HUNDREDS OF FELONS ARRESTED DURING "OPERATION JUSTICE IV"

FROM:  U.S. FEDERAL MARSHALS SERVICE
Over 200 Wanted Felons Arrested During Valley Wide Operation
Phoenix, AZ – From April 16-20, Phoenix valley law enforcement partners collaborated on “Operation Justice IV”, a one week round-up of wanted felons in honor of National Crime Victims’ Rights Week. Operation Justice netted valley law enforcement partners 251 fugitives wanted throughout Maricopa and Pinal Counties. In addition to arresting these fugitives, 16 weapons were taken off the streets.
The U.S. Marshals Service in the District of Arizona through its Arizona WANTED Violent Offender Task Force coordinated this effort to coincide with National Crime Victims’ Rights Week which is observed the week of April 22-28, 2012. Since 1981, the Department of Justice’s Office for Victims of Crime has observed and assisted communities in promoting victims’ rights and to honor crime victims and those that advocate on their behalf. The vast majority of victims of violent crimes have no voice. During this week long operation law enforcement officers across the valley were their voice.

U.S. Marshal David Gonzales stated, "We know from experience, and the sad experiences from far too many victims, that a fugitive is more desperate, more predatory, and more likely to commit crimes that reduce the quality of life in our communities. These arrests will prevent numerous crimes committed by individuals who prey on our communities in order to survive while attempting to escape justice.”
Of the 251 fugitives arrested, 7 were wanted for sexual offenses. Robert Cummings, 25, was arrested by Operation Justice Participants at a residence in Buckeye.

Cummings was wanted by the Chula Vista, CA Police Department for Lewd or Lascivious Acts with a Minor. These charges stem from an allegation that Cummings sexually assaulted a known 14 year old female over a ten day period in 2011. It is alleged that Cummings committed numerous lewd and lascivious acts to the victim including communicating with the victim for sexual intent, oral copulation with a victim less than 16 years of age and penetration with a foreign object with a victim less than 16 years of age.

Numerous fugitives targeted during this operation were wanted for drug and weapons offenses. One of those arrested was Albert Merrill. Merrill, 32, was arrested by Operation Justice Participants at a residence in Avondale. Merrill was wanted by the Arizona Department of Corrections for violating the conditions of his parole. Merrill, a career criminal and documented gang member, was on parole after having been convicted of Misconduct Involving Weapons. On April 17th, Operation Justice Participants developed information that Merrill was residing at an Avondale residence. As Officer’s approached the residence, Merrill tried fleeing out the back door holding a pistol. Merrill was confronted by Officer’s as he was trying to climb a wall, at which time he dropped the weapon and attempted to flee in another direction forcing an Officer to deploy a projectile stun gun

to affect the arrest. Subsequent to the arrest, Officer’s found numerous other weapons in the room where Merrill was residing.

“Thanks to the collaborative efforts of the U.S. Marshals Service and our state and local law enforcement partners, the citizens of Maricopa County are safer today with the successful apprehension of these fugitives and the seizure of dangerous weapons and drugs,” said Maricopa County Attorney Bill Montgomery. “My office now looks forward to the opportunity to hold these violent offenders accountable and protecting the community from further harm,” he added.

Operation Justice involved over 100 law enforcement officers from 30 contributing agencies throughout Maricopa and Pinal Counties.

The United States Marshals Service is the nation’s oldest federal law enforcement agency. Annually, U.S. Marshals arrest more than 50 percent of all federal fugitives and serve more federal warrants than all other federal agencies combined.

MAN FOUND GUILTY OF PRUDUCING AND SELLING OBSCENE VIDEOS

FROM:  U.S. DEPARTMENT OF JUSTICE
Friday, April 27, 2012
Federal Jury Finds Ira Isaacs Guilty in Los Angeles Adult Obscenity Case
Ira Isaacs, 60, was found guilty today in U.S. District Court in Los Angeles on one count of engaging in the business of producing and selling obscene videos and four counts of distributing obscene videos, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Assistant Director in Charge Steve Martinez of the FBI’s Los Angeles Field Office, and Los Angeles Police Department Chief Charlie Beck.
         
A federal jury in the Central District of California found Isaacs guilty on all charged counts of a superseding indictment filed in April 2011.

Evidence presented at trial established that beginning in or about 1999 and continuing until at least 2011, Isaacs, doing business under the name L.A. Media, operated numerous websites, through which he advertised and sold obscene videos which he acquired from other persons.  The obscene videos included a video approximately two hours in length of a female engaging in sex acts involving human bodily waste and a video one hour and 37 minutes in length of a female engaged in sex acts with animals.

The evidence presented at trial also established that in or about 2004, Isaacs began operating under the name Stolen Car Films, and made obscene videos in which he instructed women to engage in sexual activity involving human bodily waste.  He subsequently advertised and sold the videos through his various websites.

Isaacs is scheduled to be sentenced on Aug. 6, 2012.

The case is being prosecuted by Trial Attorney Michael W. Grant and Deputy Chief Damon King of the Criminal Division's Child Exploitation and Obscenity Section (CEOS), with the assistance of Jeannette Gunderson, a trial attorney with the Asset Forfeiture and Money Laundering Section.  The investigation was conducted by the FBI and Los Angeles Police Department.

MAN GETS 36 MONTHS IN PRISON FOR FALSE REFUND FILING AND FAILING TO FILE INCOME TAX RETURNS

FROM:  U.S. DEPARTMENT OF JUSTICE  
Friday, April 27, 2012
Virginia Man Sentenced for Filing a False Refund Claim Based on Forms-1099 and for Failing to File Tax Returns
Richard Jaensch, 54, of Annandale, Va., was sentenced today to 36 months in prison by U.S. District Judge Gerald Bruce Lee, the Justice Department and Internal Revenue Service (IRS) announced. Jaensch had been found guilty on Dec. 7, 2011, by a federal jury sitting in Alexandria, Va., of corruptly endeavoring to impede the IRS, filing a false claim for a refund and four counts of failing to file tax returns for 2004 through 2007.  Judge Lee also sentenced Jaensch to three years supervised release and ordered him to pay $197,984 in restitution to the IRS.

According to evidence introduced at trial, Richard Jaensch, a self-employed plumber, failed to file personal income tax returns for many years, beginning in 2002, despite the fact that he was required to do so by law because of income he made from his business and from stock trading. The first tax return he filed after 2002 was a false 2008 tax return claiming a $774,052 refund based on false Forms 1099-OID that the defendant submitted to the IRS.

Over the years, Jaensch also obstructed and impeded the IRS by, among other acts: filing numerous documents and pleadings in Fairfax County, Va., claiming, that he and his wife, a federal employee, were not persons required to file federal income tax returns; that his wife was not a party to the Constitution of the ?united States of America? and that she was not a taxpayer; and providing false information to the IRS.  In addition, Jaensch caused his wife to present letters to her employer directing them to stop withholding federal income taxes from her salary. The IRS began levying his wife's paycheck and bank accounts to satisfy her outstanding tax liability and Jaensch continued his obstructive conduct by filing or causing his wife to file correspondence with the IRS claiming that the IRS could not instruct her employer to withhold taxes from her paycheck.

Jaensch?s wife, Janet, was a former high-level civilian employee in the Department of the Navy during the time that she was not filing tax returns at Richard Jaensch?s direction.  She pleaded guilty to willfully failing to file a tax return and was sentenced on Dec. 13, 2011, to three years of probation and order to pay more than $137,000 in restitution to the IRS.

This case was investigated by Special Agents of IRS - Criminal Investigation and prosecuted by Trial Attorneys Jason Poole and Caryn Finley of the Justice Department?s Tax Division and Assistant U.S. Attorney Gene Rossi.

U.S. MARSHALS ANNOUNCE ARREST OF SEXUAL ASSAULT AND KIDNAPPING SUSPECT

FROM:  U.S. MARSHALS SERVICE
Reno's Fugitive Task Force Arrests Colorado Sexual Assault and Kidnapping Suspect
Reno, NV – The Reno United States Marshals Service (USMS) led Fugitive Task Force, in partnership with the Department of Veterans Police, announces the arrest of Landan R. McMain (28). McMain is wanted by the Colorado Springs Police Department on an outstanding arrest warrant for multiple charges including kidnapping and sexual assault. It is alleged in 2006; McMain kidnapped and sexually assaulted an adult female. The warrant for arrest was issued on April 12, 2012 after McMain was determined to be a suspect.
After receiving information McMain was residing in Northern Nevada, the Task Force worked with the Department of Veterans Police to affect the arrest. McMain was arrested this afternoon, without incident, where he was employed at the Reno Veterans Administration Medical Center. He has been booked into the Washoe County Jail, as a fugitive from justice, awaiting extradition to Colorado.

The Fugitive Task Force, led by the U.S. Marshals Service, is a partnership comprised of law enforcement investigators from the United States Marshals Service, Washoe County Sheriff’s Office, Nevada Department of Public Safety (Probation & Parole), and Sparks Police Department. The Task Force combines the resources and expertise of local, state, and federal law enforcement in a coordinated effort to arrest dangerous fugitives and pursue sexual offenders wherever they are located.

FORMER MORGAN STANLEY EXECUTIVE PLEADS GUILTY IN FOREIGN CORRUPT PRACTICES ACT VIOLATIONS

FROM:  DEPARTMENT OF JUSTICE
Wednesday, April 25, 2012
Former Morgan Stanley Managing Director Pleads Guilty for Role in Evading Internal Controls Required by FCPA
WASHINGTON – A former managing director for Morgan Stanley’s real estate business in China pleaded guilty today for his role in a conspiracy to evade the company’s internal accounting controls, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Loretta E. Lynch for the Eastern District of New York; and Janice Fedarcyk, Assistant Director in Charge of the FBI’s New York Field Office.

Garth Peterson, 42, an American citizen living in Singapore, pleaded guilty to one-count criminal information charging him with conspiring to evade internal accounting controls that Morgan Stanley was required to maintain under the Foreign Corrupt Practices Act (FCPA).  Peterson pleaded guilty in Brooklyn, N.Y., before Senior U.S. District Judge Jack B. Weinstein.

“Mr. Peterson admitted today that he actively sought to evade Morgan Stanley’s internal controls in an effort to enrich himself and a Chinese government official,” said Assistant Attorney General Breuer.  “As a managing director for Morgan Stanley, he had an obligation to adhere to the company’s internal controls; instead, he lied and cheated his way to personal profit.  Because of his corrupt conduct, he now faces the prospect of prison time.”

“This defendant used a web of deceit to thwart Morgan Stanley’s efforts to maintain adequate controls designed to prevent corruption.  Despite years of training, he circumvented those controls for personal enrichment. We take seriously our role in detecting and prosecuting efforts to evade those controls,” said U.S. Attorney Lynch.
“The defendant engaged in a pattern of self-dealing and deception that perpetuated his unjust enrichment,” said FBI Assistant Director Fedarcyk.  “He not only circumvented his employer’s internal controls; he violated the law.”

According to court documents, Morgan Stanley maintained a system of internal controls meant to ensure accountability for its assets and to prevent employees from offering, promising or paying anything of value to foreign government officials.  Morgan Stanley’s internal policies, which were updated regularly to reflect regulatory developments and specific risks, prohibited bribery and addressed corruption risks associated with the giving of gifts, business entertainment, travel, lodging, meals, charitable contributions and employment.  Morgan Stanley frequently trained its employees on its internal policies, the FCPA and other anti-corruption laws.  Between 2002 and 2008, Morgan Stanley trained various groups of Asia-based personnel on anti-corruption policies 54 times.  During the same period, Morgan Stanley trained Peterson on the FCPA seven times and reminded him to comply with the FCPA at least 35 times.  Morgan Stanley’s compliance personnel regularly monitored transactions, randomly audited particular employees, transactions and business units, and tested to identify illicit payments.  Moreover, Morgan Stanley conducted extensive due diligence on all new business partners and imposed stringent controls on payments made to business partners.

According to court documents, Peterson conspired with others to circumvent Morgan Stanley’s internal controls in order to transfer a multi-million dollar ownership interest in a Shanghai building to himself and a Chinese public official with whom he had a personal friendship.  The corruption scheme began when Peterson encouraged Morgan Stanley to sell an interest in a Shanghai real-estate deal to Shanghai Yongye Enterprise (Group) Co. Ltd., a state-owned and state-controlled entity through which Shanghai’s Luwan District managed its own property and facilitated outside investment in the district.  Peterson falsely represented to others within Morgan Stanley that Yongye was purchasing the real-estate interest, when in fact Peterson knew the interest would be conveyed to a shell company controlled by him, a Chinese public official associated with Yongye and a Canadian attorney.  After Peterson and his co-conspirators falsely represented to Morgan Stanley that Yongye owned the shell company, Morgan Stanley sold the real-estate interest in 2006 to the shell company at a discount to the interest’s actual 2006 market value.  As a result, the conspirators realized an immediate paper profit of more than $2.5 million.  Even after the sale, Peterson and his co-conspirators continued to claim falsely that Yongye owned the shell company, which in reality they owned.  In the years since Peterson and his co-conspirators gained control of the real-estate interest, they have periodically accepted equity distributions and the real-estate interest has appreciated in value.
 
At sentencing, scheduled for July 17, 2012, Peterson faces a maximum penalty of five years in prison and a maximum fine of $250,000 or twice his gross gain from the offense.  After considering all the available facts and circumstances, including that Morgan Stanley constructed and maintained a system of internal controls, which provided reasonable assurances that its employees were not bribing government officials, the Department of Justice declined to bring any enforcement action against Morgan Stanley related to Peterson’s conduct.  The company voluntarily disclosed this matter and has cooperated throughout the department’s investigation.

THREE SENTENCED IN $60 MILLION HEALTH CARE FRAUD SCHEME

FROM: DEPARTMENT OF JUSTICE
Wednesday, April 25, 2012
Three Operators of Miami Home Health Company Sentenced in $60 Million Health Care Fraud Scheme

WASHINGTON – Three operators of a Miami health care agency were sentenced today to 120, 87 and 87 months in prison, respectively, for their participation in a $60 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
 
U.S. District Judge Ursula Ungaro in Miami sentenced Roberto Gonzalez to 120 months in prison, Olga Gonzalez to 87 months in prison and Fabian Gonzalez to 87 months in prison.  Each defendant was also sentenced to three years of supervised release and was ordered to pay $40 million in restitution, jointly and severally with co-defendants. 

Roberto, Olga and Fabian Gonzalez each pleaded guilty last year to one count of conspiracy to commit health care fraud.

According to the court documents, Roberto Gonzalez, 61, was the president and Olga Gonzalez, 57, was the vice president of Nany Home Health Inc., a Florida home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries.  Fabian Gonzalez, 39, was head of the Quality and Assurance Department for Nany. 

According to plea documents, the defendants conspired with patient recruiters, including Miami-area staffing agencies, for the purpose of billing the Medicare program for unnecessary home health care and therapy services.  The staffing agencies functioned as patient recruiters and provided patients to Nany.  The Gonzalezes and their co-conspirators paid kickbacks and bribes to patient recruiters and the staffing agencies in return for providing patients to Nany, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries.
The Gonzalezes used the prescriptions, POCs and medical certifications to fraudulently bill Medicare for home health care services, which the Gonzalezes knew was in violation of federal criminal laws.
According to court documents, Nany nurses and office staff falsified patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services from Nany when, in fact, the Gonzalezes knew that the beneficiaries did not qualify for and did not receive such services.  The nurses and office staff at Nany described in the nursing notes and patient files symptoms that were non-existent.  The Gonzalezes knew that these files were falsified so that Medicare could be billed for medically unnecessary services.

From approximately January 2006 through November 2009, Roberto, Olga and Fabian Gonzalez, and their co-conspirators submitted approximately $60 million in false and fraudulent claims to Medicare, and Medicare paid approximately $40 million on those claims.

The pleas were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.  The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Miami.

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 $3.6 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.

2 ARYAN BROTHERHOOD OF TEXAS GANG MEMBERS SENTENCED FOR RACKETEERING

FROM:  U.S. DEPARTMENT OF JUSTICE
Monday, April 23, 2012
Two Aryan Brotherhood of Texas Gang Members Sentenced in Houston for Violent Crimes in Aid of Racketeering
WASHINGTON – Two members of the Aryan Brotherhood of Texas (ABT) have been sentenced to federal prison for their role in an aggravated assault that took place in Tomball, Texas, in September 2008, Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas announced today.

On April 20, 2012, U.S. District Court Senior Judge Ewing Werlein Jr. sentenced Michael Burkett, 34, aka “Redneck,” to 27 months in prison and Shane Dallmeyer, 31, aka “Lock Jaw,” to 33 months in prison.

Burkett and Dallmeyer, both of the greater Houston area, pleaded guilty to racketeering aggravated assault for their role in the beating of an ABT prospect member.

According to court documents, the defendants were members of the ABT, a powerful race-based, state-wide organization that operated inside and outside of state and federal prisons throughout the United States.   The ABT was established in the early 1980s within the Texas prison system.  The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s.   According to court documents, previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism.   Over time, the ABT has expanded its criminal enterprise to include illegal activities for profit.

According to court documents, the ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise.   Members, and oftentimes associates, are required to follow the orders of higher-ranking members, often referred to as “direct orders.”

According to court documents, Burkett and Dallmeyer, along with nine fellow ABT gang members, participated in the beating of an ABT prospect member at the home of another ABT gang leader, Steven Walter Cooke, 48, aka “Stainless,” in Tomball, on Sept. 22, 2008.  The ABT prospect, who sustained serious bodily injury, was beaten by ABT gang members because he violated ABT rules of conduct.

Eleven of the 12 co-defendants have pleaded guilty for their roles in the assault.   The 12th ABT gang member, David Harlow, 43, aka, “Bam Bam,” was found guilty by Senior Judge Werlein on March 21, 2012, at trial in the Southern District of Texas.

This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the FBI; the U.S. Marshals Service; the Bureau of Prisons; the Texas Ranger Division – Texas Department of Public Safety; the Montgomery County, Texas, Sheriff’s Department; the Houston Police Department-Gang Division; the Tomball Police Department; the Texas Department of Criminal Justice – Inspector General; and the Harris County, Texas, Sheriff’s Office.

The case is being prosecuted by David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Jay Hileman of the Southern District of Texas.

MAN SENTENCED FOR VIOLENT ROBBERIES OF ASIAN BUSINESS OWNERS

FROM:  FEDERAL BUREAU OF INVESTIGATION
Monday, April 23, 2012
Philadelphia Man Sentenced to 400 Months in Prison for Role in Violent Home Invasion Robberies of Business Owners in Four States
WASHINGTON – Tahn Le, 44, of Philadelphia, was sentenced today to 400 months in prison for his participation in a conspiracy to commit violent home invasion robberies of successful Asian business owners in Pennsylvania, New Jersey, Maryland and Virginia, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.

U.S. District Court Judge Legrome D. Davis also ordered Le to serve five years of supervised release following his prison term and to pay $112,689 in restitution.   After a four-day trial, a federal jury in the Eastern District of Pennsylvania found Tahn Le guilty on Jan. 20, 2012, of conspiracy to interfere with interstate commerce through multiple home invasion robberies and related firearms violations.  To date, seven co-defendants have pleaded guilty for their roles in the conspiracy and are awaiting sentencing: Teo Van Bui, Buu Huu Truong, Thach Van Nguyen, Den Van Nguyen, Denise Novelli, Sidney Biggs and Hung T. Ngo.

According to evidence presented at trial, Le and his co-defendants targeted successful Asian business owners in Pennsylvania, New Jersey, Maryland and Virginia for home invasion robberies because they believed that the owners stored significant amounts of business proceeds in their homes.  In carrying out the robberies, the defendants brandished handguns, tied up, and in some instances, beat their victims, and stole business proceeds as well as expensive jewelry.

The case was prosecuted by Trial Attorneys John S. Han and Robert Livermore of the Criminal Division’s Organized Crime and Gang Section.

The case was investigated by the FBI; the Poconos Township, Penn., Police Department; the Freehold Borough, N.J., Police Department; the Monroe Township, N.J., Police Department; and the Fairfax County, Va., Police Department.  Additional assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

COURT DOCUMENT: BRIAN J. SMART FOUND GUILTY BEFORE SEC OF FRAUD REGARDING INVESTOR FUNDS

Brian J. Smart

KAZAKHSTANI NATIONAL PLEADS GUILTY TO MONEY LAUNDERING

FROM:  U.S. DEPARTMENT OF JUSTICE
Friday, April 20, 2012
Kazakhstani National Pleads Guilty to Money Laundering for “Hack and Dump” Scheme
WASHINGTON – Daniyar Zhaxalyk, 25, a citizen of Kazakhstan who entered the United States on a student visa, pleaded guilty today in Houston to one count of money laundering, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Kenneth Magidson for the Southern District of Texas.
Zhaxalyk pleaded guilty before U.S. District Judge Ewing Werlein Jr. in the Southern District of Texas.  Zhaxalyk and three co-conspirators were charged in an indictment filed in the Southern District of Texas and unsealed in December 2011.

Zhaxalyk admitted to laundering funds generated in a sophisticated “hack and dump” stock scheme that caused more than $400,000 in losses.  The indictment charged that Zhaxalyk’s co-conspirators illegally accessed brokerage accounts to engage in a stock fraud scheme in which the compromised accounts were used to purchase borrowed shares of stock at above-market prices from the defendants’ personal brokerage accounts.  Zhaxalyk’s co-conspirators then allegedly repurchased the borrowed shares at the considerably lower market price, returned the borrowed shares to the stock lender and claimed as profit the difference between the market price and the inflated price paid by the compromised victim accounts.  Zhaxalyk admitted that he received and made wire transfers and withdrawals of the funds generated from the fraudulent stock sales and supervised other Houston-based students recruited into the scheme to launder funds.
A co-defendant, Alexey Li, also a citizen of Kazakhstan who entered the United States on a student visa, previously pleaded guilty in Houston on March 2, 2012, and is awaiting sentencing.  Two other defendants remain at large.
At sentencing, Zhaxalyk will face a maximum penalty of 10 years in prison and a $250,000 fine.

This case was investigated by the St. Louis, San Francisco and Houston offices of the FBI.  The case is being prosecuted by Trial Attorney Ethan Arenson of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Mark McIntyre of the Southern District of Texas.

KAZAKHISTANI PLEADS GUILTY IN HOUSTON TX TO MONEY LAUNDERING FOR HACK AND DUMP SCHEME

FROM:  U.S. DEPARTMENT OF JUSTICE
Friday, April 20, 2012
Kazakhstani National Pleads Guilty to Money Laundering for “Hack and Dump” Scheme
WASHINGTON – Daniyar Zhaxalyk, 25, a citizen of Kazakhstan who entered the United States on a student visa, pleaded guilty today in Houston to one count of money laundering, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Kenneth Magidson for the Southern District of Texas.

Zhaxalyk pleaded guilty before U.S. District Judge Ewing Werlein Jr. in the Southern District of Texas.  Zhaxalyk and three co-conspirators were charged in an indictment filed in the Southern District of Texas and unsealed in December 2011.

Zhaxalyk admitted to laundering funds generated in a sophisticated “hack and dump” stock scheme that caused more than $400,000 in losses.  The indictment charged that Zhaxalyk’s co-conspirators illegally accessed brokerage accounts to engage in a stock fraud scheme in which the compromised accounts were used to purchase borrowed shares of stock at above-market prices from the defendants’ personal brokerage accounts.  Zhaxalyk’s co-conspirators then allegedly repurchased the borrowed shares at the considerably lower market price, returned the borrowed shares to the stock lender and claimed as profit the difference between the market price and the inflated price paid by the compromised victim accounts.  Zhaxalyk admitted that he received and made wire transfers and withdrawals of the funds generated from the fraudulent stock sales and supervised other Houston-based students recruited into the scheme to launder funds.

A co-defendant, Alexey Li, also a citizen of Kazakhstan who entered the United States on a student visa, previously pleaded guilty in Houston on March 2, 2012, and is awaiting sentencing.  Two other defendants remain at large.
At sentencing, Zhaxalyk will face a maximum penalty of 10 years in prison and a $250,000 fine.

This case was investigated by the St. Louis, San Francisco and Houston offices of the FBI.  The case is being prosecuted by Trial Attorney Ethan Arenson of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Mark McIntyre of the Southern District of Texas.

TWO FORMER EXECUTIVES OF CALIFORNIA BASED COMPANY PLEAD GUILTY TO FOREIGN BRIBERY OFFENSES

FROM:  U.S. DEPARTMENT OF JUSTICE
Tuesday, April 17, 2012
Two Former Executives of California Valve Company Plead Guilty to Foreign Bribery Offenses

WASHINGTON – Stuart Carson, the former president of Rancho Santa Margarita, Calif.-based valve company Control Components Inc. (CCI), and Hong “Rose” Carson, the former CCI director of sales for China and Taiwan, have pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA), announced the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Central District of California.

The Carsons, who are married and reside in San Clemente, Calif., each pleaded guilty late yesterday before U.S. District Judge James V. Selna in Santa Ana, Calif., to separate one-count superseding informations charging them with making a corrupt payment to a foreign government official in violation of the FCPA.  According to court documents, CCI designed and manufactured service control valves for use in the nuclear, oil and gas, and power generation industries worldwide.  At sentencing, Stuart Carson, 73, faces up to 10 months in prison.  Rose Carson, 48, faces a sentence of three years probation, which may include up to six months of home confinement.  Sentencing is scheduled for Oct. 15, 2012.

On Apr. 8, 2009, the Carsons and four other former executives of CCI were charged in a 16-count indictment for their roles in the foreign bribery scheme.  The four former CCI executives charged include Paul Cosgrove, CCI’s former director of worldwide sales; David Edmonds, CCI’s former vice president of worldwide customer service; Flavio Ricotti, the former CCI vice president of sales for Europe, Africa and the Middle East; and Han Yong Kim, the former president of CCI’s Korean office.  On Apr. 28, 2011, Ricotti pleaded guilty to one count of conspiracy to violate the FCPA.  The trial of Cosgrove and Edmonds is scheduled for Jun. 5, 2012.  The charges against Kim are pending as well.  An indictment merely contains allegations and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

In related cases, two defendants previously pleaded guilty to conspiring to bribe officers and employees of foreign state-owned companies on behalf of CCI.  On Jan. 8, 2009, Mario Covino, the former director of worldwide factory sales for CCI, pleaded guilty to one count of conspiracy to violate the FCPA.  On Feb. 3, 2009, Richard Morlok, the former CCI finance director, also pleaded guilty to one count of conspiracy to violate the FCPA.  Covino, Morlok and Ricotti are scheduled to be sentenced in November and December 2012.

On July 31, 2009, CCI pleaded guilty to a three-count criminal information charging the company with conspiracy to violate the FCPA and the Travel Act, and two substantive violations of the FCPA.  CCI was ordered to pay an $18.2 million criminal fine, placed on organizational probation for three years, and ordered to create and implement a compliance program and retain an independent compliance monitor for three years.  CCI admitted that from 2003 through 2007, it made corrupt payments in more than 30 countries, which resulted in net profits to the company of approximately $46.5 million from sales related to those corrupt payments.

The case is being prosecuted by Deputy Chief Charles G. La Bella and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Douglas McCormick and Gregory Staples of the U.S. Attorney’s Office for the Central District of California.  The case was investigated by the FBI’s Washington Field Office, and its team of special agents dedicated to the investigation of foreign bribery cases.

MAN GETS PRISON TIME FOR EXPLOITING A CHILD OUTSIDE OF THE U.S.

FROM:  U.S. DEPARTMENT OF JUSTICE
Wednesday, April 11, 2012
Former Employee of Government Contractor Sentenced in Oklahoma for Child Pornography Offense

WASHINGTON – A former employee of a government contractor was sentenced today to 27 months in prison followed by seven years of supervised release on a child exploitation charge brought under the Military Extraterritorial Jurisdiction Act (MEJA), announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Northern District of Oklahoma Thomas Scott Woodward.

  Keith Strimple, 58, of Tulsa, Okla., pleaded guilty in January 2012 before Chief U.S. District Judge Gregory Frizzell in the Northern District of Oklahoma to one count of attempted possession of a visual depiction of a minor engaging in sexually explicit conduct.

According to court documents and proceedings, Strimple worked as an employee of a government contractor between April and September 2007 at a U.S. military facility at Camp Fallujah, Iraq.  During that time period, Strimple admitted that he searched for and downloaded videos of minors that he believed to be as young as 12 years old engaging in sexually explicit conduct and downloaded such images using the contractor’s computer system.

MEJA gives U.S. courts jurisdiction to prosecute crimes committed outside the United States by, among others, employees of a government contractor whose work supports a military mission.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims.

FORMER PARTNER IN ACCOUNTING FIRM SENTENCED FOR TAX CRIMES

FROM:  U.S. JUSTICE DEPARTMENT
Monday, April 16, 2012
Former Partner at Major International Accounting Firm Sentenced to Prison for Tax Crimes
Stephen A. Favato, a resident of Point Pleasant Beach, N.J., and a former partner in BDO Seidman LLP’s Woodbridge, N.J., office, was sentenced to 18 months in prison for tax crimes, the Justice Department and the Internal Revenue Service (IRS) announced today.   In August 2010, a jury sitting in Newark, N.J., found Favato guilty of one count of corruptly endeavoring to obstruct and impede the Internal Revenue laws and one count of aiding and assisting in the preparation and filing of a false income tax return.

During the trial, evidence presented proved that from late 2001 through April 2005, Favato attempted to obstruct the IRS by, among other conduct, advising his client, Daniel Funsch, on how to include false items on the 2002, 2003 and 2004 joint income tax returns for Funsch and his then-wife.   Additionally, the evidence proved that Favato knowingly prepared and signed false joint income tax returns for the Funsches for these years, causing over $114,000 of tax loss to the IRS in connection with the Funsches’ filed 2002 return and attempting to cause over $70,000 of tax loss in connection with tax years 2003 and 2004.

The evidence presented at the trial established that Favato advised Funsch to significantly reduce the salary payments that Funsch was receiving from his corporation and to instead have this compensation paid to Funsch’s limited liability company, Great Escape Yachts LLC, in the form of purported lease payments for Funsch’s yacht.   However, his corporation had not leased the yacht.   This course of action recommended by Favato enabled Funsch to fraudulently deduct his personal yacht expenses as business expenses.   In addition, the evidence presented showed that Favato advised Funsch on how to falsely increase his expenses in order to fraudulently eliminate a portion of the gain on three properties that Funsch sold in 2002 and 2004.   Finally, the evidence showed that Favato advised Funsch to report inflated charitable contributions on Funsch’s 2003 tax return.   The jury acquitted Favato on one count of tax evasion.

FUGITIVE ATTEMPTED MURDER SUSPECT APPREHENDED BY MARSHALS

FROM:  U.S. MARSHALS SERVICE
U.S. Marshals Fugitive Task Force Arrests Broward County Attempted Murder
Suspect at Tallahassee Apartment Complex

Tallahassee, FL – The US Marshals Florida Regional Fugitive Task Force (FRFTF) today announced the arrest of 33 year old Ronell Octavius Gillins of Miramar, Florida at an apartment complex located at 2616 Mission Road in Tallahassee, FL. Gillins was currently being sought by the Broward County Sheriff’s Office in Miramar, FL on charges of Attempted 1s Degree Murder. According to Broward County Detectives, Gillins was involved in a physical altercation with his pregnant fiancé, Tameka Francis, on 03/31/2012 in Miramar, FL in which Gillins is alleged to have choked and then slammed the victims head against a vehicle. Later that same day the victim of the domestic dispute was walking with her brother, Glenroy Dunn, when both were confronted by Gillins. According to information provided by investigators, Gillins fired one shot from a handgun striking Glenroy Dunn in his abdomen and then turned the gun towards his fiancé. As the two victims attempted to retreat to their residence, Gillins was observed running from the area and then fleeing in an unknown vehicle. Early this morning FRFTF Task Force members received information from the US Marshals task force in Ft. Lauderdale that Gillins had possibly fled South Florida and was staying with a family member in Tallahassee. FRFTF members discovered that Gillins had a nephew currently residing at the Stratford Landings Apartment Complex and established surveillance on the apartment early this morning. At approximately 8:30AM FRFTF members along with marked Leon County Sheriff’s Office deputies surrounded the residence and called Gillins out of the apartment where he was arrested without incident. Gillins was then transported to the Leon County Jail and booked in on his outstanding Broward County charge.

The Tallahassee Division of the FRFTF is comprised of state and local law enforcement officers from the Florida Department of Law Enforcement, Gadsden County Sheriff’s Office, Leon County Sheriff’s Office, Leon County State Attorney’s Office, Liberty County Sheriff’s Office, Madison County Sheriff’s Office, Perry Police Department, Tallahassee Police Department, Taylor County Sheriff’s Office, and the Wakulla County Sheriff’s Office. US Marshal Ed Spooner stated that the arrest of Ronell Gillins showcased the ability of federal, state and local law enforcement officers who currently work under the authority of the US Marshals Florida Regional Fugitive Task Force to quickly locate and safely apprehend violent fugitives who are on the run and hiding out in the North Florida area.

MEMBERS OF ARYAN BROTHERHOOD OF TEXAS GANG SENTENCED FOR VIOLENT CRIMES

FROM:  DEPARTMENT OF JUSTICE
Friday, April 13, 2012
Five Aryan Brotherhood of Texas Gang Members Sentenced in Houston for Violent Crimes in Aid of Racketeering
WASHINGTON – Five members of the Aryan Brotherhood of Texas (ABT) have been sentenced to federal prison for their role in an aggravated assault that took place in Tomball, Texas, in September 2008, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

U.S. District Court Senior Judge Ewing Werlein Jr. today sentenced Zechariah Aaron Johnston, 31, aka “Oz,” to 84 months in prison; Stephen Kyle Knebel, 33, aka “Lil Evil,” to 24 months in prison; Robert Lynn Sheats, 33, aka “Dirty,” to 36 months in prison; and Johnny Ray Nichols, 35, aka “Nick,” to 18 months in prison.  On March 23, 2012, Senior Judge Werlein sentenced Rusty Dwayne Plante, 34, aka “Rusty,” to 36 months in prison.
All five defendants pleaded guilty for their role in the aggravated assault of an ABT prospect member.  Johnston, Knebel and Nichols each pleaded guilty to racketeering aggravated assault.  Plante and Sheats pleaded guilty to conspiracy to commit racketeering aggravated assault.  All five defendants are from the greater Houston area.

According to court documents, the defendants were members of the ABT, a powerful race-based, state-wide organization that operated inside and outside of state and federal prisons throughout the United States.  The ABT was established in the early 1980s within the Texas prison system.  The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s.  According to court documents, previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism.  Over time, the ABT has expanded its criminal enterprise to include illegal activities for profit.

According to court documents, the ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise.  Members, and oftentimes associates, are required to follow the orders of higher-ranking members, often referred to as “direct orders.”

According to court documents, Johnston, Knebel, Plante, Nichols and Sheats, along with seven fellow ABT gang members, participated in the beating of an ABT prospect member at the home of another ABT gang leader, Steven Walter Cooke, 48, aka “Stainless,” in Tomball, on Sept. 22, 2008.  The ABT prospect, who sustained serious bodily injury, was beaten by ABT gang members because he violated ABT rules of conduct.
Eleven of the 12 co-defendants have pleaded guilty for their roles in the assault.  The 12th ABT gang member, David Harlow, 43, aka, “Bam Bam,” was found guilty by Senior Judge Werlein on March 21, 2012, at trial in the Southern District of Texas.

This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the FBI; the U.S. Marshals Service; the Texas Ranger Division – Texas Department of Public Safety; the Walker County, Texas, Sheriff’s Office; the Montgomery County, Texas, Sheriff’s Department; the Houston Police Department-Gang Division; the Tomball Police Department; the Texas Department of Criminal Justice – Inspector General; and the Harris County, Texas, Sheriff’s Office.
The case is being prosecuted by David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Jay Hileman of the Southern District of Texas.

UNIVERSITY OF CALIFORNIA REACHES AGREEMENT WITH GOVERNMENT TO RESOLVE HARASSMENT AGAINST AFRICAN-AMERICANS

FROM:  DEPARTMENT OF JUSTICE
Friday, April 13, 2012
Departments of Justice and Education Reach Agreement with the University of California, San Diego to Resolve Harassment Allegations
The Departments of Justice and Education reached a settlement agreement with the University of California, San Diego (UCSD), to resolve an investigation into complaints of racial harassment against African-American students on campus.  Titles IV and VI of the Civil Rights Act of 1964 each prohibit harassment based on race.

The complaints alleged multiple incidents of racial harassment on campus, including public displays of nooses and a Ku Klux Klan-style hood, and the hosting of an off-campus party where students were invited to dress as stereotypes of African-Americans.   After conducting an extensive investigation into the alleged incidents, and following the receipt of additional complaints of racial discrimination and harassment on campus, the Departments of Justice and Education worked collaboratively with the university to address concerns regarding racial hostility on campus.

UCSD voluntarily entered into a resolution agreement with the departments.   Under the terms of the resolution agreement, UCSD will take steps to prevent racial harassment on campus, respond appropriately to harassment that occurs, and eliminate any hostile environment resulting from harassment.   The university has agreed to revise its campus policies and procedures related to racial harassment to ensure they are consistent with federal civil rights laws; maintain an Office for the Prevention of Harassment and Discrimination to receive, investigate, and resolve complaints of harassment and discrimination; and provide mandatory trainings for staff and students on the university’s anti-discrimination policies and procedures.  The university also voluntarily initiated a number of additional programs to address campus climate issues, and the departments will monitor the implementation of those programs to evaluate their impact on resolving the departments’ concerns.

“Students have a right to seek and obtain an education without facing racial harassment.   UCSD, like all colleges and universities, has an obligation to make clear that racial discrimination and harassment on campus will not be tolerated, and this agreement is a significant step in the right direction,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “We commend the university for working with us to address this matter, and we recognize the importance of this agreement in the context of larger efforts by the UC system to create supportive and inclusive learning environments for students.   We look forward to working with UCSD as it implements the measures and programs called for in the agreement.”

“We salute UCSD for taking these steps and we hope the entire school community learns from this experience and works together to overcome ignorance and intolerance,” said Russlynn Ali, Assistant Secretary for the Education Department’s Office for Civil Rights.   “America is a country that has always celebrated its diversity.   Nowhere is that more important than in our classrooms and schools – at every level – from the earliest grades to our colleges and universities. The Department of Education and the Department of Justice will continue to work cooperatively with UCSD to ensure that all students are safe from harassment and discrimination.”

HILLARY RODHAM CLINTON ON SLAVERY AND HUMAN TRAFFICKING

FROM:  U.S. STATE DEPARTMENT
Press Statement Hillary Rodham Clinton
Secretary of State New Haven, Connecticut
April 13, 2012
Later this year, we will mark the 150th anniversary of the preliminary Emancipation Proclamation, and as we remember the sad history of slavery in the United States and honor those who fought to end it, we must also recommit ourselves to delivering on the promise of freedom. Because around the world today, 27 million people are living in modern slavery, or what we call trafficking in persons.

That’s why this Administration has made the effort to combat modern slavery a top priority. Here at home, agencies across government are working together to prosecute traffickers, and to bring needed assistance to survivors. Around the world, we are working with governments to improve their response to this crime, and we are supporting anti-trafficking programs in 37 countries with foreign assistance. Our annualTrafficking in Persons Report is the most comprehensive assessment of what governments are doing to stop this crime, and I’m glad you’ve had the chance to hear from Lou de Baca about everything the State Department is doing to move this struggle forward.

Now, when I was a law student in these same classrooms and hallways, I had the opportunity to learn from brilliant scholars and legal minds, and to study cutting-edge ideas about civil rights and children’s issues. So it doesn’t surprise me that that Yale Law School is again leading the way as we develop new innovations and practices to help us fight this horrible crime.

I hope this conference has been an opportunity for all of you to share ideas and build partnerships that will strengthen our efforts to combat modern slavery. Thank you all for your tireless work to stop this crime.

TAX PREPARATION BUSINESS OWNER AND FIVE ASSOCIATES INDICTED FOR TAX FRAUD

FROM:  U.S. DEPARTMENT OF JUSTICE
Wednesday, April 11, 2012
Alabama Tax Preparation Business Owner and Five Preparers Indicted for Tax Fraud Scheme
Four Charged with Identity Theft
Bruce King, the owner of a Montgomery, Ala., tax preparation business, and five tax preparers from Montgomery have been charged with conspiring to defraud the United States and aiding in the filing of false tax returns, the Justice Department and the Internal Revenue Service (IRS) announced today.  A federal grand jury in Montgomery returned an indictment on March 28, 2012, charging Bruce King, Jenika Williams, Antoinette Djonret, Nakesha Donaldson, Angela Smith and Vonecia Orum with participating in a scheme to file false tax returns.  Williams, Djonret, Donaldson and Smith have also been charged with wire fraud and aggravated identity theft.  The indictment was unsealed yesterday.

According to the indictment, from July 2007 to October 2010, King owned and operated Premier Tax, a tax preparation business in Montgomery along with four other locations in Alabama and Georgia.  King allegedly instructed his employees how to falsify federal income tax returns for the purpose of inflating claimed tax refunds.  Williams, Djonret, Donaldson, Smith and Orum then allegedly prepared false returns by reporting figures that they knew were not correct.

The indictment also alleges that Williams, Djonret, Donaldson and Smith used the names and Social Security numbers of individuals without their knowledge or consent.  Williams, Djonret, Donaldson and Smith allegedly used these names and Social Security numbers to report the individuals as dependents on a customer’s tax return when, in fact, the individuals were not the legitimate dependents of the customer.

An indictment merely alleges that crimes have been committed, and each defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, King, Williams, Djonret, Donaldson, Smith and Orum face a potential maximum of five years in federal prison for conspiring to defraud the United States and a potential maximum of three years for each count of aiding in the preparation of false tax returns.  Williams, Djonret, Donaldson and Smith also face a potential maximum of 20 years for each wire fraud count and a mandatory two-year sentence for the aggravated identity theft counts.  They all are also subject to fines and mandatory restitution if convicted.

JUSTICE SEIZES NEARLY $900,000 FROM ALLEGED ONLINE COUNTERFEIT APPAREL RETAILER

FROM:  DEPARTMENT OF JUSTICE
Tuesday, April 10, 2012
Department of Justice Seizes More Than $896,000 in Proceeds from the Online Sale of Counterfeit Sports Apparel
WASHINGTON – The Department of Justice has seized more than $896,000 in proceeds from the distribution of counterfeit sports apparel and jerseys as the result of an investigation into the sale of counterfeit goods on commercial websites, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; and John Morton, Director of the Department of Homeland Security’s Immigration and Customs Enforcement (ICE).

The investigation also resulted in the seizure of seven domain names engaged in the sale of counterfeit goods.  The funds were seized from interbank accounts and three PayPal accounts.  The seizure warrants were unsealed in U.S. District Court in the District of Columbia on April 5, 2012.

The investigation is a product of Operation In Our Sites, a law enforcement initiative targeting online commercial intellectual property crime announced by ICE’s Office of Homeland Security Investigations (HSI) in June 2010.  Operation In Our Sites targeted online retailers of a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel, sunglasses and DVD boxed sets.  To date, 758 domain names of websites engaged in the sale and distribution of counterfeit goods and illegal copyrighted works have been seized as a result of Operation In Our Sites.
According to court documents, investigation by federal law enforcement agents revealed that several subjects whose domain names had been seized in a November 2010 In Our Sites operation continued to sell counterfeit goods using new domain names.  In particular, the individuals, based in China, sold counterfeit professional and collegiate sports apparel, primarily counterfeit sports jerseys.  Law enforcement agents made numerous undercover purchases from the websites associated with the new domain names.  After the goods were confirmed to be counterfeit or infringing, seizure warrants for seven domain names used to sell the infringing goods were obtained from a U.S. Magistrate Judge in U.S. District Court for the District of Columbia.

According to court documents, the individuals conducted sales and processed payments for the counterfeit goods using PayPal Private Ltd. accounts and then wired their proceeds to bank accounts held at Chinese banks.  Under warrants issued by a U.S. District Judge, law enforcement agents seized $826,883 in proceeds that had been transferred from PayPal accounts to various bank accounts in China.  The funds were seized from correspondent, or interbank, accounts held by the Chinese banks in the United States.  Under additional seizure warrants issued by a U.S. Magistrate Judge, law enforcement agents also seized $69,504 in funds remaining in three PayPal accounts used by the subjects.

“We are working hard to protect American businesses and consumers from the damaging effects of intellectual property crime,” said Assistant Attorney General Breuer.  “This investigation disrupted an online counterfeit goods operation and also struck at the heart of the criminal enterprise by seizing hundreds of thousands of dollars in illegal profits.  The Justice Department, together with our partners at ICE, will continue to do all that we can to punish and deter the sale and distribution of counterfeit goods.”
“Those who traffic in counterfeit goods harm the American economy as well as the consumers who purchase the substandard merchandise,” said U.S. Attorney Machen.  “Seizing the domain names of these unscrupulous operators was one big step, and seizing their ill-gotten proceeds should send them another message that these counterfeit sales will not be tolerated.”

“Counterfeiting and intellectual property theft are seriously undermining U.S. business and innovation,” said ICE Director Morton.  “Consumers are at risk, American industry is harmed and U.S. jobs are lost.  As a country, we can ill afford the toll that intellectual property theft exacts on our economy and industries.  Operation In Our Sites and the related efforts of the National Intellectual Property Rights Coordination Center are critical to combating intellectual property crime and consumer fraud over the Internet.”
The investigation was conducted by the National Intellectual Property Rights Center and ICE-HSI.  The case is being prosecuted by Assistant U.S. Attorneys Jonathan Hooks and Diane Lucas and Special Assistant U.S. Attorney Katharine Wagner of the District of Columbia, Senior Trial Attorney Pamela Hicks of the Asset Forfeiture and Money Laundering Section in the Justice Department’s Criminal Division and Trial Attorney Thomas Dougherty of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.

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

WOMAN INDICTED FOR IDENTITY THEFT TO OBTAIN TAX REFUNDS

FROM DEPARTMENT OF JUSTICE
Thursday, April 5, 2012
Montgomery, Alabama, Woman Indicted for Using Stolen Identities and Debit Cards to Obtain Tax Refunds
A federal grand jury in Montgomery returned an indictment on March 28, 2012, charging Antoinette Djonret for using stolen identities to file false tax returns, the Justice Department, U.S. Attorney George L. Beck Jr. and the Internal Revenue Service (IRS) announced today.   The 19-count indictment, which was unsealed today following her arrest, charges Djonret with filing false claims, theft of government funds, access device fraud, aggravated identity theft and possession of unauthorized access devices.

Djonret had earlier been charged with making false claims in a criminal complaint that was filed on February 22, 2012.   According to the indictment and other court documents, Djonret used stolen identities to file false tax returns which fraudulently claimed refunds.   Djonret had some of the refunds deposited onto a prepaid debit card in her name.   Court documents state that nearly 650 tax returns were electronically filed from an IP address assigned to her residence.  According to the criminal complaint, on May 22, 2010, Djonret was arrested during a traffic stop and police officers seized from her car several prepaid debit cards in the names of other individuals.   The cards were linked to bank accounts that had received federal income tax refunds.

If convicted, she faces a maximum potential sentence of five years in prison for each false claims count and each theft of government funds count, 15 years in prison for the access device fraud count, 10 years in prison for the possession of unauthorized access devices count, and a mandatory two-year sentence for the aggravated identity theft counts.   She is also subject to fines and mandatory restitution if convicted.
 
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.    

The case was investigated by Special Agents of the IRS - Criminal Investigation.   Trial attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Jared Morris are prosecuting the case.

DRUG CARTEL LEADER GETS LIFE, ADMITS LINKS TO OVER 1,500 MURDERS

FROM DEPARTMENT OF JUSTICE
Thursday, April 5, 2012
Juarez Drug Cartel Leader Pleads Guilty to Charges Related to U.S. Consulate Murders and Is Sentenced to Life in Prison Defendant Admits to Directing or Participating in More Than 1,500 Murders since 2008

WASHINGTON – The Juarez Drug Cartel’s leader in Juarez and Chihuahua, Mexico, pleaded guilty today in El Paso, Texas, and was sentenced to life in prison for his participation in drug-trafficking and numerous acts of violence in connection with the Barrio Azteca gang, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Robert Pitman for the Western District of Texas, FBI Special Agent in Charge Mark Morgan of the FBI’s El Paso Office and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA).

Jose Antonio Acosta-Hernandez, 34, aka “Diego,” “Dienton,” “Diez” and “Bablazo,” of Chihuahua, was extradited to the United States from Mexico on March 16, 2012.  Today, he pleaded guilty to four counts of racketeering, narcotics trafficking and money laundering.  Acosta-Hernandez also pleaded guilty to seven counts of murder and weapons charges, which specifically related to the March 13, 2010, triple homicide in Juarez of U.S. Consulate employee Leslie Enriquez, her husband Arthur Redelfs and Jorge Salcido Ceniceros, the husband of another U.S. Consulate employee.  Immediately after the guilty plea hearing, Acosta-Hernandez was sentenced to seven concurrent life terms, three additional consecutive life terms and 20 years in federal prison by U.S. District Judge Kathleen Cardone of the Western District of Texas, El Paso Division.

Today’s action is the result of close coordination between U.S. law enforcement and the government of Mexico in the investigation and prosecution of this case.  The cooperation and assistance of the government of Mexico was essential to achieving the successful extradition, plea and sentencing of Acosta-Hernandez.  

“As the leader of La Linea’s enforcement wing, Mr. Acosta-Hernandez directed a reign of terror,” said Assistant Attorney General Breuer.  “Today’s guilty plea and sentence are a significant step in our effort to bring to justice those responsible for the consulate murders, and it would not have been possible without the extraordinary assistance of our law enforcement partners in Mexico, including Attorney General Marisela Morales Ibáñez.  We are determined to hold accountable those individuals who committed the consulate murders, and to dismantle the dangerous criminal enterprise that fueled these and many other tragic and senseless acts of violence.  Gangs and other criminal organizations that threaten public safety on both sides of the border are on notice that we are working more closely than ever with our Mexican counterparts to shut them down.”

“This plea represents the culmination of a virtual textbook example of cooperation among law enforcement agencies, both in the United States and in Mexico, to hold accountable those at the highest level of the drug trafficking trade,” said U.S. Attorney Pitman.  “We will continue to work together with our counterparts in Mexico to target those responsible for the heinous crimes associated with cartel activity.”

“This investigation exemplifies the FBI’s commitment and that of our federal, state, local and international partners to investigate and prosecute individuals and organized criminal organizations who commit violent acts and other crimes impacting the U.S. and our border area with the Republic of Mexico,” said Special Agent in Charge Morgan.  “The joint effort included the participation of USM Service, CBP, DEA, HSI, DOS, Texas DPS, El Paso Police, El Paso County Sheriff’s office and our Mexican partners.”
“Acosta-Hernandez is a cold blooded murderer with no respect for human life or the rule of law,” said DEA Administrator Leonhart.  “His violent and deadly actions were put to a stop due to the combined efforts of U.S. law enforcement, and the will of the Mexican government. Together, we will relentlessly continue our pressure on the Mexican cartels and gangs that carry out violence on both sides of the border.”

The third superseding indictment, returned on March 2, 2011, alleged that Acosta-Hernandez was an associate of the Barrio Azteca (BA), a violent street and prison gang that began in the late 1980s and expanded into a transnational criminal organization.  According to information presented in court, the BA formed an alliance with “La Linea,” which is part of the Juarez Drug Cartel and is also known as the Vincente Carrillo Fuentes Drug Cartel or “VCF.”  The purpose of the BA-La Linea alliance was to battle the Chapo Guzman Cartel and its allies for control of the drug trafficking routes through Juarez and Chihuahua.  The drug routes through Juarez, known as the Juarez Plaza, are important to drug trafficking organizations because they are a principal illicit drug trafficking conduit into the United States.  

Acosta-Hernandez admitted that in approximately 2008, he became the leader of La Linea’s armed enforcement wing and acted as the VCF’s plaza boss in Chihuahua and Juarez.  In this role, Acosta-Hernandez, in coordination with the BA, led violent attacks against their common enemies.  Acosta-Hernandez admitted that he directed or participated in more than 1,500 murders since 2008.

For example, Acosta-Hernandez admitted that on Jan. 30, 2010, he ordered hit-men in his organization to kill members of the opposition that were sighted at a daytime birthday party at a home in Juarez.  As part of this incident, 16 individuals were killed and 10 individuals were wounded at three different residences in Juarez.  On July 15, 2010, Acosta-Hernandez directed a car bombing in Juarez that ultimately killed four people.
       
Acosta-Hernandez admitted that his purpose for engaging in these violent attacks was, in part, to protect and enhance the La Linea-BA alliance’s importation of heroin, cocaine and marijuana into the Western District of Texas and elsewhere, and ultimately to make possible the distribution of those drugs in the United States.  Acosta-Hernandez admitted that he knew that the La Linea-BA alliance earned millions of dollars in drug trafficking profits each year.  He also knew that these profits were reinvested into the organization to purchase additional drugs to import into the United States and/or to purchase weapons, ammunition or supplies to continue fighting enemies of La Linea and the BA.

During the guilty plea hearing, Acosta-Hernandez also pleaded guilty to charges relating to the triple homicide of Enriquez, Redelfs and Salcido, based on his leadership position within La Linea and association with the BA.  According to information presented in court, on March 13, 2010, Enriquez, her husband Redelfs, and Salcido, the Mexican national husband of a second U.S. Consulate employee, were shot and killed by other BA members in Juarez in separate but related incidents.  According to information presented in court, on March 13, employees of the U.S. Consulate hosted a child’s birthday party in Juarez.  Salcido was shot and killed in his vehicle as he left the party.  His three children also were in the car and sustained minor injuries.  His wife, a Mexican national employee at the U.S. Consulate, was following Salcido in a separate vehicle and was unharmed in the attack.

At approximately the same time, U.S. citizens Enriquez and Redelfs left the same party and were shot and killed in their vehicle.  Enriquez was four months pregnant at the time of the shooting.  Enriquez’s and Redelfs’ nine-month-old daughter also was in the vehicle but was unharmed.
 
During the hearing, Acosta-Hernandez acknowledged that Salcido, Enriquez and Redelfs were murdered by members and associates of the BA to further the gang’s racketeering activities.  Acosta-Hernandez admitted that at the time, under his leadership as VCF’s plaza boss and coordinator of enforcement actions with the BA in Juarez, La Linea and the BA had agreed to unite and commit murders to further their criminal enterprise.
A total of 35 defendants were charged in the third superseding indictment and are alleged to have committed various criminal acts, including racketeering, narcotics distribution and importation, retaliation against persons providing information to U.S. law enforcement, extortion, money laundering, obstruction of justice and murder, including the 2010 Juarez consulate murders.  Of the 35 defendants charged, 32 have been apprehended; 23 of those defendants have pleaded guilty, while seven others are pending extradition from Mexico.  U.S. and Mexican law enforcement are actively seeking to apprehend the three remaining fugitives in this case, including Eduardo Ravelo, an FBI Top Ten Most Wanted Fugitive.  Trial against Ramon Renteria, aka “Spooky,” is scheduled to begin in El Paso on May 18, 2012.

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

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

SHOOTER NEAR ELEMENTARY SCHOOL APPREHENDED

FROM U.S. MARSHALS SERVICE
April 04, 2012
Suspect in Gun Battle Outside of School Arrested
Stockton, CA – U.S. Marshal Albert Najera of the Eastern District of California announced today that the U.S. Marshals Service arrested 20 year old Angelo Estrada in Stockton, California. Estrada was wanted for assault with a deadly weapon in Stockton.

On February 7th 2012, Stockton P.D. was dispatched to the area of Van Buren St. and Harding Way to investigate a report of a shooting outside two schools. A gun battle broke out across the street from the El Dorado Elementary School and the Stockton School for Adults, when one car pulled up to a parked SUV. A confrontation ensued in which multiple shots were fired and one of the men was shot. Casings were found near Van Buren St. and Harding Way. Also a nearby office and vehicle were hit by gunfire. Two schools were put on lockdown while police searched for suspects.

A Task Force Officer (TFO) from the Stockton Police Department got a lead that Estrada was staying at multiple residences in the Stockton area. While Investigators from the Pacific Southwest Regional Fugitive Task Force (PSWRFTF) were conducting

surveillance on these residences Estrada was seen leaving an apartment complex in the 300 block of Northbank Circle. Task Force members moved in and arrested Estrada without incident. Estrada was found to be in possession of a firearm, cocaine, and a large amount of cash. A bulletproof vest was also found during a search of the residence. Estrada was booked into the San Joaquin County Jail.

THREE MEN CONVICETED OF BEING SECURITY GUARDS DURING DRUG TRANSACTIONS

FROM DEPARTMENT OF JUSTICE WEBSITE
Tuesday, April 3, 2012
Three Men Convicted in Puerto Rico for Roles in Providing Armed Security for Drug Transactions

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

Wendell Rivera Ruperto, 37, was convicted of five counts of conspiracy to possess with intent to distribute more than five kilograms of cocaine, five counts of attempting to possess with the intent to distribute more than five kilograms of cocaine and five counts of possession of a firearm in furtherance of a drug transaction.

Bernis Gonzalez Miranda, 27, a former Puerto Rico Department of Corrections officer, was convicted of three counts of conspiracy to possess with intent to distribute more than five kilograms of cocaine, three counts of attempting to possess with the intent to distribute more than five kilograms of cocaine and three counts of possession of a firearm in furtherance of a drug transaction.

Jose M. Nieves-Velez, 39, was convicted of one count each of conspiracy to possess with intent to distribute more than five kilograms of cocaine, attempting to possess with the intent to distribute more than five kilograms of cocaine and possession of a firearm in furtherance of a drug transaction.

Rivera Ruperto, Gonzalez Miranda and Nieves-Velez were charged in a superseding indictment returned on Oct. 28, 2010, along with 88 law enforcement officers in Puerto Rico and 42 other individuals, as part of the FBI undercover operation known as Guard Shack.

According to the evidence presented in court, Rivera Ruperto provided security for what he believed were illegal cocaine deals on five separate occasions (April 14, April 27, June 9, June 25, and Sept. 16, 2010); Gonzalez Miranda on three separate occasions (June 15, July 2, and July 7, 2010); and Nieves-Velez on one occasion (July 7, 2010).  In fact, the purported drug transactions were part of the undercover FBI operation.  According to information presented at trial, the three men acted as security guards for what they believed were multi-kilogram cocaine deals by frisking the buyer, providing armed protection for the deal and escorting the buyer in and out of the transaction.  Information presented at trial also showed that Rivera Ruperto and Gonzalez Miranda recruited other individuals, including law enforcement officers, to participate in the transactions.
One of those officers, Jose Bermudez Quinones, a Puerto Rico Department of Corrections officer recruited by Gonzalez Miranda, pleaded guilty on Feb. 2, 2012, to attempting to possess with intent to distribute cocaine, and possessing a firearm in furtherance of a drug trafficking crime.  He is scheduled to be sentenced on June 15, 2012.

In return for the security they provided, Rivera Ruperto, Gonzalez Miranda and Nieves-Velez received cash payments of $2,000 for each transaction, and in one instance, Rivera Ruperto received $3,000.

U.S. District Judge Juan Pérez-Giménez scheduled sentencing for Aug. 10, 2012.  At sentencing, Rivera Ruperto faces a mandatory minimum sentence of 115 years in prison and a maximum penalty of life in prison; Gonzalez Miranda faces a mandatory minimum of 65 years and a maximum penalty of life in prison; and Nieves-Velez faces a mandatory minimum of 15 years and a maximum penalty of life in prison.

The case was prosecuted by Trial Attorneys Kevin Driscoll and Monique Abrishami of the Criminal Division’s Public Integrity Section.  The case was investigated by the FBI.  The Bureau of Alcohol, Tobacco, Firearms and Explosives also provided assistance in this case.  The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.

MEMPHIS MAN FOUND GUILTY OF CHILD TRAFFICKING AND FIREARMS OFFENCES

FROM:  DEPARTMENT OF JUSTICE
Friday, April 6, 2012
Memphis Man Found Guilty of Child Sex Trafficking and Firearms Offenses
WASHINGTON- A federal jury in Memphis, Tenn., has convicted Maurice Mabon of child sex trafficking and a firearms offense, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Edward L. Stanton III for the Western District of Tennessee and Special Agent in Charge Aaron T. Ford of the FBI’s Memphis Field Office.

Mabon, 23, of Memphis, was found guilty yesterday of child sex trafficking, attempted child sex trafficking and conspiracy to commit child sex trafficking for his role in advertising a 15-year-old girl for prostitution on the website backpage.com on April 16, 2011.  He also was found guilty of being a felon in possession of ammunition.

The evidence at trial showed, among other things, that Mabon posted the advertisement to backpage.com after taking numerous photographs of the 15-year-old victim in lingerie.  Mabon and his co-defendants then drove the 15-year-old to an address provided by an individual responding to the advertisement.  A suspicious neighbor contacted the Shelby County, Tenn., Sheriff’s Department and deputies intervened.

A later search of Mabon’s home led to the discovery of 12 live rounds of 9 mm Luger ammunition, 17 live rounds of 7.65 ammunition, 25 live rounds of .380 ammunition, 20 live rounds of .45 auto ammunition and eight spent rounds of 7.62 ammunition.  As a previously-convicted felon, Mabon was prohibited from possessing any ammunition by federal law.

“Mr. Mabon used the Internet to facilitate sex trafficking of a minor,” said Assistant Attorney General Breuer.  “The jury’s guilty verdict ensures that he will now be imprisoned for his crimes.  We will continue to prioritize the fight against predators who exploit children for profit or any other reason.”

“Child sex traffickers like Maurice Mabon prey upon young victims because they are vulnerable and often defenseless,” said U.S. Attorney Stanton.  “The jury’s guilty verdict underscores this office’s relentless commitment to working with our law enforcement partners to prosecute and bring to justice those who exploit children for profit.”

“The cruel exploitation of children will not be tolerated, and the FBI, along with our law enforcement partners, is committed to targeting those who prey on innocent juveniles,” said FBI Special Agent in Charge Ford.  “This conviction is a message to those who would seek to take part in human trafficking or commercial sex trafficking, that you will be investigated brought to justice and held accountable.

Mabon faces a mandatory minimum sentence of 10 years in prison and faces a maximum penalty of life in prison.  He will be sentenced on July 13, 2012, by Chief U.S. District Judge Jon Phipps McCalla.  Mabon’s co-defendants, Arieke Lester and Chauntta Lewis, pleaded guilty to related charges last week.  Lester will be sentenced on Aug. 10, 2012, and faces up to life in prison.  Lewis will be sentenced on June 6, 2012, and faces up to 20 years in prison.

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

The case was investigated by the FBI, working with the Shelby County Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  The case was prosecuted by Assistant U.S. Attorney Jonathan Skrmetti of the Western District of Tennessee and CEOS Trial Attorney Keith Becker.

HSS SECRETARY SPEAKS ABOUT MEDICARE FRAUD

FROM:  DEPARTMENT OF HEALTH AND HUMAN SERVICE
SECRETARY KATHLEEN SEBELIUS
Chicago Fraud Prevention Summit
April 4, 2012
Chicago, IL
Thank you.
As you know, the work we’re doing together here today – sharing best practices and developing new strategies – is part of a national conversation that began in January 2010 at the first Health Care Fraud Prevention Summit and has continued across the nation.
It was President Obama who asked us to come together. When he came into office, we were, frankly, falling behind. Scams were getting bigger and more sophisticated. Criminals were being more creative and going after larger sums. They were evolving, and we needed to catch up.

So over the last three years that is exactly what we’ve done.
Attorney General Holder just spoke about law enforcement’s strong commitment to stamping out fraud. More boots on the ground has meant more criminals locked up, more schemes taken down, and a stronger health care system for the rest of us.
But we're not just prosecuting fraud. We're also taking steps to prevent it.
In the past, nearly anyone could fill out a form and become a Medicare provider. In a matter of weeks, criminals could set up false clinics, enlist willing accomplices and vulnerable seniors to submit false claims and begin collecting payments. For industrious criminals, this approach was a ripe target.
But that‘s no longer the case. Over the last three years we have made our health care system dramatically less appealing to those who once had thought of stealing from Medicare and Medicaid as easy money.
Today, I want describe how this transformation took place.
To begin, it’s now a lot more difficult for bad actors to get their foot in the door.
Today, before you can become a Medicare provider, you have to go through a rigorous third-party review process that will make sure you meet all the requirements to bill Medicare.
We have a comprehensive database that allows us to systematically screen all current and prospective providers against other key sources like provider licensing and criminal records. If you get banned from one Medicaid program or Medicare, you get banned from all Medicaid programs.

And if a doctor retires, dies, or becomes ineligible, we know about it and can remove his information from our system. In the past, out-of-date and invalid provider numbers would remain on the rolls -- like a forgotten backdoor entrance allowing criminals to sneak in and start billing bogus claims. But no longer.

I am proud to announce today that we have already removed 3,000 ineligible providers from the Medicare program identified in just the first month of these new screening procedures.

But that’s just our first line of defense. We’re also working to make sure that even if criminals do find their way into the system, it’s a lot harder to get away with taxpayer dollars.
In the past, government was often two or three steps behind perpetrators, quickly paying out nearly every properly submitted claim -- then later trying to track down the bad guys after we got a tip. That meant we were often showing up after criminals had already skipped town, taking all of their fraudulent billings with them.
But new data analysis tools allow us to analyze claims in real time, taking away criminals’ head start. Instead of the old ‘pay-and-chase’ model, we’re getting proactive by using a technology similar to the one credit card companies use to identify and stop suspicious payments before they go out. So now, just as Visa can put your card on hold when it is used to buy ten flat screen TVs, we have the ability to freeze questionable payments until we can investigate.

Since this system was put in place, we have stopped, prevented, or identified $30 million in payments that should never have been made. And because the system is designed to get smarter over time, it’s only going to be more effective in the future.
We’re also making it easier for law enforcement officials from the FBI, the Inspector General Office’s and local jurisdictions to share data and access claims information as soon as they are submitted to Medicare.

Under the old system, it was as if police officers in one town weren’t talking to the officers in the next town. Now, we’re all beginning to plug into the same system in real time, so we can respond with the same speed and agility as the criminals.
This new fraud prevention system has changed the equation for any criminal. But we also know that neither law enforcement, nor federal officials are going to stop fraud alone. And no law or technology is as effective at preventing fraud as consumers who are educated and informed.

So with the support of partner organizations across the country, thousands of Senior Medicare Patrol volunteers are giving their friends and neighbors the tools to recognize, resist, and report fraud.

Millions of beneficiaries have taken advantage of the program’s one-on-one or group counseling sessions and over 25 million people have received fraud prevention information through SMP community outreach events.
And it’s clear that this kind of outreach pays off.
In 2010, a home health agency set up an office in the lobby of a Chicago-area affordable senior housing building and offered free blood pressure checks. In the process, they collected seniors’ Medicare numbers.

One of those seniors later noticed something wasn’t right when she reviewed her Medicare Summary Notice. The home health agency had billed Medicare for more than $1,400 in skilled nursing services that she believed she never received. So she contacted the Illinois SMP and they helped her file a complaint.

The complaint triggered an investigation. And the investigation uncovered far more than a single isolated incident, leading Medicare to recoup more than $62,000 in inappropriate payments. Just as importantly, it ended a scheme that, if allowed to continue, could have drained thousands if not millions more from Medicare’s coffers.

And it all started with one cautious citizen who – thanks to the outreach and education of the local Senior Medicare Patrol -- knew to speak up when something wasn’t right.
From 2010 to 2011 the number of calls to the Illinois SMP rose 64 percent and the trend has continued into 2012. And as these numbers increase, the good news is that more and more of them are coming from seniors who are already putting into practice what they have learned from their neighbors, a local presentation, or ‘Fraud Alert’ emails. When someone calls on the phone or knocks on the door asking for their Medicare number, they know to refuse, and then to report it immediately.
This also serves to remind us that no one group, agency, or business owns all of the resources or expertise we need to keep criminals out of our health care system.
Because we all have a stake in preventing health care fraud, we’re all doing our part.
For someone thinking about committing fraud, this means the health care landscape looks a lot less friendly today:

It’s harder than ever to get into the system as a bad actor. Get in and it’s harder still to submit a fraudulent claim. Find a way to submit a claim and you are more likely to get caught. And when you get caught, you’re going to face a tougher punishment.
There is no responsibility that this Administration takes more seriously than safeguarding taxpayer dollars. I am proud of how far we have come. And I look forward to working with all of you in the days and months ahead to build on that progress and protect our health care system for this generation and the next.

MAN FLEES DURING MURDER TRIAL IS CAPTURED WITH GUN AND DRUGS

FROM U.S MARSHALS SERVICE
Fugitive who fled During Murder Trial Captured with Stolen Gun and Drugs by U.S
Loxley, AL – A Pensacola man who never returned from a break during the jury deliberations of which he was on trial for murder, was apprehended last night by the combined effort of U.S. Marshals from Mobile, AL and Pensacola, FL. Task Force members from the Gulf Coast and Florida Regional Fugitive Task Forces arrested Ortavious Devon Wilson at the Loxley Motel at about 7 p.m. last night. The 33 year old Wilson was arrested outside of a room he rented without incident. However, a search of the room revealed a 9mm handgun that was reportedly stolen from Escambia County, FL last year, as well as substances that appeared to be crack cocaine and marijuana and drug paraphernalia indicative of dealing and selling drugs. U.S. Marshals from Pensacola and Mobile as well as Task Force Officers from the Florida State Attorney’s Office, Baldwin County Sheriff’s Office, Monroeville Police Department and the Alabama Department of Corrections also assisted. At the time of his arrest, Wilson had the gun’s magazine in his pocket and which was loaded with three bullets in it. Wilson is not currently facing any local charges in Alabama but stands to face charges from the United States Attorney’s Office in Mobile as well as The Bureau of Alcohol, Tobacco and Firearms and Escambia County Sheriff’s Office in Florida

HOME HEALTH CARE MEDICARE FRAUDSTERS PLEAD GUILTY

FROM:  DEPARTMENT OF JUSTICE
Monday, April 2, 2012
Two Owners and Two Employees of Miami Home Health Company Plead Guilty in $20 Million Health Care Fraud Scheme
WASHINGTON – Two owners and two employees of a Miami home health care agency pleaded guilty for their participation in a $20 million Medicare fraud scheme involving false billings for home health care services, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).

Ariel Rodriguez, 41, Reynaldo Navarro, 37, and Ysel Salado, 26, each pleaded guilty today before U.S. District Judge Marcia G. Cooke to one count of conspiracy to commit health care fraud, and Melissa Rodriguez, 24, pleaded guilty on March 28, 2012, before Judge Cooke to the same charge.
           
According to court documents, Ariel Rodriguez and Reynaldo Navarro were the owners of Serendipity Home Health Inc., a Florida home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries.  Melissa Rodriguez and Ysel Salado were employees at Serendipity Home Health.

According to plea documents, Ariel Rodriguez, Navarro and their co-conspirators paid kickbacks and bribes to patient recruiters.  In return, the recruiters provided patients to Serendipity, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services.  Ariel Rodriguez and Navarro used the prescriptions, POCs and medical certifications to fraudulently bill the Medicare program, which Ariel Rodriguez and Navarro knew was in violation of federal criminal laws.
Melissa Rodriguez and Salado admitted that they cashed checks from Serendipity and provided the cash to Ariel Rodriguez and Navarro to use for the kickback payments.
According to plea documents, Serendipity nurses and office staff falsified patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services.  In fact, the beneficiaries did not actually qualify for and did not receive such services.  Ariel Rodriguez and Navarro admitted that they knew files were falsified so that Medicare could be billed for medically unnecessary services.
From approximately April 2007 through March 2009, Ariel Rodriguez, Navarro and their co-conspirators submitted approximately $20 million in false and fraudulent claims to Medicare.  Medicare paid approximately $14 million on those claims.

The pleas were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.

This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.  The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
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 $3.6 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.

FORMER OFFICE MANAGER OF SENATOR EDWARD KENNEDY GOES TO PRISON FOR GOVERNMENT THEFT

The following excerpt is from the Department of Justice website:
Friday, March 30, 2012
Former Senate Office Manager Sentenced to 20 Months in Prison for Wire Fraud and Theft of Government Property
WASHINGTON – A former office manager in the U.S. Senate was sentenced today to 20 months in prison for wire fraud and theft of government property, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.

Ngozi Pole, of Waldorf, Md., also was sentenced by U.S. District Judge Emmet G. Sullivan in the District of Columbia to serve three years of supervised release and 500 hours of community service following his prison term and ordered to pay $77,608.86 in restitution.  Pole was found guilty at trial on Feb. 1, 2011, of five counts of wire fraud and one count of theft of government property.

According to evidence presented at trial, beginning in at least 2003 and continuing until January 2007, Pole repeatedly submitted paperwork causing the Senate to pay him larger bonus payments than had been approved by either the chief of staff or former U.S. Senator Edward M. Kennedy.  According to the evidence presented at trial, these unauthorized bonus payments totaled more than $75,000.  Pole hid the existence of these unauthorized payments by repeatedly transmitting information to the chief of staff that falsely showed that he received only those payments that had been authorized.  

This sentencing was handled by Trial Attorney Tracee Plowell of the Criminal Division’s Public Integrity Section.  The case was investigated by the FBI’s Washington Field Office.   Former Senator Kennedy’s office cooperated fully with the investigation.

MAN WHO LOBBIED FOR PAKISTAN GETS 24 MONTHS IN PRISON

The following excerpt is from the Department of Justice website:
Friday, March 30, 2012
Virginia Man Sentenced to 24 Months for Scheme to Conceal Pakistan Government Funding for His U.S. Lobbying Efforts

WASHINGTON – Syed Ghulam Nabi Fai, 62, a U.S. citizen and resident of Fairfax, Va., was sentenced today to 24 months in prison, followed by three years of supervised release, for conspiracy and tax violations in connection with a decades-long scheme to conceal the transfer of at least $3.5 million from the government of Pakistan to fund his lobbying efforts in America related to Kashmir.

The sentencing was announced by Neil MacBride, U.S. Attorney for the Eastern District of Virginia; Lisa Monaco, Assistant Attorney General for National Security; John DiCicco, Acting Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division; James McJunkin, Assistant Director in Charge of the FBI Washington Field Office; and Eric Hylton, Special Agent in Charge of the Internal Revenue Service (IRS) Criminal Investigation’s Washington, D.C., Field Office, after sentencing by U.S. District Court Judge Liam O’Grady in the Eastern District of Virginia.

On Dec. 7, 2011, Fai pleaded guilty to a two-count criminal information.  Count one of the information charged Fai with conspiracy to: 1) falsify, conceal and cover up material facts he had a duty to disclose in matters within the jurisdiction of executive branch agencies of the U.S. government; and to 2) defraud the Treasury Department by impeding the lawful functions of the IRS in the collection of revenue.  Count two of the information charged Fai with endeavoring to impede the administration of tax laws.

According to court documents filed with his plea agreement, Fai served as the director of the Kashmiri American Council (KAC), a non-governmental organization in Washington, D.C., that held itself out to be run by Kashmiris, financed by Americans, and dedicated to raising the level of knowledge in the United States about the struggle of the Kashmiri people for self-determination.  But according to court documents, the KAC was secretly funded by officials employed by the government of Pakistan, including the Inter-Services Intelligence Directorate (ISI).

 “Mr. Fai spent 20 years operating the Kashmiri American Council as a front for Pakistani intelligence,” said U.S. Attorney MacBride.  “He lied to the Justice Department, the IRS and many political leaders throughout the United States as he pushed the ISI’s propaganda on Kashmir.”

“Syed Fai is today being held accountable for his role in a decades-long scheme to conceal the fact that the government of Pakistan was secretly funding his efforts to influence U.S. policy on Kashmir,” said Assistant Attorney General Monaco.
“Today’s sentence sends a strong message that using the tax-exempt status of charitable entities to promote or conceal federal crimes carries heavy consequences,” said Acting Principal Deputy Assistant Attorney General DiCiccio.

“Mr. Fai had a duty to inform the U.S. government of the finances which he received from Pakistan to fund lobbying efforts,” said FBI Assistant Director in Charge McJunkin.  “Concealed foreign affiliations can be a significant threat to our democracy, and those who engage in hiding these associations will be brought to justice.”

“Today’s sentencing further shows that IRS-Criminal Investigation is working vigorously to stop the misuse and abuse of charities in promoting or concealing federal crimes,” said IRS Special Agent in Charge Hylton.  “The message is clear that those who engage in this type of activity will face stiff criminal penalties.”
The Scheme

Fai admitted in court that, from 1990 until about July 18, 2011, he conspired with others to obtain money from officials employed by the government of Pakistan, including the ISI, for the operation of the KAC in the United States, and that he did so outside the knowledge of the U.S. government and without attracting the attention of law enforcement and regulatory authorities.

To prevent the Justice Department, FBI, Department of Treasury and the IRS from learning the source of the money he received from officials employed by the government of Pakistan and the ISI, Fai made a series of false statements and representations, according to court documents.  For example, Fai told FBI agents in March 2007 that he had never met anyone who identified himself as being affiliated with the ISI and, in May 2009, he falsely denied to the IRS on a tax return for the KAC that the KAC had received any money from foreign sources in 2008.

In addition, according to court documents, Fai sent a letter in April 2010 to the Justice Department falsely asserting that the KAC was not funded by the government of Pakistan.  Later that year, Fai falsely denied to the IRS that the KAC had received any money from foreign sources in 2009.  In July 2011, Fai falsely denied to FBI agents that he or the KAC received money from the ISI or government of Pakistan.

In fact, Fai repeatedly submitted annual KAC strategy reports and budgetary requirements to Pakistani government officials for approval.  For instance, in 2009, Fai sent the ISI a document entitled “Plan of Action of KAC / Kashmir Centre, Washington, D.C., for the Fiscal Year 2010,” which itemized KAC’s 2010 budget request of $658,000 and listed Fai’s plans to secure U.S. congressional support for U.S. action in support of Kashmiri self-determination.

Fai also admitted that, from 1990 until about July 18, 2011, he corruptly endeavored to obstruct and impede the due administration of the internal revenue laws by arranging for the transfer of at least $3.5 million to the KAC from employees of the government of Pakistan and the ISI.

According to court documents, Fai accepted the transfer of such money to the KAC from the ISI and the government of Pakistan through his co-defendant Zaheer Ahmad and middlemen (straw donors), who received reimbursement from Ahmad for their purported “donations” to the KAC.  Fai provided letters from the KAC to the straw donors documenting that their purported “donations” to the KAC were tax deductible and encouraged these donors to deduct the transfers as “charitable” deductions on their personal tax returns.  Fai concealed from the IRS that the straw donors’ purported KAC “donations” were reimbursed by Ahmad, using funds received from officials employed by the ISI and the government of Pakistan.