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Wednesday, April 30, 2014



FTC Mails Refund Checks to Consumers Allegedly Defrauded by Telemarketers Who Charged a Fee, Promising to Help Lower Their Credit Card Interest Rates
An administrator working for the Federal Trade Commission today began mailing refund checks to more than 4,800 consumers allegedly defrauded by National Card Monitor, LLC, a telemarketing operation that promised to substantially lower consumers’ credit card interest rates for an advance fee.

In July 2013, National settled an FTC complaint, agreeing to provide the FTC with lists of consumer victims and to have their assets frozen by the court. Based on the money recovered, a refund check for $25.13 will be mailed to defrauded consumers. The checks must be cashed within 60 days of when they are issued.

Tuesday, April 29, 2014


Thursday, April 24, 2014

U.S. Seeks to 
Recover Over $700,000 in Kleptocracy Proceeds of Former South Korean President Chun Doo-hwan

The Department of Justice filed a civil forfeiture complaint in the U.S. District Court for the Central District of California seeking to recover more than $700,000 in alleged corruption proceeds of Chun Doo-hwan, the former president of the Republic of Korea.

These monies were seized in February 2014 from the sale of a house located in Newport Beach, Calif., which President Chun’s son, Chun Jae Yong, had purchased in 2005 with proceeds allegedly traceable to his father’s corruption.   The United States is working with the Republic of Korea’s Supreme Prosecutor’s Office, the Ministry of Justice and the Seoul Central District Prosecutor’s Office to forfeit these corruption proceeds.

The announcement was made by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Division and Assistant Director John G. Connolly of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Office of International Affairs.

“While serving as Korea’s president, Chun Doo-hwan betrayed the Korean people by taking over $200 million in bribes, some of which his family members then illegally laundered into the United States,” said Acting Assistant Attorney General O’Neil.   “Through the department’s Kleptocracy Initiative, we are making crystal clear that the United States will not tolerate the use of its financial system by corrupt foreign officials – or their relatives – to harbor their ill-gotten gains.”

“The U.S. will not be a safe repository for assets misappropriated by corrupt foreign leaders,” said FBI Assistant Director in Charge Lewis.  “The FBI is committed to working with foreign and domestic partners to identify and return those assets to the legitimate owners, in this case the people of the Republic of Korea.”

“This most recent seizure is part of an ongoing effort by HSI to identify and seize illegal assets in the United States obtained by corrupt foreign leaders who use our country as a safe haven to conceal the illicit proceeds of their crimes,” said HSI Assistant Director Connolly.   “HSI special agents in our 67 offices in 48 countries will continue to work with our domestic offices as well as international law enforcement partners to hold these individuals accountable by denying them the enjoyment of their ill-gotten gains.”

As alleged in the forfeiture complaint, President Chun was convicted in Korea in 1997 of receiving more than $200 million in bribes from Korean businesses and companies.   President Chun and his relatives laundered some of these corruption proceeds through a web of nominees and shell companies in both Korea and the United States.

Through close cooperation between U.S. and Korean law enforcement and prosecution authorities, the $721,951 sought for forfeiture was identified and seized when President Chun’s relatives sold a home in Newport Beach that previously had been purchased with the laundered proceeds of President Chun’s corruption.

This case was brought under the Kleptocracy Asset Recovery Initiative by a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, return those proceeds to benefit the people harmed by these acts of corruption and abuse of office.  Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to .

The investigation was conducted jointly by the FBI’s Kleptocracy Program of the International Corruption Unit within the Criminal Investigation Division and the West Covina Resident Agency of the Los Angeles Division and HSI Attaché Seoul, with assistance from HSI Miami.   The case is being prosecuted by Trial Attorney Woo S. Lee of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with substantial support from the Criminal Division’s Office of International Affairs.        

Sunday, April 27, 2014


Tuesday, April 22, 2014
Federal Court Bars New York Man from Promoting Alleged Tax Scheme
Accountant Allegedly Marketed Benefit Plans That Unlawfully Increased Tax Deductions and Avoided Income Taxes

A federal court has permanently barred Ramesh Sarva, a certified public accountant in Little Neck, N.Y., from promoting and selling an alleged nationwide tax scheme, the Justice Department announced today.  Judge Josephine L. Staton of the U.S. District Court for the Central District of California entered the permanent injunction order yesterday, to which Sarva consented.

According to the complaint, welfare benefit plans permit companies to pool together and make monetary contributions toward the purchase of life insurance for the benefit of each company’s employees or principals.  Participants in legitimate welfare benefit plans may be able to deduct the full amount of their plan contributions as a business expense.  The complaint alleged that Sarva falsely informed his customers that the welfare benefit plans he promoted were legal, but in fact, Sarva has been promoting plans that illegally permitted his customers to both claim substantial tax deductions for their plan contributions and later access the full cash value of their plan contributions by taking out loans against the life insurance policies purchased.  The complaint alleged that Sarva’s promotion of these unlawful welfare benefit plans deprived the U.S. Treasury of significant amounts of tax and subjected his customers to audits and IRS scrutiny.

The injunction order bars Sarva from promoting and selling any purported welfare benefit plans.  The court also ordered Sarva to provide the United States with a list of his customers and to send copies of the injunction order to his customers.

In the past decade, the Justice Department’s Tax Division has obtained more than 500  injunctions to stop tax fraud promoters and tax return preparers.  Information about these cases is available on the Justice Department website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Saturday, April 26, 2014


Friday, April 25, 2014
Alabama Man Sentenced for Tax Fraud and Identity Theft

Nakia Jackson, of Montgomery, Alabama, was sentenced to serve 87 months in prison today for conspiring to defraud the United States and one count of aggravated identity theft for his role in a stolen identity refund fraud scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division, U.S. Attorney George L. Beck Jr. for the Middle District of Alabama and the Internal Revenue Service (IRS).

According to court documents, between January 2009 and March 2011, Jackson obtained stolen identities from an Alabama state employee and used those identities to file false tax returns.  Jackson recruited a bank employee, LaQuanta Clayton, to assist him in depositing the false income tax refunds into various bank accounts.  He obtained permission from several individuals to use their bank accounts to receive false refunds and when a false refund was deposited, Jackson would direct the individuals to withdraw the money and give the money to him.  In total, Jackson filed over 100 false tax returns and requested over $400,000 in refunds.

In addition, Jackson was ordered to serve three years of supervised release and pay $212,856 in restitution.

IRS-Criminal Investigation agents investigated this case and Trial Attorneys Charles M. Edgar Jr. and Michael Boteler for the Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.

Friday, April 25, 2014


Monday, April 14, 2014

Utah Man Charged with Federal Hate Crime for Threatening Interracial Family
The Department of Justice announced that an information was filed charging Robert Keller, 70, with interfering with the housing rights of three members of an interracial family because of the family members’ races and because the family members were living in Hurricane, Utah.
Keller has been charged with two counts of criminal interference with a right to fair housing.  More specifically, the information alleges that Keller wrote a note to two Caucasian family members of an interracial family threatening to kill them if they did not make their African-American family member leave their home and the community.  The first count alleges that  Keller’s threats interfered with the housing rights of the Caucasian residents to associate in their home with their African-American family member, and the second count alleges that Keller’s threats interfered with the African-American resident’s right to occupy the home.
If convicted, Keller faces a statutory maximum penalty of one year in prison on each count.

This case is being investigated by the Salt Lake City Division of the FBI in cooperation with the Hurricane City Police Department.  It is being prosecuted by Trial Attorney Saeed Mody of the Civil Rights Division and Assistant U.S. Attorney Carlos Esqueda for the District of Utah.

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

Wednesday, April 23, 2014


Friday, April 4, 2014

North Carolina Paving Contractor Sentenced to Prison for Tax and Bank Fraud
Tommy Edward Clack was sentenced today to serve 66 months in federal prison for tax and fraud crimes by U.S. District Judge Thomas D. Schroeder in Winston-Salem, N.C., the Justice Department and Internal Revenue Service (IRS) announced.  Clack was also ordered to pay $1,350,597 in restitution to the IRS and $20,945 in restitution to a bank he defrauded, and to serve five years of supervised release.  Clack previously pleaded guilty to one count of willfully filing a false federal income tax return for 2007 and one count of knowingly making a false statement to a federally insured bank in order to obtain a mortgage loan.

According to court documents, for approximately the past 10 years, Clack has been a traveling, self-employed paving contractor doing business in North Carolina, South Carolina, Maryland and Florida.  Clack operated under several different business names and changed the names frequently in order to avoid scrutiny by state and federal law enforcement agencies.  Over the years, Clack was charged with and convicted of multiple state criminal violations in Maryland, North Carolina, South Carolina and Florida as a result of his business practices.  Since June 2010, Clack has been under an injunction banning him from operating as a driveway paving contractor in North Carolina.  He is also subject to a cease-and-desist order in Maryland that bans him from various fraudulent practices.

According to court documents, Clack significantly underreported the income from his paving business on his tax returns.  From 2004 to 2007, Clack earned gross income of over $5.7 million, but reported only a fraction of it to the IRS.  In 2004, Clack underreported his income by approximately $294,829.  In 2005, he underreported his income by approximately $1,178,822.  In 2006, Clack underreported his income by approximately $1,868,556.  And in 2007, Clack underreported his income by $2,428,710.  Clack’s returns were prepared by a professional accountant, but Clack knowingly provided her with false information on which to base his returns, and he signed his returns knowing that they significantly understated his income.  Altogether, as a result of these false returns Clack underpaid his taxes by $1,350,597 for the 2004 through 2007 tax years.

According to court documents, Clack employed a number of strategies to conceal his tax fraud.  In addition to constantly changing the name of his paving company, Clack did not maintain books and records.  He also dealt extensively in cash, paid his employees in cash, and structured currency transactions with his bank in amounts designed to evade the bank’s requirement to file Currency Transaction Reports with the U.S. Treasury.

Court documents also state that in December 2003, Clack submitted a mortgage loan application in the name of his then-wife to a bank in Greensboro, N.C.  The application sought a $640,000 loan as financing for the purchase of a $1.2 million home.  As part of the loan application, Clack provided the bank with a tax return in his wife’s name for the year 2002 that claimed married filing separate status, reported adjusted gross income of $372,748 and claimed total tax liability of $127,745.  Clack claimed that this tax return had been filed with the IRS, when in fact Clack and his then-wife had filed a joint federal income tax return for 2002 that claimed that the couple had adjusted gross income of $17,656 and a total tax liability of $2,685.  The bank would not have approved the loan if they knew about the discrepancy.  Clack ultimately defaulted on the loan and the bank suffered a loss after foreclosing on the collateral.

The case was investigated by the IRS-Criminal Investigation, with assistance from the North Carolina State Bureau of Investigation.  It was prosecuted by Trial Attorney Jonathan Marx of the Tax Division with assistance from the U.S. Attorney’s Office for the Middle District of North Carolina.

Monday, April 21, 2014


Tuesday, April 15, 2014

Tennessee Husband and Wife Sentenced to 36 Months for Tax Fraud
James E. Beavers and Beverly S. Beavers of Knoxville, Tenn., were each sentenced to serve 36 months in prison followed by three years of supervised release, the Justice Department and Internal Revenue Service (IRS) announced today.  James and Beverly Beavers were also each ordered to pay restitution in the amount of $591,123.  On March 20, 2013, a jury sitting in Knoxville, Tenn., found the couple guilty of conspiracy to defraud the United States and filing false claims for tax refunds.  They have been in custody since they were convicted.

Court documents and the evidence at trial showed that James Beavers held a Ph.D. in civil engineering and was employed as an engineering consultant.  He was formerly employed as the director of an academic engineering center at the University of Tennessee.  Beverly Beavers owned a small formalwear and jewelry store in Knoxville.

According to court documents and the evidence presented at trial, in June 2009, James and Beverly Beavers arranged to have a fraudulent 2008 tax return prepared by PMDD Services LLC, a tax return preparation firm that helped clients claim exorbitant tax refunds specifically intended to help the clients pay off their personal debts.  The tax return falsely reported that their personal debts, including the amount of the Beavers’ mortgage and the limits on their credit cards, were actually income on which federal income tax was withheld.  This fictitious income and tax withholding were reported to the IRS on false Forms 1099-OID, which were prepared by Penny Jones of PMDD Services based on information provided by James and Beverly Beavers.  As a result of the fraudulently inflated income and withholding, the Beavers’ 2008 tax return claimed a fraudulent tax refund of over $591,000.  Upon receiving the funds, James and Beverly Beavers paid off their home mortgage, then conveyed their newly unencumbered real estate to sham trusts in order to impede IRS efforts to collect the erroneously paid refund.  They later filed false amended tax returns for the 2006 and 2007 tax years, also prepared by Jones, requesting fraudulent tax refunds of $193,056 and $202,625, respectively.  Jones pleaded guilty to related tax crimes and was sentenced to 144 months in prison in January 2013.

Assistant Attorney General Kathryn Keneally of the Tax Division commended the efforts of special agents of IRS – Criminal Investigation who investigated the case and Trial Attorneys Jonathan Marx and Jed Silversmith of the Tax Division who prosecuted the case, with local assistance from the U.S. Attorney’s Office for the Eastern District of Tennessee.

Sunday, April 20, 2014


SEC Charges Hedge Fund Manager for Defrauding Investors

On April 4, 2014, the Securities and Exchange Commission filed suit in United States District Court in Dallas, Texas, alleging that, from October 2009 to June 2012, Matthew D. Sample of San Diego, California raised almost $1 million from five investors based on representations that he would use their money to trade on the investors’ behalf. Instead, the Commission alleges that he fraudulently diverted approximately one-third of the money for his personal use and to make payments to other investors.

The Commission's complaint alleges that Sample raised the money from investors based in New Mexico and elsewhere through his hedge fund, The Lobo Volatility Fund, LLC. Sample told investors he would take a monthly management fee of 1/12 of 1% of Lobo’s net asset value, 20% of trading profits and only limited expenses. But almost immediately after receiving investor funds, Sample diverted significant sums to his personal accounts, credit card payments, retail purchases, meals, and entertainment. The complaint further alleges that when Sample’s trading strategy failed, resulting in the loss of all remaining investor funds, he provided investors with false documents making it look like his trading had been successful. He also used at least $50,000 from a new investor to make a partial payment to an investing couple who had demanded a refund.

The Commission charges Sample with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), (2) and (4) of the Investment Advisers Act of 1940. Without admitting or denying the allegations in the complaint, Sample has consented to permanent injunctions against violations of these provisions and from directly or indirectly soliciting or accepting funds from any person or entity for any unregistered offering of securities. The Commission has asked the district court to order Sample to pay disgorgement of ill-gotten gains with prejudgment interest and to impose civil penalties.

This matter was investigated by Ty Martinez, under the supervision of Jonathan P. Scott, both of the Fort Worth Regional Office. Bret Helmer will lead the litigation.

Saturday, April 19, 2014


Wednesday, April 9, 2014
Former Captain at New Mexico Prison Indicted for Sexual Assaults of Women Inmates and Making False Statements

A federal grand jury in Albuquerque, N.M., indicted John Greene, 70, a former captain at the Gallup-McKinley Adult Detention Center (GMADC), on charges related to the sexual assaults of women inmates in his custody.

Greene is charged with three counts of violating the civil rights of three different victims by engaging in unwanted sexual contact with the victims while they were incarcerated at GMADC.  The indictment also charges Greene with two counts of making material false statements to the FBI.  Specifically, one count charges Greene with lying to the FBI when he denied touching the breasts of a woman in his custody, and the second count charges Greene with lying to the FBI when he denied having any personal contact with another woman in his custody.  The indictment alleges that Greene knew these statements were false at the time that he made them because he had, in fact, touched the breasts of these women.
Greene faces a statutory maximum sentence of 13 years in prison for all of the crimes charged in the indictment.  An indictment is merely an accusation and Greene is presumed innocent unless proven guilty.

This case is being investigated by the Gallup Resident Agency of the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Mark Baker for the District of New Mexico and Fara Gold of the Justice Department’s Civil Rights Division.

Friday, April 18, 2014


Thursday, April 17, 2014
Navy Petty Officer Based in Japan Charged in International Bribery Scandal

A fourth U.S. Navy official has been charged in a complaint unsealed today with accepting cash, luxury travel and consumer electronics from a foreign defense contractor in exchange for classified and internal U.S. Navy information.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General for Investigations James B. Burch of the U.S. Department of Defense Office of the Inspector General made the announcement.

Petty Officer First Class Dan Layug, 27, who enlisted in the Navy in September 2006, was arrested on April 16, 2014, in San Diego by special agents with NCIS and Defense Criminal Investigative Service.   Layug made his initial appearance today in federal court before U.S. Magistrate Judge Karen S. Crawford in the Southern District of California.

According to the complaint, Layug received bribes in return for sending sensitive U.S. Navy information to employees of Glenn Defense Marine Asia (GDMA), a defense contractor.   GDMA CEO Leonard Glenn Francis, 49, of Malaysia, had previously been charged with conspiring to bribe U.S. Navy officials, and GDMA executive Alex Wisidagama, 40, of Singapore, pleaded guilty on March 18, 2014, to defrauding the U.S. Navy.   Two other senior Navy officials – Commander Michael Vannak Khem Misiewicz, 46, and Commander Jose Luis Sanchez, 41 – have been charged separately with bribery conspiracies involving Francis and have pleaded not guilty.   On Dec. 17, 2013, Naval Criminal Investigative Service (NCIS) Supervisory Special Agent John Bertrand Beliveau II, 44, pleaded guilty to bribery charges for regularly tipping off Francis to the status of the government’s investigation into GDMA.

According to the complaint, Layug worked secretly on behalf of GDMA by providing classified ship schedules and other sensitive U.S. Navy information in exchange for cash, travel expenses, and consumer electronics.   Court records allege that Layug used his position as a logistics specialist at a U.S. Navy facility in Yokosuka, Japan, to gain access to U.S. Navy ship schedules – some of which were classified – and other internal information, and provided this information to GDMA’s vice president of global operations.   In exchange, court records allege, GDMA provided Layug with regular payments, some of which were delivered in envelopes of cash.  The complaint alleges that on May 21, 2012, the vice president of global operations instructed a GDMA accountant that “at the end of each month, we will be providing an allowance to Mr. Dan Layug.   Total of US $1000.   You may pay him the equivalent in Yen.   He will come by the office at the end of each month to see you.”

Court records allege that, in addition to his monthly “allowance,” Layug sought consumer electronics from GDMA.   In an email on March 9, 2012, Layug asked the vice president of global operations “what are the chances of getting the new Ipad 3 [sic]?   Please let me know.”   In another email exchange on May 28, 2013, Layug asked the vice president of global operations for a “bucket list” of items including a high end camera, an iPhone5 cellular phone, a Samsung S4 cellular phone, and an iPad Mini.   Shortly after sending his “bucket list” to the vice president of global operations, Layug stated in an email that “the camera is awesome bro!   Thanks a lot!   Been a while since I had a new gadget!”

In addition to consumer electronics, GDMA allegedly provided Layug and his friends with rooms at luxury hotels throughout Asia.

According to court documents, Layug allegedly undertook steps to conceal his bribery relationship with GDMA by, among other things, describing classified ship schedules using the code word “golf schedules” and opening a bank account in the name of his infant daughter into which he deposited portions of his “allowance.”

The ongoing investigation is being conducted by NCIS, the Defense Criminal Investigative Service and the Defense Contract Audit Agency.

The case is being prosecuted by Assistant U.S. Attorneys Mark Pletcher and Robert Huie of the Southern District of California, Director of Procurement Fraud Catherine Votaw and Attorney Brian Young of the Criminal Division’s Fraud Section, and Trial Attorney Wade Weems, on detail to the Fraud Section from the Special Inspector General for Afghan Reconstruction.

The charges contained in the criminal complaint are merely allegations, and the defendant is presumed to be not guilty unless and until proven guilty.

Wednesday, April 16, 2014



J. Keith McCray, a criminal investigator with the Macon County, Ala., Sheriff’s Office, pleaded guilty in federal court today to assaulting a handcuffed man at the county jail, resulting in bodily injury to the victim.

An indictment against McCray, 41, charged that on July 4, 2013, he violated the civil rights of a door-to-door salesman who was selling alarm systems in McCray’s Tuskegee, Ala., neighborhood.  At the plea hearing, McCray admitted that he arrested the salesman and transported him to the Macon County Jail.  There, McCray struck the victim four times in the face and head while the victim was handcuffed and posed no threat.

McCray pleaded guilty to one felony count of deprivation of rights under color of law.  At sentencing, McCray faces a maximum sentence of 10 years in prison and a $250,000 fine. 

“The defendant attacked an innocent citizen who was simply trying to earn a living on the day of the incident,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “When he assaulted the defenseless victim, he violated the trust put in him by the community as well as the law.  The Department will continue to hold accountable those who abuse their authority.”

“While we look to law enforcement to maintain the safety and security of our citizens, their position of authority does not give them the right to act outside the bounds of the law,” said U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.  “We trust them to protect and serve our communities.  While most members of law enforcement serve honorably,  McCray breached this trust and must be held accountable.  Failure to do so would discredit the noble service of every other officer, and weaken the public’s trust in those who are sworn to protect them.” 

This case was investigated by the FBI and the Alabama Bureau of Investigation.  The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the Civil Rights Division.


For Immediate Release
April 09, 2014 Linwood Battle, Supervisory Deputy U.S. Marshal 
USMS Office of Public Affairs

District of Columbia Sets the Clock to Jump Start “Operation Spring Forward”
Washington, DC – U.S. Marshal Edwin Sloane announces the completion of a district warrant sweep. The U.S. Marshals Service (USMS), District of Columbia along with the assistance of the USMS Capital Area Regional Fugitive Task Force and USMS Investigative Operations Division, Criminal Investigations Branch conducted a four day warrant sweep entitled “Operation Spring Forward”. The sweep began on April 1, 2014 and commenced on April 4, 2014.

The purpose of this operation was to complete a timely review of all the pending warrants for federal probation violations and federal bail default issued in the U.S. District Court for the District of Columbia and initiate investigative endeavors for each. A total of ninety seven endeavors were completed and thirty two arrests made.

Information during this operation revealed that eighteen wanted subjects are now residing outside of the United States. Additionally, valuable information was obtained that permitted the closure of older cases.

The operation was a success.

Tuesday, April 15, 2014




WASHINGTON — A co-owner of a Middlesex, N.J., industrial pipes, valves and fittings supply company pleaded guilty today to one count of making a false statement, the Department of Justice announced.
Victor Boski pleaded guilty in the U.S. District Court of New Jersey to willfully making a materially false and fictitious statement to the U.S. Environmental Protection Agency (EPA) at a debarment proceeding. Previously, Boski and his company, National Industrial Supply LLC (NIS), had pleaded guilty on March 4, 2009, to participating in a kickback and fraud conspiracy to defraud the EPA at the Federal Creosote Superfund site located in Manville, N.J., and to defraud Tierra Solutions Inc., a general contractor based in The Woodlands, Texas, at the Diamond Alkali Superfund site in Newark, N.J., from approximately December 2000 to approximately September 2004. As outlined in the 2009 plea agreement, Boski provided $55,000 in kickbacks to two employees of the prime contractor responsible for awarding contracts at the two Superfund sites in exchange for the award of sub-contracts to NIS. These kickbacks included luxury vacations and payments to shell companies held by the two employees. Today’s guilty plea arises from false statements Boski made to the EPA in regard to his and NIS’s debarment hearing that resulted from the 2009 guilty pleas.

According to court documents, Boski appeared before the EPA on or about Nov. 30, 2011, on behalf of NIS to review his and NIS’s future eligibility to contract with the United States. During the course of the hearing, Boski falsely stated that he and NIS had paid kickbacks in the form of sporting event tickets and that the $55,000 in kickbacks he and NIS pleaded guilty to paying was an artificial number.

“When individuals plead guilty to participating in fraud and kickback schemes, it is crucial that that they do not then lie to government procurement officials about their conduct,” said Bill Baer, Assistant Attorney General in charge of the Justice Department’s Antitrust Division. “The division will vigorously prosecute individuals who make false statements regarding the crimes they have committed.”

Including Boski, nine individuals and three companies have pleaded guilty or been convicted of charges arising out of this investigation. More than $6 million in criminal fines and restitution have been imposed and six of the individuals have been sentenced to serve prison sentences ranging from five months to 14 years. One individual was sentenced to six months home confinement and the remaining two were sentenced to pay criminal fines and restitution. An additional individual, John A. Bennett, a Canadian citizen, was also charged on Aug. 31, 2009, and is facing extradition to the United States. Boski is scheduled to be sentenced on July 7, 2014, before Judge Susan D. Wigenton.

Boski faces a maximum penalty of five years in prison and a $250,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either of those amounts is greater than the statutory maximum fine.

Sunday, April 13, 2014


Monday, March 31, 2014
Seven Indicted in Florida in Mortgage Scheme

Seven individuals have been indicted in the Southern District of Florida for their alleged participation in a mortgage fraud scheme in the Miami area.

The charges were announced by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Inspector General David A. Montoya of the Department of Housing and Urban Development and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency’s Office of the Inspector General.

A 19-count indictment, returned on March 13, 2014, by a federal grand jury and unsealed today, charges Miami-Dade County residents Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo with one count of conspiracy to commit wire and bank fraud.   Some of those defendants have also been charged with bank fraud and wire fraud.   Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez were taken into custody today and made their initial appearances before United States Magistrate Judge Jonathan Goodman in Miami, while the other three defendants remain at large.

As alleged in the indictment, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez owned or controlled various real estate properties in the Miami area.   They enlisted mortgage brokers and other individuals, including Perez and Angulo, to recruit straw buyers to act as qualifying mortgage applicants to fraudulently purchase condominiums in the properties.   The defendants prepared and caused to be prepared loan documents containing false statements and representations relating to the buyers’ income, assets and other information necessary to enable lenders to assess the buyers’ qualifications to borrow money, which induced the lenders to make loans to finance the condominiums.   Luis Michael Mendez and Marie Mendez are alleged to have submitted their own fraudulent loan applications for two condominiums, and they, as well as Luis Mendez and Stavroula Mendez, advanced the buyers cash to close the transactions.

After the loans were funded, the defendants allegedly caused fraudulent payments to be made from the loan proceeds to pay kickbacks through shell companies to the brokers, recruiters and straw buyers, as well as to pay the mortgages to conceal the conspiracy.   Eventually, the conspirators were unable to make mortgage payments, causing many of the condominium units to go into foreclosure and leading to losses by the lenders.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case is being investigated by HUD-OIG and FHFA-OIG.  The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.

Friday, April 11, 2014


Wednesday, April 2, 2014
Six Defendants Indicted in Alleged Conspiracy to Bribe Government Officials in India to Mine Titanium Minerals

A federal indictment returned under seal in June 2013 and unsealed today charges six foreign nationals, including a Ukrainian businessman and a government official in India, with participating in an alleged international racketeering conspiracy involving bribes of state and central government officials in India to allow the mining of titanium minerals.  Five of the six defendants are also charged with conspiracy to violate the Foreign Corrupt Practices Act (FCPA), among other offenses.

Acting Assistant Attorney General David A. O’Neil of the Department of Justice’s Criminal Division, U.S. Attorney Zachary T. Fardon for the Northern District of Illinois and Special Agent in Charge Robert J. Holley of the FBI’s Chicago Field Office made the announcement.

“Fighting global corruption is part of the fabric of the Department of Justice,” said Acting Assistant Attorney General O’Neil.  “The charges against six foreign nationals announced today send the unmistakable message that we will root out and attack foreign bribery and bring to justice those who improperly influence foreign officials, wherever we find them.”

“Criminal conspiracies that extend beyond our borders are not beyond our reach,” said U.S. Attorney Fardon.   “We will use all of the tools and resources available to us to ensure the integrity of global business transactions that involve U.S. commerce.”

“This case is another example of the FBI’s willingness to aggressively investigate corrupt conduct around the globe” said Special Agent in Charge Holley.  “With the assistance of our law enforcement partners, both foreign and domestic, we will continue to pursue those who allegedly bribe foreign officials in return for lucrative business contracts.”

Beginning in 2006, the defendants allegedly conspired to pay at least $18.5 million in bribes to secure licenses to mine minerals in the eastern coastal Indian state of Andhra Pradesh.   The mining project was expected to generate more than $500 million annually from the sale of titanium products, including sales to unnamed “Company A,” headquartered in Chicago.

One defendant, Dmitry Firtash, aka “Dmytro Firtash” and “DF,” 48, a Ukrainian national, was arrested March 12, 2014, in Vienna, Austria.   Firtash was released from custody on March 21, 2014, after posting 125 million euros (approximately $174 million) bail, and he pledged to remain in Austria until the end of extradition proceedings.

Five other defendants remain at large: Andras Knopp, 75, a Hungarian businessman; Suren Gevorgyan, 40, of Ukraine; Gajendra Lal, 50, an Indian national and permanent resident of the United States who formerly resided in Winston-Salem, N.C.; Periyasamy Sunderalingam, aka “Sunder,” 60, of Sri Lanka; and K.V.P. Ramachandra Rao, aka “KVP” and “Dr. KVP,” 65, a Member of Parliament in India who was an official of the state government of Andhra Pradesh and a close advisor to the now-deceased chief minister of the State of Andhra Pradesh, Y.S. Rajasekhara Reddy.

The five-count indictment was returned under seal by a federal grand jury in Chicago on June 20, 2013.   All six defendants were charged with one count each of racketeering conspiracy and money laundering conspiracy, and two counts of interstate travel in aid of racketeering.   Five defendants, excluding Rao, were charged with one count of conspiracy to violate the FCPA.

As alleged in court documents, Firtash controls Group DF, an international conglomerate of companies that was directly and indirectly owned by Group DF Limited, a British Virgin Islands company.   Group DF companies include: Ostchem Holding AG, an Austrian company in the business of mining and processing minerals, including titanium; Global Energy Mining and Minerals Limited, a Hungarian company, and Bothli Trade AG, a Swiss company, for which Global Energy Mining and Minerals was the majority shareholder.   In April 2006, Bothli Trade and the state government of Andhra Pradesh agreed to set up a joint venture to mine various minerals, including ilmenite, a mineral which may be processed into various titanium-based products such as titanium sponge, a porous form of the mineral that occurs in the processing of titanium ore.

In February 2007, Company A entered into an agreement with Ostchem Holding, through Bothli Trade, to work toward a further agreement that would allow Bothli Trade the ability to supply 5 million to 12 million pounds of titanium sponge from the Indian project to Company A on an annual basis.   The mining project required licenses and approval of both the Andhra Pradesh state government and the central government of India before the licenses could be issued.

As alleged in the indictment, the defendants used U.S. financial institutions to engage in the international transmission of millions of dollars for the purpose of bribing Indian public officials to obtain approval of the necessary licenses for the project.   They allegedly financed the project and transferred and concealed bribe payments through Group DF, and used threats and intimidation to advance the interests of the enterprise’s illegal activities.

According to the indictment, Firtash was the leader of the enterprise and caused the participation of certain Group DF companies in the project.   Firtash allegedly met with Indian government officials, including Chief Minister Reddy, to discuss the project and its progress, and authorized payment of at least $18.5 million in bribes to both state and central government officials in India to secure the approval of licenses for the project.   Firtash also allegedly directed his subordinates to create documents to make it falsely appear that money transferred for the purpose of paying these bribes was transferred for legitimate commercial purposes, and he appointed various subordinates to oversee efforts to obtain the licenses through bribery.

As alleged in the indictment, Knopp supervised the enterprise and, together with Firtash, met with Indian government officials.   Knopp also met with Company A representatives to discuss supplying titanium products from the project.   Gevorgyan allegedly traveled to Seattle and met with Company A representatives.   Gevorgyan also engaged in other activities, including allegedly signing false documents, monitoring bribe payments and coordinating transfers of money to be used for bribes.   Lal, also known as “Gaj,” allegedly engaged in similar activities, reported to Firtash and Knopp on the status of obtaining licenses, and recommended whether, and in what manner, to pay certain bribes to government officials.

The indictment further alleges that Sunderalingam met with Rao to determine the total amount of bribes and advised others on the results of the meeting, and he identified various foreign bank accounts held in the names of nominees outside India that could be used to funnel bribes to Rao.   Rao allegedly solicited bribes for himself and others in return for approving licenses for the project, and he warned other defendants concerning the threat of a possible law enforcement investigation of the project.

The indictment lists 57 transfers of funds between various entities, some controlled by Group DF, in various amounts totaling more than $10.59 million beginning April 28, 2006, through July 13, 2010.

The indictment seeks forfeiture from Firtash of his interests in Group DF Limited and its assets, including 14 companies registered in Austria and 18 companies registered in the British Virgin Islands, as well as 127 other companies registered in Cyprus, Germany, Hungary, the Netherlands, Seychelles, Switzerland, the United Kingdom and one unknown jurisdiction and all funds in 41 bank accounts in several of those same countries.   Furthermore, the indictment seeks forfeiture from all six defendants of more than $10.59 million.

This case is being investigated by the FBI’s Chicago Field Office.   The case is being prosecuted by Assistant U.S. Attorneys Amarjeet Bhachu and Michael Donovan of the Northern District of Illinois and Trial Attorney Ryan Rohlfsen of the Criminal Division’s Fraud Section.

The Justice Department has worked closely with and has received significant assistance from its law enforcement counterparts in Austria, as well as the Hungarian National Police, and greatly appreciates their assistance in this matter.  Significant assistance was also provided by the Criminal Division’s Office of International Affairs.

An indictment contains only charges and is not evidence of guilt.   The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proof beyond a reasonable doubt.

Wednesday, April 9, 2014


Monday, March 31, 2014
Los Angeles Physician Assistant Pleads Guilty in Two Medicare Fraud Cases

A Los Angeles physician assistant pleaded guilty today to defrauding Medicare by signing fraudulent prescriptions for durable medical equipment while working at two separate medical clinics in California.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office and Special Agent in Charge Erick Martinez of Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.

Erasmus Kotey, 77, of Montebello, Calif., pleaded guilty before U.S. District Judge Margaret M. Morrow in the Central District of California to one count of health care fraud and one count of conspiracy to commit health care fraud.   Sentencing is scheduled for Sept. 8, 2014.

According to court documents, Kotey was a physician assistant who worked at medical clinics in and around Los Angeles County.   From approximately November 2007 through February 2008, Kotey engaged in a scheme to commit health care fraud through his work at a clinic located at 866 North Vermont Avenue in Los Angeles.   In addition, from approximately April 2008 through December 2008, Kotey engaged in a conspiracy to commit health care fraud through his work at a clinic located at 943 South Atlantic Boulevard, Suite 218, in Monterey Park, Calif.

At both clinics, Kotey signed prescriptions and other medical documents for medically unnecessary power wheelchairs and other durable medical equipment (DME).   Kotey and his co-conspirators then sold the prescriptions to DME supply companies, knowing that the prescriptions were fraudulent.   Based on these fraudulent prescriptions, the DME supply companies then submitted false and fraudulent claims to Medicare.

Combined, the two indictments allege that fraudulent prescriptions from Kotey were responsible for approximately $7 million in false and fraudulent claims to Medicare, and Medicare paid approximately $3 million on those claims.

The cases were investigated by the FBI, HHS-OIG and the IRS and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.   The cases are being prosecuted by Trial Attorney Fred Medick of the Fraud Section and Assistant U.S. Attorneys Kristen Williams and Cathy Ostiller of the Central District of California.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Tuesday, April 8, 2014


Monday, April 7, 2014

As Tax Filing Deadline Nears, Attorney General Holder Calls Stolen Identity Refund Fraud ‘Rising Threat,’ Vows Aggressive Enforcement Against Scams
Justice Department Charged More Than 880 Defendants Involved in Stolen Identity Refund Fraud in the Past Year

As the April 15 tax filing deadline approaches, Attorney General Eric Holder warned U.S. tax filers to beware a “rising threat” of scammers seeking fraudulent refunds based on stolen identities, and vowed aggressive enforcement against the practice.  Speaking in a recorded video message released on the Justice Department’s website, Attorney General Holder explained that a growing pool of criminals are engaged in the activity, including gangs and drug sellers seeking quick access to cash.

The Justice Department’s Tax Division, in conjunction with the Internal Revenue Service and U.S. Attorneys’ Offices nationwide, have prioritized the investigation and prosecution of individuals who engage in stolen identity refund fraud.  In the last year alone, the Department charged more than 880 defendants involved in stolen identity refund fraud, and the IRS reports that it resolved or closed approximately 963,000 cases involving identity theft victims.

“This is an increasingly urgent problem,” said Attorney General Holder.  “Its impact can be devastating to families that are counting on legitimate tax refunds that are diverted by identity theft.  And especially in recent years, the Justice Department has seen the scale, scope, and execution of these fraud schemes grow significantly.”

The Attorney General urged Americans to protect themselves by reporting suspicious activity and learning more at the IRS website, the Justice Department’s Tax Division website, and STOPFRAUD.GOV.  Noting that anyone can be a target of these scams, Attorney General Holder shared his own recent experience with tax refund fraud after two individuals in Georgia attempted to obtain a fraudulent refund using his personal information.

            The complete text of the Attorney General’s video message is below:

“With the time to file taxes just around the corner, we at the Justice Department want to warn you about a rising threat facing law-abiding taxpayers.

“Over the last several years, stolen identity refund fraud has affected hundreds of thousands of Americans, victimizing honest citizens and draining billions of taxpayer dollars from the U.S. Treasury.  In fact, the IRS reported that last year they resolved and closed approximately 963,000 cases involving identity theft victims.  Criminals who perpetrate these schemes use stolen personal identifying information – such as Social Security numbers – to file false tax returns with the IRS in order to steal fraudulent tax refunds.

“These scams are no longer just about white-collar criminals.  They are carried out by a variety of actors – from greedy tax return preparers to identity brokers who profit from the sale of personal information – to gangs and drug rings looking for easy access to cash.  And these criminal enterprises disproportionately target the most vulnerable members of society – including low-income families, the elderly, Medicaid recipients, and those who have lost loved ones – including children.

“This is an increasingly urgent problem.  Its impact can be devastating to families that are counting on legitimate tax refunds that are diverted by identity theft.  And especially in recent years, the Justice Department has seen the scale, scope, and execution of these fraud schemes grow significantly.

“Fortunately, our knowledge of these crimes – and our ability to stop them – has grown as well.  Last year alone, the Justice Department charged more than 880 defendants for their involvement in stolen identity refund fraud.  Over the last few years – in some instances – those convicted of these crimes have faced sentences totaling upwards of ten years in prison.  These sentences match the seriousness of these crimes.  And they demonstrate our steadfast commitment to investigating and prosecuting tax refund fraud that involves identity theft.

“Particularly as we approach April 15th – as millions of Americans prepare and file this year’s tax returns – the Justice Department and its partners are stepping up our enforcement efforts.  And we’re taking aggressive action to stop stolen identity refund fraud in its tracks whenever and wherever it occurs.

“The Justice Department will use every tool at its disposal to go after these scammers.  And we’ll keep working with the IRS, the FBI, the Secret Service, the Postal Inspection Service, and other federal law enforcement agencies – as well as state and local law authorities – to combat these crimes.  But we need members of the public to do their part by staying vigilant.  After all, identity thieves can target anyone – something I saw firsthand last year, when two people attempted to get a fraudulent tax refund using my personal information.

“So I urge all of you to help my colleagues and I raise awareness about this growing threat.  Protect yourself by reporting suspicious activity and filing your taxes as early as possible.  And keep yourself from becoming a target by learning more about fraud and identity theft on the IRS website – or by visiting STOPFRAUD.GOV.”

Sunday, April 6, 2014


California Gang Violence Spills into Albuquerque

Albuquerque, NM – On March 31, 2014, the United States Marshals Service’s South West Investigative Fugitive Team (SWIFT) fugitive task force arrested Maria Cathy Tercero on a warrant charging her with Attempted Homicide. Tercero was charged on August 1, 2012, in Victorville Superior Court in California. The attempted homicide occurred during an incident between rival gangs. Allegedly, Tercero and three additional gang members held down several victims from a rival gang and stabbed them multiple times. Tercero’s three accomplices were apprehended but Tercero fled California.

United States Marshals in central California developed leads that Tercero relocated to Albuquerque, NM. Deputy Marshals in Albuquerque were able to track Tercero to the 4000 block of Glen Canyon Court in northeast Albuquerque, NM. A team of law enforcement officers from the Marshal’s SWIFT task force located and arrested Tercero without incident. Tercero was transported and booked into the Bernalillo County Metropolitan Detention Center and remains there on $1,100,000.00 bail and/or extradition back to California to face charges.

Saturday, April 5, 2014


For Immediate Release
April 04, 2014
Western District of Texas – San Antonio 
Justice To Be Served
Murder Suspect Captured After 4 Year Investigation

San Antonio, TX – Joe Martinez III, 24, was arrested this afternoon by the United States Marshals Service Lone Star Fugitive Task Force (LSFTF) in San Antonio, TX. An arrest warrant was issued pursuant to an investigation by the San Antonio Police Department (SAPD), where it is alleged that Martinez committed 1st degree murder.

On March 24, 2014, members of the LSFTF initiated an investigation in locating and apprehending Martinez. Through investigative efforts and extensive surveillance, task force officers along with assistance from SAPD determined that Martinez was hiding out with his girlfriend, Rebecca Rodriguez, 23, in a hotel room located in the 2100 block of SW Loop 410, on the northwest side of San Antonio. While conducting surveillance, task force officers positively identified Martinez as he and Rodriguez exited the hotel room. Task force officers approached Martinez, identified themselves, and took him into custody without incident. Task force officers also arrested Rodriguez based on an outstanding warrant for theft of a person.

On February 10, 2010, Martinez was allegedly involved in a shooting that resulted in the death of a man here in San Antonio. Reports stated that two rival groups were involved in a verbal altercation at a local restaurant. The next day, Martinez and his group of friends approached the victim in the 1700 block of West Laurel Street. Martinez allegedly pulled out a handgun and shot the victim. After an extensive investigation conducted by SAPD detectives, a District Court Judge of Bexar County issued a warrant for Martinez’s arrest on March 20, 2014.

Martinez is currently being held in custody at the Bexar County Jail.

Robert R. Almonte, United States Marshal for the Western District of Texas, stated, “I am grateful for the successful efforts displayed by our task force officers in arresting this fugitive, but more importantly I extend my sincere gratitude to the SAPD detectives who worked diligently and persistently over the past 4 years so that Martinez could finally be brought to justice.”

Members of the Lone Star Fugitive Task Force:
New Braunfels Police Department
San Antonio Police Department
San Antonio Independent School District Police Department
Bexar County Sheriff’s Office
Comal County Sheriff’s Office
Bexar County Fire Marshal’s Office
Bexar County District Attorney’s Office
Texas Office of The Attorney General
Texas Department of Public Safety
Texas Department of Criminal Justice – Office of the Inspector General
Immigration & Customs Enforcement – Office of Detention & Removal
U.S. Marshals Service
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