINGTON – Albert “Jack” Stanley, a former chairman and chief executive officer of Kellogg, Brown & Root Inc. (KBR), was sentenced today to 30 months in prison for conspiring to violate the Foreign Corrupt Practices Act (FCPA) by participating in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts and for conspiring to commit mail and wire fraud as part of a separate kickback scheme, the Justice Department’s Criminal Division today announced.    

U.S. District Judge Keith P. Ellison for the Southern District of Texas also ordered Stanley to serve three years of supervised release following the prison term and to pay $10.8 million in restitution to KBR, the victim of the separate kickback scheme.   Stanley, 69, pleaded guilty on Sept. 3, 2008, to a two-count criminal information charging him with one count of conspiracy to violate the FCPA and one count of conspiracy to commit mail and wire fraud.

Two of Stanley’s co-conspirators also were sentenced by Judge Ellison.   Today, Jeffrey Tesler, 63, a United Kingdom citizen and licensed solicitor, was sentenced to 21 months in prison, followed by two years of supervised release.   Tesler also was ordered to pay a $25,000 fine and previously was ordered to forfeit $148,964,568.   Yesterday, Wojciech J. Chodan, 74, a United Kingdom citizen and former salesman at KBR’s U.K. subsidiary, was sentenced to one year of probation and ordered to pay a $20,000 fine.   Chodan previously was ordered to forfeit $726,885.

Tesler and Chodan were indicted on Feb. 17, 2009, and subsequently extradited to the United States from the United Kingdom.   On Dec. 6, 2011, Chodan pleaded guilty to count one of the indictment charging him with conspiring to violate the FCPA.   On March 11, 2011, Tesler pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA.
         
All three defendants fully cooperated with the department’s investigation, which resulted in more than $1.7 billion in penalties, disgorgement and forfeitures.   The defendants’ substantial assistance in the investigation and prosecution of other defendants was reflected in the sentences the court imposed.

“Today’s prison sentences for Mr. Stanley and Mr. Tesler mark another important step in our prosecution of those responsible for a massive bribery scheme involving engineering, procurement and construction contracts in Nigeria,” said Mythili Raman, Principal Deputy Assistant Attorney General for the Criminal Division.  “These sentences reflect not only the defendants’ illegal acts, but also their substantial cooperation with the government.  As a result of this investigation, three individuals have been convicted of FCPA-related crimes, and five companies in four countries have paid substantial penalties and undertaken significant efforts to enhance their compliance programs.  This case shows the importance the department places on putting an end to foreign bribery.”

According to court documents, KBR was a member of the TSKJ joint venture (named for the first letters of the names of the companies involved), along with Technip S.A., Snamprogetti Netherlands B.V., and JGC Corporation.  Between 1995 and 2004, TSKJ was awarded four EPC contracts, valued at more than $6 billion, by Nigeria Liquefied Natural Gas (LNG) Ltd. to build the LNG facilities on Bonny Island.  The government-owned Nigerian National Petroleum Corporation was the largest shareholder of NLNG, owning 49 percent of the company.

From approximately 1994 through June 2004, the joint venture companies, Stanley, Tesler, Chodan and others agreed to pay bribes to a wide range of Nigerian government officials in order to obtain and retain the EPC contracts.   To pay the bribes, the joint venture hired two agents – Tesler and Marubeni Corporation, a Japanese trading company headquartered in Tokyo.   The joint venture hired Tesler as a consultant to pay bribes to high-level Nigerian government officials, including top-level executive branch officials, and hired Marubeni to pay bribes to lower-level Nigerian government officials.  At crucial junctures preceding the award of the EPC contracts, Stanley and other co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom TSKJ should negotiate bribes to Nigerian government officials.  TSKJ paid approximately $132 million to a Gibraltar corporation controlled by Tesler and $51 million to Marubeni during the course of the bribery scheme for use, in part, to pay bribes to Nigerian government officials.

In a related criminal case, KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to FCPA-related charges for its participation in the scheme to bribe Nigerian government officials.  Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program.

In another related criminal case, the department filed a deferred prosecution agreement and criminal information against Technip in June 2010.  According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years.   In July 2010, the department filed a deferred prosecution agreement and criminal information against Snamprogetti, which also agreed to pay a $240 million criminal penalty.  In April 2011, the department filed a deferred prosecution agreement and criminal information against JGC, in which JGC agreed to pay a $218.8 million criminal penalty and to retain an independent compliance consultant for two years.   In January 2012, the department filed a deferred prosecution agreement and criminal information against Marubeni, in which Marubeni agreed to pay a $54.6 million criminal penalty and to retain a corporate compliance consultant for two years
         
The criminal cases were prosecuted by Assistant Chief William J. Stuckwisch and Deputy Chief Patrick F. Stokes of the Criminal Division’s Fraud Section, with investigative assistance from the FBI-Houston Division.  The Criminal Division’s Office of International Affairs and the SEC’s Division of Enforcement provided substantial assistance.  Significant assistance was provided by authorities in France, Italy, Switzerland and the United Kingdom.   Investigative assistance with the prosecution of Stanley was also provided by the Internal Revenue Service’s Criminal Investigations Division in Houston.”

TWO INVESTORS PLEAD GUILTY TO BID RIGGING AT MUNICIPAL TAX LIEN AUCTIONS

The following excerpt is from the Department of Justice website:

Thursday, February 23, 2012
Two Financial Investors Plead Guilty to Bid Rigging at Municipal Tax Lien Auctions in New Jersey
“WASHINGTON – Two financial investors who purchased municipal tax liens at auctions in New Jersey pleaded guilty today for conspiring to rig bids for the sale of tax liens auctioned by municipalities throughout the state, the Department of Justice announced.

A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, N.J., against Robert W. Stein of Huntington Valley, Pa., and David M. Farber of Cherry Hill, N.J. Under the plea agreements, which are subject to court approval, Stein and Farber have both agreed to cooperate with the department’s ongoing investigation.

According to the felony charge against Stein, from as early as 1998 until approximately spring 2009, Stein participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders on which liens to bid. According to the felony charge against Farber, from as early as the beginning of 2005 through approximately February 2009, Farber also participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey. The department said that both Stein and Farber proceeded to submit bids in accordance with their agreements and purchased tax liens at collusive and non-competitive interest rates.
“Today’s guilty pleas demonstrate that the Antitrust Division will not tolerate those who manipulate the competitive process in order to harm home and property owners,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.

The department said that the primary purpose of the conspiracies was to suppress and restrain competition to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent homeowners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

According to the court documents, Stein conspired with others not to bid against one another at municipal tax lien auctions in New Jersey. Farber also agreed not bid against certain bidders at tax lien auctions. Because the conspiracies permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum.

Today’s pleas are the result of an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. On Aug. 24, 2011, Isadore H. May, Richard J. Pisciotta Jr. and William A. Collins each pleaded guilty to one count of bid rigging in connection with their participation in a conspiracy to allocate liens at New Jersey municipal tax lien auctions.

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

COUPLE PLEAD GUILTY TO USING OFFSHORE BANK TO HIDE INCOME

The following excerpt is from the Department of Justice website:

Wednesday, February 22, 2012
“Tennessee Couple Plead Guilty to Tax Crimes
Angela Palmer and her husband, Warren Palmer, both of Knoxville, Tenn., each pleaded guilty today to two counts of willful failure to file tax returns, the Justice Department and Internal Revenue Service (IRS) announced.

According to documents filed as part of their guilty pleas, during tax year 2005, Angela Palmer earned income as a mortgage broker and in tax years 2005 and 2006, she also earned income teaching music lessons.  Warren Palmer earned income, during tax years 2004 and 2006, doing construction and other jobs. Additionally, during the years in question, the Palmers maintained funds in an offshore bank account in the name of The Liahona LLC, an entity of which they were the sole members and managers.   Due to the income they received during the prosecution years, the Palmers were required to file tax returns, however, they failed to do so.

In accordance with their plea agreements, Angela Palmer has agreed to pay restitution in the amount of $58,646.85, and Warren Palmer has agreed to pay restitution in the amount of $70,887.45, to the IRS.
         
Sentencing is scheduled for June 14, 2012. The Palmers each face a maximum potential sentence of up to one year in jail and a maximum fine of $100,000 for each of the counts to which they pleaded guilty.
         
The cases were investigated by the IRS - Criminal Investigation and prosecuted by Trial Attorney Tracy Gostyla of the Justice Department’s Tax Division."

NATIONWIDE PONZI SCHEMER MAY GET 20 YEARS IN PRISON

The following excerpt is from the SEC website:

February 24, 2012
“SEC v. Gregory N. McKnight, et al.: 08-cv-11887 (E.D. Mich.)
Court Accepts Guilty Plea from Gregory McKnight in $72 Million Ponzi Scheme
The Securities and Exchange Commission announced that on February 16, 2012, the Honorable Mark A. Goldsmith of the United States District Court for the Eastern District of Michigan accepted a guilty plea by Flint-area resident Gregory N. McKnight to one count of wire fraud for his role in orchestrating a $72 million Ponzi scheme involving at least 3,000 investors. For his crimes, McKnight faces a potential maximum penalty of 20 years in federal prison. His sentence will be determined at a future date. The U.S. Attorney’s Office for the Eastern District of Michigan filed criminal charges against McKnight on February 14, 2012.

The criminal charges arose out of the same facts that were the subject of an emergency action that the Commission filed against McKnight and others on May 5, 2008. On that same day, the Court issued orders freezing McKnight’s assets and those of several companies he controlled, and appointed a Receiver. The Commission’s complaint alleged that, from December 2005 through November 2007, McKnight, through his company Legisi Holdings, conducted a fraudulent, unregistered offering of securities in which he raised approximately $72 million from more than 3,000 investors in all 50 states and several foreign countries. According to the Commission's complaint, McKnight represented that he would invest the offering proceeds in various investment vehicles and pay interest of as much as 15 percent per month from the resulting profits. The complaint charged that McKnight invested less than half of the offering proceeds and that these investments resulted in millions of dollars in losses. The Commission's complaint further charged that McKnight used investor funds to make Ponzi payments to investors and for his own use. The Commission’s complaint charged McKnight with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder.

On July 6, 2011, the Court entered a final judgment against McKnight in the Commission’s action, and ordered McKnight to pay disgorgement of ill-gotten gains, prejudgment interest, and civil penalties totaling approximately $6.5 million. The court also issued orders permanently enjoining McKnight from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 hereunder.”

CHECK PHONE BILLS FOR UNAUTHORIZED CHARGES

The following excerpt is from the Department of Justice website:

February 22nd, 2012 Posted by Tracy Russo
The following post appears courtesy of Richard Goldberg, Assistant Director of the Civil Division’s Consumer Protection Branch.

Did you know that your telephone bills may contain charges for products or services other than telephone service, much like charges on a credit card?  Those who carry out these types of fraud have found ways to insinuate themselves onto the telephone billing system, and arrange for false charges to appear on telephone bills.  As a result, you could be paying for goods or services you never ordered or received.

“Cramming” is the practice of placing unauthorized, misleading or deceptive charges on a telephone bill.  The perpetrators tend to keep crammed charges small, to increase the likelihood that you will pay your bill without noticing the false charges.  They do this on both consumer and business telephone bills, on landline and wireless bills.

The Consumer Protection Branch in the Justice Department’s Civil Division is working hard to prosecute these criminals.  But individuals are really the front line in the battle against cramming and in the best position to notice these false charges.  Crammed charges may appear on any page of a telephone bill, so you should carefully review your bill on a monthly basis.

 If you see unfamiliar or suspicious charges on your telephone bill, you should:
 Contact your local telephone company, tell the telephone company of the cramming, and instruct the company to remove the false charge and give a credit for false charges on any previous bills, and
Submit a complaint summarizing the false charges to the Federal Trade Commission.
Many telephone companies will, upon request, exclude third-party billing from a customer’s telephone bill.  Doing so may prevent crammed charges from appearing on telephone bills in the future. "

PHYSICAL ABUSE OF FLORIDA PRISON INMATES LAND CORRECTIONS OFFICER IN PRISON

The following excerpt is from the Department of Justice website:

Wednesday, February 22, 2012
“South Florida Corrections Officer Sentenced on Federal Civil Rights Charge
MIAMI – A corrections officer was sentenced to prison today in federal court for a civil rights charge stemming from prisoner abuse that took place at the South Florida Reception Center (SFRC), a state prison in Doral, Fla., the Justice Department announced.  Florida Department of Corrections (FDOC) officer Guruba Griffin, 32, was sentenced by District Judge Cecilia Altonaga to serve one year in prison, followed by one year of supervised release.

On Dec. 13, 2011, Griffin entered a guilty plea to one count of deprivation of rights under color of law. Griffin’s plea followed a trial in October 2011 where a jury was unable to reach a verdict as to his involvement in a civil rights conspiracy against inmates at SFRC.  Griffin’s co-defendant, Scott Butler, was acquitted by the same jury, while a second jury found Sergeant Alexander McQueen guilty of conspiracy against civil rights and obstruction of justice and convicted Officer Steven Dawkins for obstruction of justice.  McQueen and Dawkins were sentenced to twelve months in prison and one month in prison, respectively, in January of this year.

According to evidence presented at trial, on Feb. 25, 2009, SFRC corrections officers physically abused inmates by choking, punching and striking them with wooden broom handles.  The officers further forced the inmates to fight one another. Additionally, McQueen and Dawkins falsified reports relating to these incidents.

“Abuse of power by corrections officers who violate the civil rights of those in their custody will not be tolerated,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “The Justice Department will continue to vigorously prosecute those who cross the line to engage in acts of criminal violence.”
“When individuals sworn to uphold the law instead abuse their power and infringe upon the civil rights of others, the public’s confidence in our system of justice suffers,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “The U.S. Attorney’s Office remains committed to protecting everyone’s civil rights and promoting confidence in our system.”

“Officer Guruba Griffin violated the civil rights of prisoners under his control at a Florida Department of Corrections facility,” said Special Agent in Charge John V. Gillies of FBI Miami Division.  “His abusive treatment of these prisoners damaged the public’s trust in law enforcement.  The message to corrupt corrections officers is clear; engage in criminal misconduct and the FBI and our partners will bring you to justice.”
This case was investigated by the FBI and the Inspector General’s Office, Florida Department of Corrections, and was prosecuted by Assistant U.S. Attorney Susan Rhee Osborne of the U.S. Attorney’s Office for the Southern District of Florida and Senior Litigation Counsel Gerard Hogan and Trial Attorney Henry Leventis of the Civil Rights Division.”

"OPERATION SPRING THAW" NETS FUGITIVES FOR FEDERAL MARSHALS SERVICE

The following excerpt is from the U.S. Marshals Service website:

"Milwaukee, WI – The United States Marshal for the Eastern District of Wisconsin, Kevin A. Carr, announced the conclusion of Operation Spring Thaw. The operation began on February 1, 2012 and ended today. During the operation, members of the Fugitive Task Force (Milwaukee County Sheriff’s Department, Wisconsin Department of Corrections, Milwaukee Police Department, Milwaukee County District Attorney’s Office, Waukesha County Sheriff’s Department and US Marshals) arrested 38 individuals on outstanding felony warrants. While numerous wanted individuals were taken into custody for a variety of charges, including Sexual Assault of Children, Reckless Endangerment, Firearms Violations, Bail Jumping, Arson, Substantial Battery, Fraud and Probation Violation, the focus was on cold cases (cases where the fugitives had been wanted for several years). Notable arrests during the operation included Michael Mack, wanted since 2009, and had been featured on ‘America’s Most Wanted’ a few weeks ago. Mack was accused of assaulting his girlfriend, and setting her home on fire. Investigators say Mack got into an argument with his girlfriend and she threw him out of the house. He wanted revenge, and allegedly visited her in the hospital for an illness, punched her and soon after, set her place on fire. A tip received as a result of this airing led to Mack’s arrest on February 13, 2012 in San Antonio, Texas. Law enforcement officials say he was working in a carnival and used an alias. Theresa Birkley, wanted since 1997, had been convicted and sentenced to probation in May of 1997 for Battery While Armed. Birkley had stabbed the victim with a knife on the arms, shoulder and face. Birkley subsequently absconded from supervision in August of 1997. Birkley was located and arrested by deputy marshals in Greenville, Mississippi on Tuesday February 21, 2012. Marshal Carr stated that “Operation Spring Thaw was a successful full-court press by the Fugitive Task Force and the Milwaukee County Sheriff’s Department to make an impact in keeping the community safe”.

FORMER WILDLIFE OFFICER CONVICTED OF TRAFFICKING IN WHITE-TAILED DEER

The following excerpt is from the Department of Justice website:

Friday, February 24, 2012
“WASHINGTON – Allan Wright, 45, of Russellville, Ohio, pleaded guilty today in federal court in Cincinnati to violating the Lacey Act by trafficking in and making false records for illegally harvested white-tailed deer, the Department of Justice announced.   Wright committed the Lacey Act crimes while he was employed as a wildlife officer for the Ohio Department of Natural Resources.   Wright’s employment as a wildlife officer was terminated after he was indicted in August 2011.   As part of his plea agreement, Wright has agreed not to appeal his termination.

Among other things, t he Lacey Act makes it a crime for a person to knowingly transport or sell wildlife in interstate commerce when the wildlife was taken or possessed in violation of state law.  The Lacey Act also makes it a crime for a person to knowingly make or submit a false record, account or label for wildlife that has been transported in interstate commerce.   Wright pleaded guilty to a total of four Lacey Act crimes based on his conduct between 2006 and 2010.

As part his plea, Wright admitted that, using his authority as a wildlife officer, he sold a resident Ohio hunting license to a non-resident hunter in 2006.   That hunter used the illegal Ohio resident hunting license to kill three white-tailed deer.   As part of his plea, Wright admitted that he “checked in” those deer by providing a false Ohio residence address for the non-resident hunter in order to make it appear that the deer were killed by an Ohio resident.   After the deer were checked in, the non-resident hunter transported them in interstate commerce from Ohio to South Carolina.

Also as part of his plea, Wright admitted that, using his authority as a wildlife officer, he seized white-tailed deer antlers from a hunter who had killed a deer illegally in 2009.   Wright admitted that, rather than disposing of the antlers through court proceedings, as required by Ohio law, he knowingly supplied them to another individual who transported them from Ohio to Michigan.  As part of his plea, Wright admitted that he filed an official state form, which falsely reported that he had personally destroyed those antlers.

Wright faces a maximum penalty of one year in prison and a $100,000 fine per count.   A date has not yet been set for Wright’s sentencing.

This case was investigated by the U.S. Fish & Wildlife Service, Office of Law Enforcement.   This case was prosecuted by Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section of the Environment and Natural Resources Division.”

$116 MILLION DOLLAR MEDICARE FRAUD AND ASSISTANT HOSPITAL ADMINISTRATOR PLEADS GUILTY

The following excerpt is from the Department of Justice website:

Wednesday, February 22, 2012
“Assistant Administrator of Houston Hospital Pleads Guilty to Participating in $116 Million Medicare Fraud Scheme
WASHINGTON – An assistant administrator of a Houston hospital pleaded guilty today for his role in a $116 million Medicare fraud scheme involving false claims for mental health treatment, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).                                                      

Mohammad Khan, 62, of Houston, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to commit health care fraud, one count of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks, and five counts of paying or offering to pay health care kickbacks.  Khan was arrested on Feb. 8, 2012.   In his plea, Khan admitted that, from January 2008 until the time of his arrest, he caused the submission of $116 million worth of fraudulent claims to Medicare for partial hospitalization program (PHP) services purportedly provided by the hospital.  A PHP is a form of intensive outpatient treatment for severe mental illness.    

“As an assistant administrator at a Houston hospital, Mr. Kahn participated in a $116 million fraud against the government,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.  “For years, he operated a scheme to bill Medicare for partial hospitalization services that were medically unnecessary or never provided.  With our Medicare Fraud Strike Force teams in nine cities, we are holding accountable people across the country who have calculated – incorrectly – that they can get away with trying to bilk the Medicare program.”

According to court documents, Khan was the assistant administrator of Riverside General Hospital and controlled the day-to-day operations of Riverside’s PHPs.  Riverside maintained a valid Medicare provider number that was used to submit claims to Medicare for PHP services that were not medically necessary, and in some cases, never provided.  Many of the beneficiaries for whom Riverside submitted claims to Medicare for PHP services did not have severe mental illness and did not need the treatment provided in a PHP.  In his plea, Khan admitted that he paid and caused the payment of kickbacks to patient recruiters and owners of assisted living facilities and group care homes in exchange for the recruiters and owners sending Medicare beneficiaries to Riverside’s PHPs.  Khan also paid Medicare beneficiaries in the form of cigarettes, food and coupons redeemable for items available at Riverside’s “country stores,” in exchange for those beneficiaries attending Riverside’s PHPs.

In his plea, Khan admitted that he and his co-conspirators submitted approximately $116 million in claims to Medicare for PHP services purportedly provided by the hospital to the recruited beneficiaries, when in fact, the PHP services were medically unnecessary or never provided.

Khan is scheduled to be sentenced on May 25, 2012.  Khan faces a maximum sentence of 10 years in prison for the conspiracy to commit health care fraud count, five years in prison for the conspiracy to defraud the United States count and five years in prison for each health care kickbacks count.

Today’s guilty plea was announced by Assistant Attorney General Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG); the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU); Special Agent in Charge Lucy R. Cruz of the IRS Houston Field Office; Joseph J. Del Favero, Special Agent in Charge of the Chicago Field Office of the Railroad Retirement Board, Office of Inspector General (RRB-OIG); and Scott Rezendes, Special Agent in Charge of Field Operations of the Office of Personnel Management, Office of Inspector General (OPM-OIG).

The case is being prosecuted by Trial Attorney Laura M.K. Cordova, Attorney Allan Medina, Assistant Chief William Pericak and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section.  The case was investigated by the FBI, HHS-OIG, MFCU, IRS, RRB-OIG and OPM-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants who collectively have falsely billed the Medicare program for more than $3.2 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

FLORIDA PHYSICIAN PLEADS GUILTY IN DRUG DIVERSION SCHEME

The following excerpt is from the Department of Justice website:

Tuesday, February 21, 2012
“Florida Physician Pleads Guilty to Conspiracy to Commit Mail and Wire Fraud Sold Prescription Drugs Purchased at Discounted Rates to Seller of Diverted Drugs
Michael Schoenwald of Hollywood, Fla., has pleaded guilty before Judge Herman Weber in Cincinnati to one count of conspiracy to commit mail and wire fraud in connection with a drug diversion scheme in which he was involved, the Justice Department announced.

The government information alleged that Dr. Schoenwald purchased prescription Lupron, an injectable drug used to treat prostate cancer, at discount rates due to his status as a health care provider.   Governing law prohibited Schoenwald from re-selling the drugs, and his agreement with the manufacturer provided that he would not do so.

Nevertheless, Schoenwald sold the Lupron to Gregory Pfizenmayer, who, in turn, sold the drugs to legitimate wholesalers in Ohio and elsewhere.   Pfizenmayer sold the drugs accompanied by documents, required by law, that contained false information about the source of the drugs.   A co-conspirator arranged the transactions between Schoenwald and Pfizenmayer.   Pfizenmayer pleaded guilty to one charge of conspiracy to commit mail and wire fraud in February 2011 and awaits sentencing.

Schoenwald received compensation from Pfizenmayer for the prescription drugs through wire transfers, and in turn paid his co-conspirator a share of the profits.   All told, Schoenwald, Pfizenm ayer and their co-conspirator sold over $1 million dollars worth of prescription drugs through this scheme."

JUDGE FINDS U.K. COMPANY ILLEGALLY TRADED U.S. MUTUAL FUNDS AFTER THE MARKET CLOSE

The following excerpt is from the SEC website:

“On Tuesday, February 14, 2012, United States District Judge Robert W. Sweet of the Southern District of New York issued an Opinion in favor of the U.S. Securities and Exchange Commission finding that United Kingdom-based hedge fund adviser Pentagon Capital Management PLC (PCM) and Lewis Chester, PCM’s Chief Executive Officer, engaged in securities fraud in violation of the Securities Act of 1933 and the Securities Exchange Act of 1934. Specifically, Judge Sweet found that Defendants PCM and Chester orchestrated a scheme to defraud mutual funds in the United States through late trading from February 2001 through September 2003. Late trading refers to the practice of placing orders to buy, redeem, or exchange U.S. mutual fund shares after the time as of which the funds calculate their net asset value (usually as of the close of trading at 4:00 p.m. ET), but receiving the price based on the net asset value already determined as of 4:00 p.m. ET. Judge Sweet found that the Defendants “intentionally, and egregiously violated the federal securities laws through a scheme of late trading” through broker-dealer Trautman Wasserman & Company, Inc. (TW&Co.), and found that the scheme was “broad ranging over the course of several years and in no sense isolated.”

As a result of Defendants’ conduct, the Court found that PCM and Chester violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, and granted the Commission’s request to enjoin PCM and Chester from future violations of those provisions. Judge Sweet further found PCM and Chester, together with Relief Defendant Pentagon Special Purpose Fund, Ltd., PCM’s advisory client, jointly and severally liable for disgorgement of $38,416,500 of profits from the U.S. mutual fund trades executed through TW&Co. plus prejudgment interest. Finally, Judge Sweet imposed civil penalties against Defendants in the amount of $38,416,500, equal to Defendants’ pecuniary gain for late trades through TW&Co.

The Court found in Defendants’ favor regarding charges of deceptive market timing of U.S. mutual funds.

Chester, age 43, is a resident of London, England. PCM is an investment adviser and investment manager based in London, England, and it is registered with the United Kingdom Financial Services Authority. Pentagon Special Purpose Fund, Ltd. is an international business company incorporated in the British Virgin Islands.”

A BOARD CHAIRMAN OF A CORPORATION IS CHARGED WITH INSIDER TRADING

The following excerpt is from the SEC website:

“The Commission announced that on January 31, 2012, an Illinois federal court entered a default judgment against Daniel J. Burns (“Burns”), a defendant in an action filed by the Commission in January 2011. The Commission alleged in its complaint that from 2003 to 2008, Burns, the former Chairman of the Board of Directors of CytoCore, Inc. (“CytoCore”), employed fraudulent schemes to profit from CytoCore stock transactions and received hundreds of thousands of dollars in improper compensation and benefits from CytoCore as an unregistered broker. According to the complaint, in February 2008, Burns caused CytoCore to issue a press release touting Burns’ investment in CytoCore stock, and then secretly sold shares immediately following the announcement. According to the complaint, Burns’ secret selling also constituted insider trading because Burns was in possession of material, nonpublic information about an ongoing CytoCore private stock offering.

The complaint further alleged that, from 2003 to 2008, Burns improperly received transaction-based compensation as an unregistered broker soliciting investors in CytoCore stock. The complaint also alleged that Burns submitted false claims for commissions purportedly earned by a friend for soliciting CytoCore investors, and his friend, in turn, remitted those commission payments to Burns. The Complaint also alleged that Burns submitted to CytoCore false claims for expense reimbursements relating to his investor solicitations. The complaint further alleged that Burns violated insider reporting requirements.

The Court’s final judgment enjoins Burns from future violations of Section 17(a) of the Securities Act of 1933, Sections 10(b), 14(a), 15(a), and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 14a-9, and 16a-3 thereunder, orders him to pay disgorgement in the amount of $804,100.00, plus prejudgment interest of $324,325.00, for a total amount of $1,128,425.00, and permanently bars him from acting as an officer or director of a public company.”

JUDGE SAYS "VICIOUS MURDERER" GETS LIFE FOR RACKETEERING

The following excerpt is from the Department of Justice website:

Thursday, February 16, 2012
“MS-13 Gang Leader in San Francisco Sentenced to Life in PrisonSeventh MS-13 Member to Receive Life Sentence in San Francisco
WASHINGTON –Danilo Velasquez, aka “Triste,” a local leader of La Mara Salvatrucha, or MS-13, was sentenced yesterday in federal court in San Francisco by U.S. District Judge William H. Alsup to life in prison, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag for the Northern District of California and Director John Morton of U.S. Immigration and Customs Enforcement (ICE).  Velasquez was convicted in November 2011 by a federal jury of racketeering-related charges.  At sentencing, Judge Alsup described the defendant as a “vicious murderer.”

Velasquez was part of the violent, transnational gang known as MS-13, which claimed part of the Mission District of San Francisco as its territory and operated in the Bay Area since the 1990s.  Velasquez joined the “20th Street” clique, or local MS-13 chapter, in 2004.   Since its inception, MS-13 members have warred with rival gang members and sought to extort payments from other criminals in its territory.   When the federal government indicted the majority of the 20thStreet clique members on Oct. 22, 2008, Velasquez assumed leadership on the streets.  T he evidence presented at trial showed how Velasquez, with others, conspired to commit a variety of crimes to further the goals of the gang, including attacking and killing rival gang members and others who defied or challenged MS-13.

During Velasquez’s trial, the government presented evidence of multiple murders committed by MS-13 members in 2008.  Several of the victims were not involved in gangs or any illegal activity, including a 14-year-old, but were mistaken to be rival gang members by MS-13 members.

The evidence at trial showed that on Feb. 19, 2009, Velasquez and fellow gang members Luis Herrera, aka “Killer” and Jaime Balam, aka “Tweety,” went looking to kill rival gang members in the San Francisco Bay area.   In the Excelsior District of San Francisco, they spotted a car of young Latino professionals – two were college graduates of UC Berkeley, one a law student at UC Hastings, one a bank employee and another a student at City College in San Francisco who was working his way through school at the time.   According to evidence presented at trial, these victims were targeted because some of the men wore baseball caps in colors associated with rival gang members.   None of the victims were gang members themselves.

Herrera, Velasquez and Balam followed the victims’ car into Daly City, Calif., boxed the car in at a red light, whereupon Velasquez and Balam flanked the victims’ car carrying semi-automatic handguns and began shooting.   By the time they finished firing, they had severely wounded two of the passengers and murdered a third passenger, Moises Frias Jr.   Frias, who was 21-years-old, suffered nine gunshot wounds, including several to the head.   He died en route to the hospital.

Herrera pleaded guilty mid-trial to seven racketeering-related counts, including use of a firearm causing the death of Frias.   As part of his plea, Herrera admitted that he was part of the MS-13 hunting party that followed the victims’ car and murdered Frias.   Herrera was sentenced on Jan. 24, 2012, to 35 years in prison.   Balam remains a fugitive.

Velasquez’s trial was the second of three consecutive federal trials of members of the 20th Street clique of MS-13.   Six of Velasquez’s fellow MS-13 gang members were convicted in August 2011 after a five-month trial that involved more than 150 witnesses.   The six gang members – Marvin Carcamo, aka “Psycho”; Angel Noel Guevara, aka “Peloncito”; Erick Lopez, aka “Spooky”; Moris Flores, aka “Slow Pain”; Jonathan Cruz-Ramirez, aka “Soldado”;   and Luis Herrera’s brother Guillermo Herrera, aka “Sparky” – were each sentenced to life in prison in December 2011.

Today, a federal jury convicted the sole defendant in the third trial, Manuel Franco, aka “Dreamer,” on one count of violent crime in aid of racketeering (VICAR) conspiracy.

These cases were prosecuted by Assistant U.S. Attorneys Wilson Leung, Wil Frentzen, Derek Owens, Andrew Scoble and David Hall of the Organized Crime Strike Force of the U.S. Attorney’s Office for the Northern District of California, and Trial Attorney Theryn G. Gibbons of the Criminal Division’s Organized Crime and Gang Section.   These cases were investigated by Daly City Police Department, San Francisco Police Department and ICE Homeland Security Investigations.”

BOMBER TERRORIST FROM CHRISTMAS 2009 GETS LIFE

The following excerpt is from the Department of Justice website:

Thursday, February 16, 2012
Umar Farouk Abdulmutallab Sentenced to Life in Prison for Attempted Bombing of Flight 253 on Christmas Day 2009
WASHINGTON – Umar Farouk Abdulmutallab, the so-called “underwear bomber,” was sentenced today to life in prison as a result of his guilty plea to all eight counts of a federal indictment charging him for his role in the attempted Christmas Day 2009 bombing of Northwest Airlines flight 253.

The sentence, handed down by U.S. District Court Judge Nancy G. Edmunds in Detroit, was announced by Attorney General Eric Holder; Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan; Andrew G. Arena, Special Agent in Charge of the FBI’s Detroit Field Office; and Brian M. Moskowitz, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Detroit.

Abdulmutallab, 25, of Kaduna, Nigeria, pleaded guilty on Oct. 12, 2011, to conspiracy to commit an act of terrorism transcending national boundaries; attempted murder within the special aircraft jurisdiction of the United States; willfully placing a destructive device on an aircraft, which was likely to have endangered the safety of the aircraft; attempted use of a weapon of mass destruction; willfully attempting to destroy and wreck a civil aircraft; and three counts of possession of a destructive device in furtherance of a crime of violence.

“As this investigation and prosecution have shown, Umar Farouk Abdulmutallab is a remorseless terrorist who believes it is his duty to kill Americans.   For attempting to take the lives of 289 innocent people, he has been appropriately sentenced to serve every day of the rest of his life in prison,” said Attorney General Holder.   “Today’s sentence once again underscores the effectiveness of the criminal justice system in both incapacitating terrorists and gathering valuable intelligence from them.”

“On behalf of the victims, we are gratified that this al-Qaeda terrorist has been defeated and will spend the rest of his life in prison, where he can never hurt innocent civilians again,” U.S. Attorney McQuade said.   “I am very proud of the work of our prosecutors and agents in Detroit. Their work shows that the civilian court system is a valuable mechanism for obtaining intelligence and convicting terrorists with the legal certainty and transparency that instills public confidence in American justice.”

“The case against Abdulmutallab was a combination of the hard work and dedication of FBI personnel as well as multiple federal, state and local agencies.   Those individuals who experienced Christmas Day 2009 first hand should be rest assured that justice has been done.” said FBI Special Agent in Charge Arena.

“When it counted most, under pressure and in the heat of the moment, the metro Detroit law enforcement community responded as one and acted decisively,” said HSI Special Agent in Charge Moskowitz.   “Their collective actions epitomized the concept of ‘one team, one fight’ and showed the power of collaboration in the protection of our homeland.”

According to the indictment filed in this case, in August 2009, Abdulmutallab traveled to Yemen for the purpose of becoming involved in violent “jihad” on behalf of al-Qaeda. There, he conspired with other al-Qaeda members to bomb a U.S. aircraft over U.S. soil and received an explosive device for that purpose.   Abdulmutallab traveled with the bomb concealed in his underwear from Yemen to Africa and then to Amsterdam, the Netherlands, where he boarded Flight 253 on Christmas Day 2009.   The bomb contained PETN and TATP, two high explosives, and was designed to be detonated with a syringe containing other chemicals.

Abdulmutallab’s purpose in taking the bomb on board Flight 253 was to detonate it during flight, causing the plane to crash and killing the 290 passengers and crew members on board.   As Flight 253 was on descent into Detroit Metropolitan Airport, the defendant detonated the bomb, which resulted in a fire, but otherwise did not fully explode.   Passengers and flight attendants tackled the defendant and extinguished the fire.  

This investigation was conducted by the Detroit Joint Terrorism Task Force, which is led by the FBI and includes U.S. Customs and Border Protection, HSI, the Federal Air Marshal Service and other law enforcement agencies.   Additional assistance has been provided by the Transportation Security Administration, the State Department’s Bureau of Diplomatic Security, the Wayne County Airport police, as well as international law enforcement partners.

This case is being prosecuted by Assistant U.S. Attorneys Jonathan Tukel, Cathleen M. Corken and Michael C. Martin of the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.”

NAN GOES TO PRISON FOR SENDING A NOOSE THROUGH THE MAIL

The following excerpt is from the Department of Justice website:

Thursday, February 16, 2012
“Detroit Man Sentenced for Mailing Noose to Threaten Couple
WASHINGTON – Glenn E. Morgan Jr., 41, of Detroit, was sentenced by U.S. District Judge Robert H. Cleland to three months in prison followed by two years supervised release after pleading guilty to sending a threatening communication through the mail to a Detroit couple, the Justice Department announced today.

In November 2008, Morgan mailed a noose, photographs of black men being lynched and a photograph of the murdered body of Nicole Brown Simpson to the couple because of their race.  The envelope Morgan sent to the couple also contained threatening written messages indicating that black men who marry white women should be lynched and that white women who marry black men will share Nicole Brown Simpson's fate.

U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade said, "The law protects people from threats and harassment based on their race, and we will prosecute anyone who seeks to racially intimidate members of our community."

“Threats based on race have no place in our country,” Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.   “The department will aggressively prosecute those who threaten any person based on the color of their skin.”

Andrew Arena, Special Agent in Charge of the FBI in Detroit said, "This sentencing should send as a strong message that hate crimes will be investigated vigorously and those responsible for these heinous acts will be brought to justice."

The case was investigated by the FBI. The case was prosecuted by Assistant U.S. Attorney Pamela Thompson from the U.S. Attorney's Office the Eastern District of Michigan, and Trial Attorney Sanjay Patel from the Civil Rights Division.”

MAN FOUND GUILTY OF VIOLATION THE MIGRATORY BIRD TREATY ACT

The following excerpt is from the Department of Justice website:

 Wednesday, February 15, 2012
 “WASHINGTON – Alexander D. Alvarez of Atmore, Ala., pleaded guilty in federal court today to violating the Lacey Act and the Migratory Bird Treaty Act (MBTA) for illegally selling and possessing the feathers of anhingas and other migratory birds protected under the MBTA, the Department of Justice Environment and Natural Resources Division and the U.S. Attorney’s Office for the Southern District of Alabama announced.  

  Alvarez was charged by criminal information on Feb. 1, 2012, with one felony Lacey Act violation, one felony MBTA violation and one misdemeanor MBTA violation.   The Lacey Act charge carries a maximum penalty of five years in prison and a fine of $250,000.   The felony MBTA charge carries a maximum penalty of two years in prison and a fine of $250,000.   The misdemeanor MBTA charge carries a maximum penalty of six months in prison and a fine of $15,000.   Sentencing is scheduled for May 22, 2012.

Under the MBTA, the Secretary of the Interior maintains a list of migratory birds which are protected from, among other things, being killed, sold, bartered, transported or possessed, except as otherwise permitted by federal regulation.   Enrolled members of federally-recognized American Indian tribes may possess eagle and other migratory bird feathers and parts for religious and ceremonial purposes, but federal law strictly prohibits the sale of migratory birds, feathers or their parts by any person.   Alvarez is not an enrolled member of a federally-recognized American Indian tribe.   The Lacey Act prohibits, among other things, the sale of wildlife knowing that the wildlife was taken or possessed in violation of any federal wildlife-related regulation or law.”       

2 NURSES GO TO PRISON FOR TAKING PART IN $5.2 MILLION MEDICARE FRAUD

The following excerpt is from the Department of Justice website: February 14, 2012 Two Houston-Area Nurses Sentenced to More Than Five Years in Prison for Roles in $5.2 Million Medicare Fraud Scheme WASHINGTON – Two Houston-area nurses and two of their co-conspirators have been sentenced in Houston for their participation in a $5.2 million Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Service (HHS).              Mary Ellis, 56, a registered nurse, was sentenced today to 63 months in prison followed by three years of supervised release and was ordered to pay $401,000 in restitution.  Ellis was convicted of one count of conspiracy to commit health care fraud, one count of conspiracy to pay kickbacks, three counts of receiving illegal kickbacks and two counts of making false statements following a May 2011 trial. Caroline Njoku, 46, also a registered nurse, was sentenced yesterday to 63 months in prison followed by one year of supervised release and was ordered to pay $631,295 in restitution.  Njoku was convicted of one count of conspiracy to commit health care fraud and one count of conspiracy to pay kickbacks following a May 2011 trial.   Terrie Porter, 48, was sentenced yesterday to two years in prison and two years of supervised release and was ordered to pay $482,380 in restitution.  Porter was convicted of one count of conspiracy to receive kickbacks and one count of receiving illegal kickbacks following a May 2011 trial. Florida Holiday Island, 62, was sentenced yesterday to 20 days in prison, five months of home detention and two and a half years of supervised release and was ordered to pay $59,739 in restitution.  Island pleaded guilty in March 2011 to one count of conspiracy to receive kickbacks and one count of receiving illegal kickbacks.  The defendants were sentenced by U.S. District Judge Nancy Atlas in the Southern District of Texas.  The four defendants were ordered to pay restitution jointly and severally with co-conspirators and defendants in a related case.  As part of the sentencing, the court found that Ellis and Porter had obstructed justice by testifying untruthfully at trial. According to the evidence presented at trial and in court documents, Family Healthcare Group, a Houston home health care company, purported to provide skilled nursing to Medicare beneficiaries.  Family Healthcare Group paid Ellis, Porter, Island and other co-conspirators to recruit Medicare beneficiaries for the purpose of filing claims with Medicare for skilled nursing that was medically unnecessary and/or not provided.  According to evidence presented at trial, Njoku and Ellis falsified documents to support the fraudulent payments.  After the Medicare beneficiaries were recruited, other co-conspirators fraudulently signed plans of care stating that the beneficiaries needed home health care when in fact they knew the beneficiaries were not home-bound and not in need of skilled nursing.  Co-defendant Adelma Casas Sevilla, a registered nurse, was previously sentenced to 18 months in prison.  A second co-defendant, Sammie Wilson, received three years of probation after pleading guilty to one count of conspiracy to commit health care fraud.  Four other defendants involved in the scheme are pending sentencing. The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent-In-Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG) and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU). This case is being prosecuted by Trial Attorney Charles D. Reed and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section.  The case was investigated by the FBI, HHS-OIG, Texas OAG-MFCU and the Federal Railroad Retirement Board-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants who collectively have falsely billed the Medicare program for more than $3.2 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

ALLIGATOR GUIDE AND HUNTER PLEADS GUILTY TO VIOLATING THE ENDANGERED SPECIES ACT

The following excerpt is from the Department of Justice website: Friday, February 10, 2012 “WASHINGTON - Gregory K. Dupont, 38, of Plaquemine, La., pleaded guilty today in U.S. District Court in Baton Rouge, La., to one felony count of illegally guiding out-of-state sport hunters to unauthorized areas to hunt American alligators (Alligator mississippiensis) in violation of the Lacey Act, the U.S. Endangered Species Act and Louisiana law, the Justice Department announced.  Sentencing in this case has been scheduled for June 20, 2012.  Dupont was also ordered to surrender custody of his firearms to pre-trial services. Gregory K. Dupont was a licensed alligator hunter, who, in September 2006, guided his clients to an area which was unapproved, that is an area for which he did not have the required Convention on International Trade of Endangered Species (CITES) tags.  During this illegal hunt, Dupont took his clients to a property in Iberville Parish, La., where one of his clients killed an American alligator.  Dupont tagged the alligator illegally with a tag for another property.  He did not have tags permitting them to hunt in that area at all.     In 1967, American alligators were listed as an endangered species because the total population size in the United States reached drastically low numbers due to severe poaching and overharvesting.   This protected status and of the Lacey Act, the Endangered Species Act and regulations promulgated by the U.S. Fish and Wildlife Service and the state of Louisiana led to the recovery of  the American alligator population, and American alligators were down-listed to threatened status in 1987.  The American alligator is currently listed on Appendix II of CITES, which is the only treaty that deals with international trade in protected species.  There are 175 member countries, including the United States.  The success of the American alligator conservation program in the United States is second only to that of the Bald Eagle. Because American alligators remain federally protected, alligator hunting is regulated by federal and state rules and regulations, which require, among other things, the tagging of all harvested alligators.  The integrity of the tagging system is crucial to Louisiana’s alligator management program because it enables the Louisiana Department of Wildlife and Fisheries to monitor harvest areas, alligator size and the number of alligators taken.  This system depends in significant part upon the honesty and self-regulation of Louisiana’s licensed hunters for its continued success.   In Louisiana, an allotted number of alligator hide tags are issued to licensed hunters.  Each tag may be used for one alligator only, and Louisiana law requires alligator hunters to hunt only on property for which hide tags are issued.  The areas where alligator hunting is permitted are determined on a yearly basis by wildlife biologists, whose decisions are based on the need to maintain a healthy alligator population.  If hunters poach alligators from areas for which they do not have tags, then the integrity of the entire alligator management system is undermined, thereby threatening Louisiana’s alligator population and alligator industry, which is a significant component of Louisiana’s economy. The case was prosecuted by Shennie Patel and Susan L. Park of the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice.  The case was investigated by the Louisiana Department of Wildlife and Fisheries and by the U.S. Fish and Wildlife Service Office of Law Enforcement.”

NEW ENGLAND LA COSA NOSTRA LOSES FIVE MEMBERS

The following excerpt is from the Department of Justice website:

Thursday, February 16, 2012
"WASHINGTON – Five Rhode Island men previously identified as leaders or associates of the New England organized crime family of the La Cosa Nostra (NELCN) have agreed to plead guilty to racketeering-related charges, according to documents filed today with the U.S. district court in Providence, R.I.

The announcement was made by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Peter F. Neronha for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.

The defendants were charged in a second superseding indictment returned by a federal grand jury in Providence in September 2011, which alleges their participation in an extortion and racketeering conspiracy involving “protection” payments from several Rhode Island businesses.  The defendants face sentences of up to 20 years in prison and fines of up to $250,000.

According to plea agreements signed by the defendants and filed with the court, Luigi “Baby Shacks” Manocchio; Edward “Eddy” Lato; Alfred “Chippy” Scivola; and Richard Bonafiglia will plead guilty to one count of conspiracy to participate in a racketeering enterprise.  Raymond R. Jenkins will plead guilty to one count of conspiracy to participate in a Hobbs Act extortion.

According to the plea agreements, in addition to admitting to their criminal conduct, Manocchio, Lato and Scivola admit to their membership in the enterprise charged in the second superseding indictment, which is the NELCN.   In addition, in their signed plea agreements, Manocchio and Lato admit to being organizers and leaders of the enterprise’s criminal activity.  As alleged in the indictment, Manocchio was an underboss and boss of the NELCN and Lato was an NELCN capo, primarily responsible for Rhode Island.   Lato also admitted in his plea agreement to related extortion activity charged in the indictment.

Theodore Cardillo and Albino “Albie” Folcarelli, also named in the second superseding indictment and identified as alleged associates of the NELCN, are scheduled for trial on April 23, 2012.
An indictment is merely an allegation and is not evidence of guilt.   A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

An eighth defendant named in a previous superseding indictment in this matter, Thomas Iafrate, of Johnston, R.I., pleaded guilty on July 21, 2011, to one count of conspiracy to participate in a racketeering enterprise.   He also admitted that he was an associate of the NELCN.   Iafrate was sentenced in December 2011 to 30 months in federal prison, to be followed by three years of supervised release.

The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland for the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section.  The matter was investigated by the FBI, Rhode Island State Police, Providence Police and Internal Revenue Service – Criminal Investigation.”

LENDER TO PAY $3.9 MILLION TO RESOLVE FALSE CLAIMS LIABILITY

The following excerpt is from the Department of Justice website: Friday, February 10, 2012 “Pennsylvania-based Lender to Pay U.S. $3.9 Million to Resolve False Claims Liability Related to Two Nursing Home MortgagesCare Facilities Located in New York and California Capmark Finance LLC in Horsham, Pa., has agreed to pay the United States $3.9 million, to settle a False Claims Act lawsuit, the Justice Department announced today.   The lawsuit, filed in the Central District of California, alleges that Capmark made false statements in connection with two nursing home mortgage loans insured by the U.S. Department of Housing and Urban Development (HUD).   Shortly after the United States filed its complaint in 2009, Capmark filed for bankruptcy protection.     The United States alleges that Capmark misrepresented material facts critical to the borrowers’ creditworthiness in the two loan applications and that Capmark’s false statements induced HUD to insure the loans, both of which defaulted, causing a loss to the government.   The two nursing homes were Canoga Care Center in Canoga Park, Calif., and Hudson Valley Care Center in Ghent, N.Y.   The allegations arise from investigation and audit work conducted by the HUD Office of Inspector General.   This case was handled by the Justice Department’s Civil Division with the assistance of HUD’s Office of General Counsel, Program Enforcement Branch.   “Today’s action should be a reminder to all FHA mortgage lenders.   Attesting to things you know to be false is not only lying, it is against the law and there will be consequences,” said Helen Kanovsky, HUD’s General Counsel.   This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force.   The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.   It includes representatives from a broad range of federal agencies, including regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.   The task force is working to improve efforts across the federal executive branch and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial rimes.

DOJ ALLEGES DALLAS COMPANY MISS-BRANDING DRUGS LED TO THREE DEATHS

The following excerpt is from the Department of Justice website: Friday, February 10, 2012 "U.S. Files Criminal Charges Against Dallas Company in Connection with Misbranded Drug Shipment That Led to Three Deaths The Justice Department, at the request of the Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI), has charged Gary D. Osborn and his corporation, ApothéCure Inc., with two misdemeanor criminal violations of the Federal Food, Drug and Cosmetic Act (FDCA) in connection with their interstate shipment of two lots of misbranded colchicine injectable solution that led to the deaths of three people in the Pacific Northwest. The United States filed the criminal information in the U.S. District Court for the Northern District of Texas. ApothéCure is a compounding pharmacy. The company, founded in 1991, is located in Dallas. Colchicine is used to prevent gout attacks (sudden, severe pain in one or more joints caused by abnormally high levels of a substance called uric acid in the blood) in adults, and to relieve the pain of gout attacks when they occur. The government’s charges are based on ApothéCure’s February 2007 shipment of 72 vials of compounded colchicine to a now-defunct medical center in Portland, Ore. On March 19, 2007, a patient in Yakima, Wash., received colchicine from this shipment. That patient died after receiving the infusion. The medical examiner there determined that the cause of death was multiple organ failure and acute colchicine toxicity. On March 30, 2007, colchicine from ApothéCure was administered to two other patients who were suffering from back pain. Within hours of receiving the colchicine injections, both patients became seriously ill and were taken to local hospitals. Both patients died shortly thereafter. The medical examiner in Oregon determined colchicine toxicity to be the cause of death for both patients. FDA testing of vials selected from the lethal shipment revealed that some of the vials were super-potent, containing 640 percent of the level of colchicine declared on the label. Other vials were determined to be sub-potent, and contained less than 62 percent of the declared levels on the labels. “The criminal charges we are filing today allege that the drugs mixed by Mr. Osborn’s company were misbranded which led to the tragic deaths of three people,” said Tony West, Assistant Attorney General of the Civil Division of the Department of Justice. “We can’t allow those who fail to take care that their products are safe to escape accountability, and today's enforcement action demonstrates we won’t.” The criminal information filed today charges that ApothéCure committed two prohibited acts under the FDCA by shipping misbranded drugs in interstate commerce. Mr. Osborn, as the person with responsibility over the firm’s operations, is strictly liable under the FDCA for the firm’s failure to follow federal law. In addition to the federal government’s criminal charges, Attorneys General have pursued civil actions in Texas and Oregon against Mr. Osborn and ApothéCure. Assistant Attorney General West acknowledged the close partnership with the FDA and OCI, which referred this matter to the Justice Department. The case is being prosecuted by Trial Attorneys John Claud and Patrick Runkle of the Civil Division’s Consumer Protection Branch. A criminal misdemeanor information is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt."

FORMER IRS EMPLOYEE USES KNOWLEDGE TO COMMIT CRIME

The following excerpt is from the Department of Justice website: “Friday, February 10, 2012 Former IRS Employee from Texas Sentenced to Nearly Nine Years in Prison on Theft of Government Property and Aggravated Identity Theft Convictions. Thomas W. Richardson was sentenced Thursday by U.S. District Judge Jane J. Boyle in Dallas to 105 months in prison and ordered to pay $30,649 in restitution, following his guilty plea in August 2011 to one count of theft of government property and one count of aggravated identity theft, the Justice Department announced today.  Judge Boyle ordered that Richardson surrender to the Bureau of Prisons on March 6, 2012. According to an order filed that set conditions for his release, Richardson is a resident of Mansfield, Tex. In handing down the sentence, Judge Boyle commented that Richardson was a former IRS employee who used his inside knowledge of IRS operations to commit his crime. According to the factual resume filed in the case, Richardson admitted that within a two-day period, April 15, 2006 to April 17, 2006, he filed or caused to be filed 29 fraudulent 2005 individual income tax returns.  Each federal income tax return claimed a refund of between $215,801 and $473,832.  Richardson admitted that the refunds claimed by all 29 tax returns totaled $7,922,657.   He further admitted that each tax return was filed claiming the married filing jointly election and listed two taxpayers, husband and wife.  In each case, the Social Security number reported on the tax returns was assigned to individuals and in most cases, the names on the tax returns matched the names of the individuals to whom the Social Security numbers were assigned.  Richardson admitted that the tax returns were prepared without the authorization of the 58 taxpayers listed on the tax returns.  All of the returns directed that the Internal Revenue Service (IRS) pay the money to one of Richardson’s bank accounts.   According to the factual resume filed in the case, the IRS paid out seven refunds totaling $1,865,401 between May 12, 2006 and May 19, 2006.  All but $30,649 was recouped by the IRS.”

TEEN DATING VIOLENCE AND PREVENTION MONTH

The following excerpt is from the Department of Justice website: February 14th, 2012 Posted by Tracy Russo Love is Respect: February is Teen Dating Violence Awareness and Prevention Month The following post appears courtesy of Susan B. Carbon, Director of the Office on Violence Against Women (OVW) Regardless of the day or month, many teens – including college students – often find themselves in unhealthy, sometimes abusive relationships that affect their quality of life, cause pain and concern among their families and friends, and interfere with school and community activities.  Now is the time to learn about ways to recognize and prevent this violence. During February, designated as Teen Dating Violence Awareness and Prevention Month, we join President Obama to call for a focused effort to break the cycle of violence by providing support and services to the victims, their families and their communities. As President Obama stated: The consequences of dating violence — spanning impaired development to physical harm — pose a threat to the health and well-being of teens across our Nation, and it is essential we come together to break the cycle of violence that burdens too many of our sons and daughters.  This month, we recommit to providing critical support and services for victims of dating violence and empowering teens with the tools to cultivate healthy, respectful relationships. Research indicates that teens and young women are especially vulnerable to experiencing violence in their relationships.   In one year, nearly one in ten high school students has been hit, slapped or physically hurt on purpose by a boyfriend or girlfriend.   And young people ages 18 and 19 experience the highest rates of stalking, which most often is committed by a current or former intimate partner for both male and female victims.  The prevalence of violence in the dating relationships of teens is simply unacceptable. We know that to reach young people, we need to speak their language.  With that idea in mind, OVW is supporting outreach and education efforts by educators, advocates, and non-profits, including the That’s Not Cool.com, a national public education campaign that uses digital examples of controlling, pressuring, and threatening behavior to raise awareness about and prevent teen dating abuse.  OVW also funds the National Dating Abuse Helpline at 1-866-331-9474.  Teens can also text “loveis” to 77054 to reach an advocate or chat on line by clicking on the icon found on loveisrespect.org. We must continue to advocate for the young people in our lives by providing safe spaces to have conversations about dating abuse and provide examples of healthy, violence-free relationships that include support, love and respect.  Only by continuing to engage in discussions on these challenging and difficult issues can we call attention to teen dating violence.  This is the first step towards preventing and ending the cycle of abuse. The resources listed in the President’s proclamation and in this blog are important resources that should be used, shared and discussed during February and throughout the year.    For more information about the Office on Violence Against Women, visit www.ovw.usdoj.gov. We remind all those in need of assistance, or other concerned friends and individuals, to call the National Domestic Violence Hotline at 1-800-799-SAFE or the National Sexual Assault Hotline at 1-800-656-HOPE.”

3 CALIFORNIA REAL ESTATE INVESTORS PLEAD GUILTY TO RIGGING BIDS AT FORECLOSURE ACUTIONS

The Following excerpt is from the U.S. Department of Justice website: February 9, 2012 “WASHINGTON – Three Northern California real estate investors have agreed to plead guilty today for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced. To date, as a result of the ongoing investigation, 20 individuals have agreed to plead guilty.   Charges were filed today in U.S. District Court for the Northern District of California in Oakland, Calif., against Barry Heisner of Brentwood, Calif.; Dominic Leung of Alameda, Calif.; and Hilton Wong of San Ramon, Calif.   According to court documents, for various lengths of time between August 2008 and January 2011, Heisner, Leung and Wong conspired with others not to bid against one another at public real estate foreclosure auctions. Instead, the investors designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County.   “The Antitrust Division will continue to pursue vigorously the perpetrators of these fraudulent schemes. Those who eliminated competition from the marketplace and lined their pockets while preying on the misfortune of others will be held accountable for their actions,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division also will aggressively seek to forfeit the proceeds earned by those who took a leading role in facilitating these conspiracies.”   “The integrity of the real estate market depends on the transparency and fairness of all participants,” said FBI Special Agent in Charge Stephanie Douglas. “When individuals take advantage of the public’s trust to enrich themselves they damage the very foundation of our economy. The FBI is committed to working with our local and federal partners to continue to bring those who engage in anticompetitive activities to justice.”   Heisner, Leung and Wong also were charged with conspiracies to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions took place at or near the courthouse steps where the public auctions were held. According to court documents, a forfeiture allegation was also included in the charges against Heisner.   The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Contra Costa County public foreclosure auctions at noncompetitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.   Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. Each count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum.   Today’s charges are the latest cases filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda Counties, Calif.   The investigation into fraud and bid rigging at certain real estate foreclosure auctions in Northern California is being conducted by the Antitrust Division’s San Francisco Field Office and the FBI’s San Francisco office.”

ASSISTANT HOUSTON HOSPITAL ADMINISTRATOR ARRESTED FOR MEDICARE FRAUD

The following excerpt is from the Department of Justice website: February 8, 2012 “WASHINGTON – An assistant administrator of a Houston hospital was arrested today on charges related to his alleged participation in a $116 million Medicare fraud scheme involving false claims for mental health treatment, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).                                                             An indictment filed in the Southern District of Texas and unsealed today charges Mohammed Khan, 62, of Houston, with one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive illegal health care kickbacks and five counts of paying or offering to pay health care kickbacks.  Khan is expected to make his initial appearance in federal court today in Houston.    “The indictment against Mr. Kahn alleges that he used his position as a hospital assistant administrator to submit millions in false claims to the Medicare program,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.   “According to the charges, he paid kickbacks to patient recruiters, owners of group homes and assisted living facilities, and beneficiaries so that he could fill his hospital with patients for whom he could bill the government for medically unnecessary services or services that were never provided.   We will continue aggressively to pursue individuals who attempt to enrich themselves at the expense of the Medicare program.”   “The defendant charged in this indictment is accused of stealing precious Medicare resources by billing for services that were medically unnecessary or never provided," said Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office.   “Our health care fraud efforts have never been more collaborative and aggressive. We will continue to work with our law enforcement partners to protect patients and fight against health care fraud.”   According to the indictment, Khan, as the assistant administrator of a Houston hospital, allegedly operated a scheme to defraud Medicare beginning in 2008 and continuing until his arrest today.  Khan allegedly caused the submission of false and fraudulent claims for partial hospitalization program (PHP) services to Medicare through the hospital.  A PHP is a form of intensive outpatient treatment for severe mental illness.      The indictment alleges that Khan paid kickbacks to owners and operators of group care homes and assisted living facilities and to patient recruiters in exchange for delivering ineligible Medicare beneficiaries to the hospital’s PHPs.  The indictment alleges that Khan also paid kickbacks to Medicare beneficiaries who attended the hospital’s PHPs.   These kickbacks included cigarettes, food and coupons redeemable for items available at the hospital’s “country stores.”   Khan and his co-conspirators submitted or caused to be submitted approximately $116 million in claims to Medicare for PHP services purportedly provided by the hospital to the recruited beneficiaries, when in fact, the PHP services were medically unnecessary or never provided.      Today’s charges were announced by Assistant Attorney General Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent in Charge Morris of the FBI’s Houston Field Office; Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG); the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU ); Special Agent in Charge Lucy R. Cruz of the Internal Revenue Service (IRS) Houston Field Office; Joseph J. Del Favero, Special Agent in Charge of the Chicago Field Office of the Railroad Retirement Board, Office of Inspector General (RRB-OIG); and Scott Rezendes, Special Agent in Charge of Field Operations of the Office of Personnel Management, Office of Inspector General (OPM-OIG).     The case is being prosecuted by Trial Attorney Laura M.K. Cordova, Attorney Allan Medina, Assistant Chief William Pericak and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section.  The case was investigated by the FBI, HHS-OIG, MFCU, IRS, RRB-OIG and OPM-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.   Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants who collectively have falsely billed the Medicare program for more than $3.2 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”  

MAN GETS 77 MONTHS FOR MILLIONS OF DOLLARS IN MEDICARE FRAUD

Tuesday, February 7, 2012

The following excerpt is from the Department of Justice website: 

"WASHINGTON – A Los Angeles-area man was sentenced yesterday to 77 months in prison for organizing and leading a medical clinic fraud scheme that used the stolen identities of physicians to submit more than $18.9 million in fraudulent claims to Medicare, the Department of Justice, the FBI and the Department of Health and Human Services (HHS) announced.

Eduard Aslanyan, 38, of Sherman Oaks, Calif., was sentenced by U.S. District Judge Consuelo B. Marshall in the Central District of California.   In addition to his prison term, Aslanyan was sentenced to three years of supervised release and was ordered to pay $10.8 million in restitution.

Aslanyan pleaded guilty in April 2011.   He admitted that between March 2007 and September 2008, he established a series of fraudulent medical clinics in and around Los Angeles to defraud Medicare.   Carolyn Vasquez, who previously pleaded guilty to conspiring with Aslanyan to defraud Medicare, recruited physicians to serve as the medical directors of Aslanyan’s fraudulent medical clinics.   The physicians did not perform services at the clinics and were rarely present at the clinics.   Physician assistants were hired by Aslanyan and Vasquez and were complicit in the fraud scheme at the clinics.

According to court documents, Aslanyan hired patient recruiters to find Medicare beneficiaries who were willing to provide the recruiters with their Medicare billing information in exchange for expensive, high-end power wheelchairs and other medical equipment which the patient recruiters told the beneficiaries they could receive for free.   Often, the Medicare beneficiaries did not have a legitimate medical need for the power wheelchairs and equipment.   The patient recruiters then provided the beneficiaries’ Medicare billing information to Aslanyan or brought the beneficiaries to Aslanyan’s clinics.   Aslanyan paid the patient recruiters cash kickbacks in exchange for recruiting the Medicare beneficiaries.

In court documents, Aslanyan admitted that he and Vasquez instructed and paid physician assistants who worked at his clinics to prescribe medically unnecessary power wheelchairs, medical equipment and diagnostic tests for the Medicare beneficiaries.   The physician assistants used stolen identities of physicians who did not supervise them or work at the clinics.  

According to court documents, Aslanyan profited from the scheme at his fraudulent medical clinics in several ways.   Aslanyan admitted that he allowed fraudulent diagnostic testing facilities to use the Medicare billing information he purchased from patient recruiters to submit false claims to Medicare for tests ordered at the clinics.   In exchange, the fraudulent diagnostic testing facilities paid Aslanyan cash kickbacks that were disguised as rent payments to Aslanyan.

Aslanyan also profited from the scheme by selling fraudulent prescriptions and documents generated at his clinics to the owners and operators of fraudulent durable medical equipment (DME) supply companies, which used the prescriptions and documents to submit false claims to Medicare.   Aslanyan also used the fraudulent prescriptions and documents to submit false claims to Medicare through his own fraudulent DME supply companies, Vila Medical Supply Inc. and Blanc Medical Supplies.  

According to court documents, as a result of Aslanyan’s conduct, he and his co-conspirators submitted approximately $18.9 million in fraudulent claims to Medicare.

Currently, Aslanyan is serving a three-year state sentence for assault.   On Jan. 9, 2012, Judge Marshall sentenced Vasquez to 60 months in prison for her role in the fraud scheme and ordered her to pay more than $6.2 million in restitution to Medicare.   A second co-defendant, David James Garrison, a physician assistant who worked at the fraudulent medical clinics with Vasquez and Aslanyan, is scheduled for trial on Feb. 7, 2012.   Defendants are presumed innocent until proven guilty at trial.  

The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the HHS Office of Inspector General (HHS-OIG); Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse.

The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section.  Former Special Trial Attorney Joseph Hudzik participated in the prosecution.  The case is being investigated by the FBI.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.

Since their inception in March 2007, strike force operations in nine districts have charged more than 1,160 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers."

MAN PROMISES ANOTHER A REDUCED SENTENCED FOR MONEY

Monday, February 6, 2012

The following excerpt is from the Department of Justice website:

"WASHINGTON – An Omaha, Neb., man pleaded guilty today to committing wire fraud for trying to solicit corrupt payments from an individual in return for a promised reduction in the individual’s ultimate prison sentence, announced Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

Austin Galvan, 30, was charged in a two-count indictment unsealed on Aug. 29, 2011, with wire fraud and obstruction of justice.   According to court documents filed in U.S. District Court for Nebraska, Galvan told an associate, who was facing federal criminal charges in the District of Nebraska, that he had a law enforcement contact in Nebraska who could secure a substantial reduction in his associate’s prison sentence in exchange for corrupt payments.   Galvan, in fact, had no such contact.

According to court documents, in subsequent conversations, Galvan urged his associate not to cooperate with federal authorities.   Galvan admitted that he assured his associate that his contact was in a position to help secure a reduction in the associate’s prison sentence, contingent upon corrupt payments.   Galvan also admitted that he gave his associate what he claimed was official material given to him by his purported law enforcement contact.  Specifically, Galvan provided his associate with an audio recording of a court hearing and claimed that his purported law enforcement contact had given it to him.   In fact, Galvan had downloaded the recording from the Public Access to Court Electronic Records system, or PACER.   Moreover, Galvan had provided his associate with what he claimed to be the business card of a federal judge who would assist in securing the sentence reduction, when in fact the federal judge was not handling the case.  

Wire fraud carries a maximum penalty of five years in prison and a $250,000 fine.   Sentencing is scheduled for May 11, 2012.  

The case is being prosecuted by Trial Attorneys Kevin Driscoll and Barak Cohen of the Criminal Division’s Public Integrity Section.   The case is being investigated by the FBI."