The following excerpt is from the U.S. Marshals Service website:
“During the week of November 4-10, 2011, the U.S. Marshals Service (USMS) in Northern California, the USMS Pacific Southwest Regional Fugitive Task Force (PSWRFTF), U.S. Marshals Sex Offender Investigations Branch (SOIB), the USMS Tactical Operations Group (TOG) Air Branch, the Organized Crime Drug Enforcement Task Force (OCDETF), USMS Special Operations Group (SOG), the U.S. Attorney’s Office, and the Oakland Police Department (OPD) partnered with the California Department of Corrections, California Highway Patrol, ATF, DEA/HIDTA, Secret Service, and OIG/HUD to conduct a multi-stage warrant sweep and “hot-spot” saturation operation.
As of October 16, 2011, the city of Oakland has reported a 36% increase in homicides, 27% increase in ADW (firearms), and a 5% increase in robberies. Weapons related arrests are down 16% year to date. As a result, the U.S. Attorney for the District of Northern California, Melinda Haag, and the U.S. Marshal for Northern California, Donald O’Keefe, began planning the multi-agency operation in conjunction with the Chief of OPD, Howard Jordan, over two months ago.
During the mission several multi-agency teams of law enforcement officers safely located and arrested subjects for which state arrest warrants have been issued. Teams also conducted saturation patrols in identified violent crime hot-spots in an effort to prevent acts of violent crimes as well as apprehending warrant suspects. Teams conducted probation, parole and sex offender compliance checks, as well as executing searches at residences associated with known criminal activity and or acts of violence. In addition, the Oakland Police Department’s Major Crimes Unit gathered intelligence information related to violent crime.
Over the course of the week, 138 arrests were made as well as the seizure of 13 firearms. Also confiscated during the operation were two ballistic vests, 6 lbs of marijuana, 11 oz. of methamphetamine, 2 oz. of heroin, 25 grams of cocaine, various other narcotics, and 15 stolen vehicles.
The mission concluded with a joint press conference held at the Oakland Police Headquarters on Thursday, November 10, 2011. All participating agencies were represented. Also present was the Mayor of Oakland, Jean Quan, and the Oakland City Administrator, Deanna Santana.”
Wednesday, November 30, 2011
Monday, November 28, 2011
HUNGARIAN SEEKER PLEADS GUILTY TO HACKER CRIMES
The following excerpt is from the Department of Justice website:
Wednesday, November 23, 2011
“Hungarian Citizen Pleads Guilty to Hacking into Marriott Computers and Extorting Employment from the Company
WASHINGTON – A Hungarian citizen pleaded guilty today to intentionally causing damage by transmitting a malicious code to Marriott International Corporation computers and to threatening to reveal confidential information obtained from the company’s computers if Marriott did not offer him a job.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge David Beach of the U.S. Secret Service, Washington Field Office.
Attila Nemeth, 26, pleaded guilty in the District of Maryland before U.S. District Judge J. Frederick Motz.
According to Nemeth’s plea agreement, on Nov. 11, 2010, Nemeth sent an initial email to Marriott personnel, advising that he had been accessing Marriott’s computers for months and had obtained proprietary information. Nemeth threatened to reveal this information if Marriott did not give him a job maintaining the company’s computers. On Nov. 13, 2010, after receiving no response from Marriott, Nemeth sent another email containing eight attachments, seven of which were confirmed as documents stored on Marriott’s computer system. These documents included financial documentation and other confidential and proprietary information. Nemeth admitted that through an infected email attachment sent to specific Marriott employees he was able to install malicious software on Marriott’s system that gave him a “backdoor” into the system. Using the “backdoor,” Nemeth was able to access proprietary email and other files belonging to Marriott.
According to the plea agreement, on Nov. 18, 2010, Marriott created the identity of a fictitious Marriott employee for the use by the U.S. Secret Service in an undercover operation to communicate with Nemeth. Nemeth, believing he was communicating with Marriott human resources personnel, continued to call and email the undercover agent, and demanded a job with Marriott in order to prevent the public release of the Marriott documents. Nemeth emailed a copy of his Hungarian passport as identification and offered to travel to the United States.
On Jan. 17, 2011, Nemeth arrived at Washington Dulles Airport on a ticket purchased by Marriott, for an “employment interview.” The “interview” was conducted by a Secret Service agent assuming the role of the Marriott employee with whom Nemeth believed he had been communicating. During the course of the “interview,” Nemeth admitted that he accessed Marriott’s computer systems; stole Marriott’s confidential and proprietary information; and initiated the emails to Marriott threatening to publicly release Marriott’s data unless he was given a job on his terms by Marriott. To further prove his identity as the perpetrator, Nemeth demonstrated exactly how he accessed the Marriott network; his continued ability to access the Marriott network; and the location of the stolen Marriott proprietary data on a computer server located in Hungary.
As a result of the compromise of its computer network, Marriott was compelled to engage more than 100 of its employees in a thorough search of its network to determine the scope of the compromise and to identify the data that may have been compromised. The loss to Marriott as a result of the intentional damage caused by Nemeth is between $400,000 and $1 million dollars in salaries, consultant expenses and other costs associated with Nemeth’s intrusion.
Nemeth faces a maximum penalty of 10 years in prison for the transmission of the malicious code and a maximum of five years in prison for threatening to expose confidential and proprietary information if Marriott did not give him a job. Sentencing is scheduled for Feb. 3, 2012, at 11 a.m. Nemeth remains detained.
The case is being investigated by the U.S. Secret Service and prosecuted by Special Assistant U.S. Attorney Anthony V. Teelucksingh assigned from the Computer Crime and Intellectual Property Section of the Justice Department’s Criminal Division.”
Wednesday, November 23, 2011
“Hungarian Citizen Pleads Guilty to Hacking into Marriott Computers and Extorting Employment from the Company
WASHINGTON – A Hungarian citizen pleaded guilty today to intentionally causing damage by transmitting a malicious code to Marriott International Corporation computers and to threatening to reveal confidential information obtained from the company’s computers if Marriott did not offer him a job.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge David Beach of the U.S. Secret Service, Washington Field Office.
Attila Nemeth, 26, pleaded guilty in the District of Maryland before U.S. District Judge J. Frederick Motz.
According to Nemeth’s plea agreement, on Nov. 11, 2010, Nemeth sent an initial email to Marriott personnel, advising that he had been accessing Marriott’s computers for months and had obtained proprietary information. Nemeth threatened to reveal this information if Marriott did not give him a job maintaining the company’s computers. On Nov. 13, 2010, after receiving no response from Marriott, Nemeth sent another email containing eight attachments, seven of which were confirmed as documents stored on Marriott’s computer system. These documents included financial documentation and other confidential and proprietary information. Nemeth admitted that through an infected email attachment sent to specific Marriott employees he was able to install malicious software on Marriott’s system that gave him a “backdoor” into the system. Using the “backdoor,” Nemeth was able to access proprietary email and other files belonging to Marriott.
According to the plea agreement, on Nov. 18, 2010, Marriott created the identity of a fictitious Marriott employee for the use by the U.S. Secret Service in an undercover operation to communicate with Nemeth. Nemeth, believing he was communicating with Marriott human resources personnel, continued to call and email the undercover agent, and demanded a job with Marriott in order to prevent the public release of the Marriott documents. Nemeth emailed a copy of his Hungarian passport as identification and offered to travel to the United States.
On Jan. 17, 2011, Nemeth arrived at Washington Dulles Airport on a ticket purchased by Marriott, for an “employment interview.” The “interview” was conducted by a Secret Service agent assuming the role of the Marriott employee with whom Nemeth believed he had been communicating. During the course of the “interview,” Nemeth admitted that he accessed Marriott’s computer systems; stole Marriott’s confidential and proprietary information; and initiated the emails to Marriott threatening to publicly release Marriott’s data unless he was given a job on his terms by Marriott. To further prove his identity as the perpetrator, Nemeth demonstrated exactly how he accessed the Marriott network; his continued ability to access the Marriott network; and the location of the stolen Marriott proprietary data on a computer server located in Hungary.
As a result of the compromise of its computer network, Marriott was compelled to engage more than 100 of its employees in a thorough search of its network to determine the scope of the compromise and to identify the data that may have been compromised. The loss to Marriott as a result of the intentional damage caused by Nemeth is between $400,000 and $1 million dollars in salaries, consultant expenses and other costs associated with Nemeth’s intrusion.
Nemeth faces a maximum penalty of 10 years in prison for the transmission of the malicious code and a maximum of five years in prison for threatening to expose confidential and proprietary information if Marriott did not give him a job. Sentencing is scheduled for Feb. 3, 2012, at 11 a.m. Nemeth remains detained.
The case is being investigated by the U.S. Secret Service and prosecuted by Special Assistant U.S. Attorney Anthony V. Teelucksingh assigned from the Computer Crime and Intellectual Property Section of the Justice Department’s Criminal Division.”
Sunday, November 27, 2011
BUSINESSMAN GETS 5 YEARS IN PRISON FOR FRAUD AND TAX EVASION
The following excerpt is from the Department of Justice website:
“Wednesday, November 16, 2011
Former Pittsfield, Mass., Entrepreneur Sentenced to More Than Five Years in Prison for Financial Crimes
WASHINGTON - A former Pittsfield man was sentenced late yesterday in federal court for his role in a series of frauds and attempts to avoid paying taxes, as well as lying to federal authorities and financial institutions about his illegal activities, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Carmen M. Ortiz for the District of Massachusetts; William P. Offord, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI) - Boston Field Office; and Theodore L. Doherty III, Special Agent in Charge of the New England Regional Office of the U.S. Department of Transportation, Office of Inspector General (DOT-OIG).
Michael J. Armitage , 56, was sentenced by U.S. District Judge Michael A. Ponsor to 66 months in federal prison to be followed by five years of supervised release. Armitage was ordered to forfeit $24,010, and pay restitution of $1.5 million to the IRS; $191,819 to the Massachusetts Department of Revenue; $4.2 million to the Federal Transit Administration; and $215,138 to the Pioneer Valley Transit Authority. Armitage pleaded guilty in October 2010 to three counts of false statements to a federally insured financial institution; three counts of tax evasion; one count of false statements to a federal official; one count of conspiracy, one count of false claims; and one count of endeavoring to obstruct a federal audit.
According to court documents, Armitage did not file a single personal federal income tax return between 1993 and 2006 in spite of receiving millions of dollars in income from sources such as Power Development Co. LLC (PDC), an energy company that he founded and controlled. In addition, in 1999, Armitage was required to repay more than $1 million to PDC for money that he had misappropriated, including approximately $340,000 in checks that he had written to himself but fraudulently mislabeled in PDC’s check register as payable to others.
From February 2001 to April 24, 2006, Armitage executed a scheme to defraud United Bank, located in West Springfield, Mass., in connection with three separate loans. According to court documents, Armitage used or submitted various false or fraudulent documents to perpetrate these fraud schemes, including a 2001 personal financial statement that omitted any debts owed to the IRS or to PDC and on which he claimed that his taxes were settled through 1999, and a 2001 personal federal income tax return that he signed and dated but never filed with the IRS.
In addition, between Aug. 20, 2001, and Oct. 18, 2006, Armitage attempted to avoid paying taxes that had been previously assessed for three separate years: 1995, 1996 and 1998. Armitage engaged in several efforts to avoid paying taxes for these years. He withheld material information from his tax representative. He directed his tax representative to contact an IRS Revenue Officer and claim that delinquent returns would be filed, when he did not intend to provide the tax representative with the information to prepare the returns. He made materially false statements to an IRS Revenue Officer. He purposely withdrew funds recently deposited in his bank account to maintain a low account balance. He diverted payments due to himself to other accounts, including his wife’s bank account, the bank account of another company that he controlled, and an escrow account belonging to another person. Finally, he used funds from an account that he controlled to pay credit cards issued in his name, all to conceal income and avoid collection.
In another scheme, from Nov. 30, 2004, through at least July 5, 2006, Armitage conspired with co-defendants EV Worldwide LLC (EVW), a company that he controlled, and Christopher Willson, another executive of EVW, to defraud the Federal Transit Administration. According to court documents, Armitage and his co-defendants submitted false, fraudulent and fictitious invoices for payment through the Pioneer Valley Transit Authority as part of a federal research grant into an electric bus and battery project. On these invoices, Armitage falsely claimed that the Federal Transit Administration’s share of the project costs did not exceed the maximum 50 percent. He also sought reimbursement for fictitious, inflated or ineligible expenses, and/or falsely claimed that certain milestone achievements warranted payment of EVW Worldwide’s claimed expenses. Through the fraudulent invoices, Armitage, Willson and EVW received $703,097 to which they were not entitled, and used this money for their own benefit as well as the benefit of another company that Armitage and Willson founded in Canada. After the Department of Transportation, Office of Inspector General commenced an audit in 2006, Armitage repeatedly lied to and attempted to obstruct the auditors.
Willson, who was convicted at trial in June 2011 on one count of conspiracy to defraud the United States and to commit wire fraud, six counts of wire fraud and four counts of false claims, is scheduled to be sentenced on Nov. 29, 2011, at 2:30 p.m.
The case investigated by IRS-CI and the DOT-OIG. The Defense Contract Audit Agency also assisted with the investigation. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow for the District of Massachusetts; Senior Litigation Counsel William M. Welch II of the Justice Department’s Criminal Division; and Trial Attorneys Kevin Driscoll and Edward J. Loya Jr. of the Criminal Division’s Public Integrity Section.”
“Wednesday, November 16, 2011
Former Pittsfield, Mass., Entrepreneur Sentenced to More Than Five Years in Prison for Financial Crimes
WASHINGTON - A former Pittsfield man was sentenced late yesterday in federal court for his role in a series of frauds and attempts to avoid paying taxes, as well as lying to federal authorities and financial institutions about his illegal activities, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Carmen M. Ortiz for the District of Massachusetts; William P. Offord, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI) - Boston Field Office; and Theodore L. Doherty III, Special Agent in Charge of the New England Regional Office of the U.S. Department of Transportation, Office of Inspector General (DOT-OIG).
Michael J. Armitage , 56, was sentenced by U.S. District Judge Michael A. Ponsor to 66 months in federal prison to be followed by five years of supervised release. Armitage was ordered to forfeit $24,010, and pay restitution of $1.5 million to the IRS; $191,819 to the Massachusetts Department of Revenue; $4.2 million to the Federal Transit Administration; and $215,138 to the Pioneer Valley Transit Authority. Armitage pleaded guilty in October 2010 to three counts of false statements to a federally insured financial institution; three counts of tax evasion; one count of false statements to a federal official; one count of conspiracy, one count of false claims; and one count of endeavoring to obstruct a federal audit.
According to court documents, Armitage did not file a single personal federal income tax return between 1993 and 2006 in spite of receiving millions of dollars in income from sources such as Power Development Co. LLC (PDC), an energy company that he founded and controlled. In addition, in 1999, Armitage was required to repay more than $1 million to PDC for money that he had misappropriated, including approximately $340,000 in checks that he had written to himself but fraudulently mislabeled in PDC’s check register as payable to others.
From February 2001 to April 24, 2006, Armitage executed a scheme to defraud United Bank, located in West Springfield, Mass., in connection with three separate loans. According to court documents, Armitage used or submitted various false or fraudulent documents to perpetrate these fraud schemes, including a 2001 personal financial statement that omitted any debts owed to the IRS or to PDC and on which he claimed that his taxes were settled through 1999, and a 2001 personal federal income tax return that he signed and dated but never filed with the IRS.
In addition, between Aug. 20, 2001, and Oct. 18, 2006, Armitage attempted to avoid paying taxes that had been previously assessed for three separate years: 1995, 1996 and 1998. Armitage engaged in several efforts to avoid paying taxes for these years. He withheld material information from his tax representative. He directed his tax representative to contact an IRS Revenue Officer and claim that delinquent returns would be filed, when he did not intend to provide the tax representative with the information to prepare the returns. He made materially false statements to an IRS Revenue Officer. He purposely withdrew funds recently deposited in his bank account to maintain a low account balance. He diverted payments due to himself to other accounts, including his wife’s bank account, the bank account of another company that he controlled, and an escrow account belonging to another person. Finally, he used funds from an account that he controlled to pay credit cards issued in his name, all to conceal income and avoid collection.
In another scheme, from Nov. 30, 2004, through at least July 5, 2006, Armitage conspired with co-defendants EV Worldwide LLC (EVW), a company that he controlled, and Christopher Willson, another executive of EVW, to defraud the Federal Transit Administration. According to court documents, Armitage and his co-defendants submitted false, fraudulent and fictitious invoices for payment through the Pioneer Valley Transit Authority as part of a federal research grant into an electric bus and battery project. On these invoices, Armitage falsely claimed that the Federal Transit Administration’s share of the project costs did not exceed the maximum 50 percent. He also sought reimbursement for fictitious, inflated or ineligible expenses, and/or falsely claimed that certain milestone achievements warranted payment of EVW Worldwide’s claimed expenses. Through the fraudulent invoices, Armitage, Willson and EVW received $703,097 to which they were not entitled, and used this money for their own benefit as well as the benefit of another company that Armitage and Willson founded in Canada. After the Department of Transportation, Office of Inspector General commenced an audit in 2006, Armitage repeatedly lied to and attempted to obstruct the auditors.
Willson, who was convicted at trial in June 2011 on one count of conspiracy to defraud the United States and to commit wire fraud, six counts of wire fraud and four counts of false claims, is scheduled to be sentenced on Nov. 29, 2011, at 2:30 p.m.
The case investigated by IRS-CI and the DOT-OIG. The Defense Contract Audit Agency also assisted with the investigation. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow for the District of Massachusetts; Senior Litigation Counsel William M. Welch II of the Justice Department’s Criminal Division; and Trial Attorneys Kevin Driscoll and Edward J. Loya Jr. of the Criminal Division’s Public Integrity Section.”
Saturday, November 26, 2011
FAMILY CHARGED WITH PLAYING THE PONZ GAME INSTEAD OF MONOPOLY
The following excerpt is from the SEC website:
“On November 18, 2011, the Securities and Exchange Commission charged a Bethesda, Md. man and several family members and friends with conducting a multi-million dollar Ponzi scheme targeting investors in the Washington D.C. metropolitan area.
The SEC alleges that Garfield M. Taylor lured primarily middle-class residents in his community with little to no investing experience to invest in promissory notes issued by his two companies that engaged in purportedly low-risk options trading. Taylor urged investors to refinance their homes and use any available means to invest, including their personal savings and retirement funds. The SEC alleges that he promised returns as high as 20 percent per year and falsely assured investors that their investments would be protected by a “reserve account” or that he would employ a “covered call” trading strategy that would not touch the principal amount of their investment.
According to the SEC’s complaint filed in federal court in Washington D.C., Taylor and his companies instead engaged in very high-risk, speculative options trading and suffered massive losses. Taylor relied upon money from new investors to pay returns to earlier investors in typical Ponzi scheme fashion. The SEC’s complaint also alleges that he siphoned off $5 million in investor funds to pay family and friends and for other personal uses, including $73,000 to the private school his children attended.
The SEC alleges that the Ponzi scheme defrauded more than $27 million from approximately 130 investors from 2005 to 2010. The scheme ultimately collapsed in the fall of 2010 when the companies’ accounts were depleted by the trading losses and interest payments to investors.
The SEC’s complaint charged Taylor’s companies Garfield Taylor Inc. and Gibraltar Asset Management Group LLC – which were not registered with the SEC – as well as five collaborators in Taylor’s scheme:
Maurice G. Taylor of Bowie, Md., who is the brother of Garfield Taylor. He is the Chief Investment Officer at Gibraltar and worked as a trader for Garfield Taylor Inc.
Randolph M. Taylor of Washington D.C., who is the nephew of Garfield Taylor. He was formerly the Vice President for Organizational Development at Gibraltar.
Benjamin C. Dalley of Washington D.C., who is the childhood friend and business partner of Randolph Taylor. He was formerly Vice President of Operations at Gibraltar.
Jeffrey A. King of Upper Marlboro, Md., whose sister is married to Maurice Taylor. He was a former independent contractor for Garfield Taylor Inc. and former President and Chief Operating Officer of Gibraltar.
William B. Mitchell of Middle River, Md., who was formerly Vice President for Finance at Garfield Taylor Inc. and former Executive Vice President of Strategic Planning at Gibraltar.
According to the SEC’s complaint, Garfield Taylor and the others jointly prepared and finalized a Gibraltar PowerPoint presentation for prospective investors that was riddled with false and misleading statements. They misrepresented the nature of the company’s options trading strategy, the anticipated rate of return, the protections offered by its outside accountant, and the overall level of risk involved in an investment with Gibraltar. They pitched the PowerPoint presentation to potential institutional investors and charitable organizations, including a Washington D.C.-based children’s charity and a Baptist church in Maryland. Garfield Taylor went so far as to provide the Baptist church with a fake “letter of recommendation” from Charles Schwab as he pitched the investment opportunity.
The SEC alleges that in order to maintain a steady flow of new investor money, Garfield Taylor induced current investors and others including King and Mitchell to solicit and refer new investors to him in exchange for commission payments based on the amounts invested. Garfield Taylor, who was not a licensed securities broker, persuaded several individuals to give him online access to their personal brokerage accounts so he could place trades and share in any profits generated.
The SEC’s complaint charges Garfield Taylor, Inc., Gibraltar Asset Management Group LLC, Garfield Taylor, Dalley, King, and Randolph Taylor with violations of Sections 17(a) of the Securities Act of 1933 (“Securities Act”). The SEC’s complaint also charges those defendants and Maurice Taylor with violating or aiding and abetting violations of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. It also alleges that Garfield Taylor violated Sections 206(1), (2) and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The SEC’s complaint also charges Garfield Taylor, Inc., Gibraltar Asset Management Group, LLC, and Garfield Taylor with violations of Sections 5(a) and 5(c) of the Securities Act. The SEC’s complaint also alleges that Garfield Taylor, King, and Mitchell violated Section 15(a) of the Exchange Act. The SEC seeks a judgment permanently enjoining the defendants from future violations of the relevant provisions of the federal securities laws and ordering them to pay penalties and disgorgement with prejudgment interest. The SEC also named three companies belonging to Randolph Taylor, Dalley, King, and Mitchell as relief defendants for the purposes of seeking disgorgement with prejudgment interest of investor funds.”
“On November 18, 2011, the Securities and Exchange Commission charged a Bethesda, Md. man and several family members and friends with conducting a multi-million dollar Ponzi scheme targeting investors in the Washington D.C. metropolitan area.
The SEC alleges that Garfield M. Taylor lured primarily middle-class residents in his community with little to no investing experience to invest in promissory notes issued by his two companies that engaged in purportedly low-risk options trading. Taylor urged investors to refinance their homes and use any available means to invest, including their personal savings and retirement funds. The SEC alleges that he promised returns as high as 20 percent per year and falsely assured investors that their investments would be protected by a “reserve account” or that he would employ a “covered call” trading strategy that would not touch the principal amount of their investment.
According to the SEC’s complaint filed in federal court in Washington D.C., Taylor and his companies instead engaged in very high-risk, speculative options trading and suffered massive losses. Taylor relied upon money from new investors to pay returns to earlier investors in typical Ponzi scheme fashion. The SEC’s complaint also alleges that he siphoned off $5 million in investor funds to pay family and friends and for other personal uses, including $73,000 to the private school his children attended.
The SEC alleges that the Ponzi scheme defrauded more than $27 million from approximately 130 investors from 2005 to 2010. The scheme ultimately collapsed in the fall of 2010 when the companies’ accounts were depleted by the trading losses and interest payments to investors.
The SEC’s complaint charged Taylor’s companies Garfield Taylor Inc. and Gibraltar Asset Management Group LLC – which were not registered with the SEC – as well as five collaborators in Taylor’s scheme:
Maurice G. Taylor of Bowie, Md., who is the brother of Garfield Taylor. He is the Chief Investment Officer at Gibraltar and worked as a trader for Garfield Taylor Inc.
Randolph M. Taylor of Washington D.C., who is the nephew of Garfield Taylor. He was formerly the Vice President for Organizational Development at Gibraltar.
Benjamin C. Dalley of Washington D.C., who is the childhood friend and business partner of Randolph Taylor. He was formerly Vice President of Operations at Gibraltar.
Jeffrey A. King of Upper Marlboro, Md., whose sister is married to Maurice Taylor. He was a former independent contractor for Garfield Taylor Inc. and former President and Chief Operating Officer of Gibraltar.
William B. Mitchell of Middle River, Md., who was formerly Vice President for Finance at Garfield Taylor Inc. and former Executive Vice President of Strategic Planning at Gibraltar.
According to the SEC’s complaint, Garfield Taylor and the others jointly prepared and finalized a Gibraltar PowerPoint presentation for prospective investors that was riddled with false and misleading statements. They misrepresented the nature of the company’s options trading strategy, the anticipated rate of return, the protections offered by its outside accountant, and the overall level of risk involved in an investment with Gibraltar. They pitched the PowerPoint presentation to potential institutional investors and charitable organizations, including a Washington D.C.-based children’s charity and a Baptist church in Maryland. Garfield Taylor went so far as to provide the Baptist church with a fake “letter of recommendation” from Charles Schwab as he pitched the investment opportunity.
The SEC alleges that in order to maintain a steady flow of new investor money, Garfield Taylor induced current investors and others including King and Mitchell to solicit and refer new investors to him in exchange for commission payments based on the amounts invested. Garfield Taylor, who was not a licensed securities broker, persuaded several individuals to give him online access to their personal brokerage accounts so he could place trades and share in any profits generated.
The SEC’s complaint charges Garfield Taylor, Inc., Gibraltar Asset Management Group LLC, Garfield Taylor, Dalley, King, and Randolph Taylor with violations of Sections 17(a) of the Securities Act of 1933 (“Securities Act”). The SEC’s complaint also charges those defendants and Maurice Taylor with violating or aiding and abetting violations of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. It also alleges that Garfield Taylor violated Sections 206(1), (2) and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The SEC’s complaint also charges Garfield Taylor, Inc., Gibraltar Asset Management Group, LLC, and Garfield Taylor with violations of Sections 5(a) and 5(c) of the Securities Act. The SEC’s complaint also alleges that Garfield Taylor, King, and Mitchell violated Section 15(a) of the Exchange Act. The SEC seeks a judgment permanently enjoining the defendants from future violations of the relevant provisions of the federal securities laws and ordering them to pay penalties and disgorgement with prejudgment interest. The SEC also named three companies belonging to Randolph Taylor, Dalley, King, and Mitchell as relief defendants for the purposes of seeking disgorgement with prejudgment interest of investor funds.”
Friday, November 25, 2011
DETROIT FOOT DOCTOR PLEADS GUILTY IN MEDICARE FRAUD CASE
The following excerpt is from the Deparment of Justice website:
Tuesday, November 22, 2011
Detroit-Area Foot Doctor Pleads Guilty to Medicare Fraud Scheme
WASHINGTON – A Detroit-area foot doctor pleaded guilty today for his participation in a Medicare fraud scheme, announced the Department of Justice, FBI and the Department of Health and Human Services (HHS).
Errol Sherman pleaded guilty before U.S. District Judge Gerald E. Rosen in the Eastern District of Michigan to one count of health care fraud. At sentencing, Sherman faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to the plea documents, Sherman is a Doctor of Podiatric Medicine licensed in the State of Michigan. Between January 2003 and December 2006, Sherman billed Medicare and Blue Cross Blue Shield of Michigan for a procedure known as an “avulsion of the nail plate” or “nail avulsion” procedure. Sherman billed for this procedure thousands of times with respect to hundreds of beneficiaries during that time period. According to court documents, Medicare was billed by Sherman for nail avulsion procedures that were never rendered.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section and Assistant U.S. Attorney John K. Neal of the Eastern District of Michigan. 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 Eastern District of Michigan.
Since their inception in March 2007, the Medicare Fraud Strike Force operations in nine districts have charged more than 1,140 individuals who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Tuesday, November 22, 2011
Detroit-Area Foot Doctor Pleads Guilty to Medicare Fraud Scheme
WASHINGTON – A Detroit-area foot doctor pleaded guilty today for his participation in a Medicare fraud scheme, announced the Department of Justice, FBI and the Department of Health and Human Services (HHS).
Errol Sherman pleaded guilty before U.S. District Judge Gerald E. Rosen in the Eastern District of Michigan to one count of health care fraud. At sentencing, Sherman faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to the plea documents, Sherman is a Doctor of Podiatric Medicine licensed in the State of Michigan. Between January 2003 and December 2006, Sherman billed Medicare and Blue Cross Blue Shield of Michigan for a procedure known as an “avulsion of the nail plate” or “nail avulsion” procedure. Sherman billed for this procedure thousands of times with respect to hundreds of beneficiaries during that time period. According to court documents, Medicare was billed by Sherman for nail avulsion procedures that were never rendered.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section and Assistant U.S. Attorney John K. Neal of the Eastern District of Michigan. 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 Eastern District of Michigan.
Since their inception in March 2007, the Medicare Fraud Strike Force operations in nine districts have charged more than 1,140 individuals who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Wednesday, November 23, 2011
GANG MEMBERS AND SUPPORTING POLICE OFFICERS UNDER INDICTMENT
The following excerpt comes from the Department of Justice website:
Friday, November 18, 2011
"Fifteen Additional Alleged Members or Associates of the Almighty Latin Kings and Queen Nation, Including Current and Former Chicago Police Officers, Charged with Racketeering Conspiracy and Other Related Crimes
WASHINGTON – Fifteen alleged members or associates of the Almighty Latin Kings and Queen Nation (Latin Kings) have been indicted for their alleged roles in a racketeering conspiracy in Hammond, Ind., and elsewhere, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana.
The 15-count third superseding indictment returned by the federal grand jury on Nov. 16, 2011, and unsealed today in Hammond includes 15 new defendants who are charged with conspiracy to engage in racketeering activity from August 1989 until the date of the third superseding indictment. Also included in the third superseding indictment is one new count of conspiracy to murder in aid of racketeering activity against Brandon Clay, 24, aka “Cheddar,” “Swiss,” “Slick,” 24, of Chicago, who was charged previously in the indictment.
“The indictment unsealed today alleges that members of the Latin Kings across the Midwestern United States engaged in a years-long pattern of violence, including numerous murders, to control their territory and fund their illicit activities,” said Assistant Attorney General Breuer. “The indictment also alleges that two Chicago police officers assisted the Latin Kings in carrying out their crimes. Corruption of the kind alleged here is shocking, and cannot be tolerated. We will continue doing everything in our power to stop gang violence, and hold those responsible – including any public officials involved – to account. ”
“The gang and violent crime problem in this area is a regional problem that crosses state lines as well as city and town boundaries,” said U.S. Attorney Capp. “This indictment is the result of a regional cooperative federal-local law enforcement effort. We will continue thisregional effort and we will continue to focus on criminal street gangs.”
Nine individuals were taken into custody today and made their initial appearances before U.S. Magistrate Judge Andrew P. Rodovich in federal court in Hammond. Nine individuals, including three newly charged in the third superseding indictment, already were in the custody of law enforcement and will be arraigned before Judge Rodovich on a later date.
The third superseding indictment alleges that the Latin Kings gang was responsible for at least 19 murders, including juveniles and one pregnant woman, in the Chicago/Northwest Indiana area and Big Spring, Texas.
The third superseding indictment also alleges that Guerrero and Martinez, while employed as officers with the Chicago Police Department, committed armed robberies on behalf of Bernal, in some instances while in uniform and driving Chicago Police Department-issued vehicles. The indictment alleges that on one occasion, Guerrero and Martinez were assisted by Chavez, a Latin Kings member, during which time they robbed between $30,000 and $40,000 in drug proceeds. The indictment alleges Guerrero and Martinez stole drugs and weapons in addition to cash. In certain instances, Guerrero and Martinez allegedly were given a portion of the funds they stole as payment for committing the armed robberies.
In addition to the alleged acts of violence, the superseding indictment also alleges that the Latin Kings distributed more than 150 kilograms of cocaine and 1,000 kilograms of marijuana. The indictment also seeks forfeiture.
According to the third superseding indictment, the Latin Kings is a nationwide gang that originated in Chicago and has branched out throughout the United States, including to Texas. The Latin Kings is a well organized street gang that has specific leadership and is comprised of regions that include multiple chapters.
As alleged in the third superseding indictment, the Latin Kings enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault and threats against those who violate the rules or pose a threat to the Latin Kings. Members are required to follow the orders of higher-ranking members, including taking on assignments often referred to as “missions.”
This case is being investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; Immigration and Customs Enforcement; the National Gang Targeting, Enforcement & Coordination Center (GangTECC); the National Gang Intelligence Center; the Chicago Police Department; the Griffith Police Department; the Highland Police Department; the Hammond Police Department; and the Houston Police Department.
The case is being prosecuted by Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section and David Nozick of the U.S. Attorney’s Office for the Northern District of Indiana.
The third superseding indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Friday, November 18, 2011
"Fifteen Additional Alleged Members or Associates of the Almighty Latin Kings and Queen Nation, Including Current and Former Chicago Police Officers, Charged with Racketeering Conspiracy and Other Related Crimes
WASHINGTON – Fifteen alleged members or associates of the Almighty Latin Kings and Queen Nation (Latin Kings) have been indicted for their alleged roles in a racketeering conspiracy in Hammond, Ind., and elsewhere, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana.
The 15-count third superseding indictment returned by the federal grand jury on Nov. 16, 2011, and unsealed today in Hammond includes 15 new defendants who are charged with conspiracy to engage in racketeering activity from August 1989 until the date of the third superseding indictment. Also included in the third superseding indictment is one new count of conspiracy to murder in aid of racketeering activity against Brandon Clay, 24, aka “Cheddar,” “Swiss,” “Slick,” 24, of Chicago, who was charged previously in the indictment.
“The indictment unsealed today alleges that members of the Latin Kings across the Midwestern United States engaged in a years-long pattern of violence, including numerous murders, to control their territory and fund their illicit activities,” said Assistant Attorney General Breuer. “The indictment also alleges that two Chicago police officers assisted the Latin Kings in carrying out their crimes. Corruption of the kind alleged here is shocking, and cannot be tolerated. We will continue doing everything in our power to stop gang violence, and hold those responsible – including any public officials involved – to account. ”
“The gang and violent crime problem in this area is a regional problem that crosses state lines as well as city and town boundaries,” said U.S. Attorney Capp. “This indictment is the result of a regional cooperative federal-local law enforcement effort. We will continue thisregional effort and we will continue to focus on criminal street gangs.”
Nine individuals were taken into custody today and made their initial appearances before U.S. Magistrate Judge Andrew P. Rodovich in federal court in Hammond. Nine individuals, including three newly charged in the third superseding indictment, already were in the custody of law enforcement and will be arraigned before Judge Rodovich on a later date.
The third superseding indictment alleges that the Latin Kings gang was responsible for at least 19 murders, including juveniles and one pregnant woman, in the Chicago/Northwest Indiana area and Big Spring, Texas.
The third superseding indictment also alleges that Guerrero and Martinez, while employed as officers with the Chicago Police Department, committed armed robberies on behalf of Bernal, in some instances while in uniform and driving Chicago Police Department-issued vehicles. The indictment alleges that on one occasion, Guerrero and Martinez were assisted by Chavez, a Latin Kings member, during which time they robbed between $30,000 and $40,000 in drug proceeds. The indictment alleges Guerrero and Martinez stole drugs and weapons in addition to cash. In certain instances, Guerrero and Martinez allegedly were given a portion of the funds they stole as payment for committing the armed robberies.
In addition to the alleged acts of violence, the superseding indictment also alleges that the Latin Kings distributed more than 150 kilograms of cocaine and 1,000 kilograms of marijuana. The indictment also seeks forfeiture.
According to the third superseding indictment, the Latin Kings is a nationwide gang that originated in Chicago and has branched out throughout the United States, including to Texas. The Latin Kings is a well organized street gang that has specific leadership and is comprised of regions that include multiple chapters.
As alleged in the third superseding indictment, the Latin Kings enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault and threats against those who violate the rules or pose a threat to the Latin Kings. Members are required to follow the orders of higher-ranking members, including taking on assignments often referred to as “missions.”
This case is being investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; Immigration and Customs Enforcement; the National Gang Targeting, Enforcement & Coordination Center (GangTECC); the National Gang Intelligence Center; the Chicago Police Department; the Griffith Police Department; the Highland Police Department; the Hammond Police Department; and the Houston Police Department.
The case is being prosecuted by Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section and David Nozick of the U.S. Attorney’s Office for the Northern District of Indiana.
The third superseding indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Tuesday, November 22, 2011
MADOFF FORMER EMPLOYEE CHARGED BY SEC FOR ROLE IN PONZI SCHEME
The following excerpt is from the SEC website:
“Washington, D.C., Nov. 21, 2011 – The Securities and Exchange Commission today charged a longtime Bernie Madoff employee with fraud for his role in creating fake trades to facilitate the massive Ponzi scheme.
The SEC alleges that David Kugel, who worked at Bernard L. Madoff Investment Securities LLC (BMIS) for nearly four decades, was asked by Madoff to provide the firm’s investment advisory operations with backdated arbitrage trade information to be formulated into fictitious trading on investors’ account statements. Kugel’s own account at BMIS was among those in which backdated trades were entered, and he withdrew nearly $10 million in “profits” from the fictitious trading over several years.
"Kugel helped Madoff maintain the elaborate and enduring facade that his clients were engaged in actual trading when in fact no such trading occurred," said George S. Canellos, Director of the SEC's New York Regional Office. "Kugel withdrew millions of dollars of phony profits that he knew weren't from actual trading activity."
The SEC previously charged two other longtime Madoff employees Annette Bongiorno and JoAnn Crupi for their roles in producing phony account statements that were sent to Madoff investors. According to the SEC’s complaint against Kugel filed in U.S. District Court for the Southern District of New York, Bongiorno and Crupi and other staff in Madoff’s investment advisory (IA) operations used the information provided by Kugel to formulate fictitious trades to appear on investor account statements.
The SEC alleges that sometime in the early 1970s after Kugel began his career with Madoff as an arbitrage trader in the firm’s proprietary trading business, Madoff informed Kugel that BMIS managed money for outside clients. He asked Kugel to provide the firm’s IA operations with backdated convertible arbitrage trades for inclusion on investor account statements. Some of these trades replicated successful trades that Kugel had actually made for BMIS proprietary trading operations. Other trades were based on historical information that Kugel obtained from old newspapers.
According to the SEC’s complaint, Bongiorno and Crupi regularly asked Kugel for backdated information about trades amounting to millions of dollars. After Kugel provided the information, Crupi and Bongiorno would then design trades that totaled that amount. These fictitious trades were highly profitable on an annualized basis, and appeared on account statements and trade confirmations sent to investors. Kugel, who opened his own BMIS account, received these account statements and trade confirmations as well.
The SEC alleges that Kugel provided backdated trade information for IA accounts, including his own. He withdrew the purported “profits” of these trades even though he knew they weren’t proceeds of actual trading activity. One trade in S&P index options in 2007 earned Kugel a profit of more than $375,000 in just a few weeks. Kugel withdrew almost $10 million from his BMIS IA accounts from 2001 to 2008.
The U.S. Attorney’s Office for the Southern District of New York has filed parallel criminal charges against Kugel, who has pled guilty and also agreed to settle the SEC’s civil charges. Subject to court approval, the civil case will result in a permanent injunction against Kugel, who must forfeit his ill-gotten monetary gains upon entry of a criminal forfeiture order in the criminal case.
The SEC’s complaint against Kugel alleges that by engaging in this conduct, Kugel violated and aided and abetted violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; aided and abetted violations of Sections 204, 206(1) and 206(2) of the Investment Advisers Act of 1940 and Rule 204-2 thereunder, and Sections 15(c) and 17(a) of the Exchange Act and Rules 10b-3 and 17a-3 thereunder.
The SEC’s investigation was conducted by Kristine M. Zaleskas and Aaron P. Arnzen of the New York Regional Office. The Commission thanks the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation for its coordination and assistance. The SEC’s investigation is continuing.”
“Washington, D.C., Nov. 21, 2011 – The Securities and Exchange Commission today charged a longtime Bernie Madoff employee with fraud for his role in creating fake trades to facilitate the massive Ponzi scheme.
The SEC alleges that David Kugel, who worked at Bernard L. Madoff Investment Securities LLC (BMIS) for nearly four decades, was asked by Madoff to provide the firm’s investment advisory operations with backdated arbitrage trade information to be formulated into fictitious trading on investors’ account statements. Kugel’s own account at BMIS was among those in which backdated trades were entered, and he withdrew nearly $10 million in “profits” from the fictitious trading over several years.
"Kugel helped Madoff maintain the elaborate and enduring facade that his clients were engaged in actual trading when in fact no such trading occurred," said George S. Canellos, Director of the SEC's New York Regional Office. "Kugel withdrew millions of dollars of phony profits that he knew weren't from actual trading activity."
The SEC previously charged two other longtime Madoff employees Annette Bongiorno and JoAnn Crupi for their roles in producing phony account statements that were sent to Madoff investors. According to the SEC’s complaint against Kugel filed in U.S. District Court for the Southern District of New York, Bongiorno and Crupi and other staff in Madoff’s investment advisory (IA) operations used the information provided by Kugel to formulate fictitious trades to appear on investor account statements.
The SEC alleges that sometime in the early 1970s after Kugel began his career with Madoff as an arbitrage trader in the firm’s proprietary trading business, Madoff informed Kugel that BMIS managed money for outside clients. He asked Kugel to provide the firm’s IA operations with backdated convertible arbitrage trades for inclusion on investor account statements. Some of these trades replicated successful trades that Kugel had actually made for BMIS proprietary trading operations. Other trades were based on historical information that Kugel obtained from old newspapers.
According to the SEC’s complaint, Bongiorno and Crupi regularly asked Kugel for backdated information about trades amounting to millions of dollars. After Kugel provided the information, Crupi and Bongiorno would then design trades that totaled that amount. These fictitious trades were highly profitable on an annualized basis, and appeared on account statements and trade confirmations sent to investors. Kugel, who opened his own BMIS account, received these account statements and trade confirmations as well.
The SEC alleges that Kugel provided backdated trade information for IA accounts, including his own. He withdrew the purported “profits” of these trades even though he knew they weren’t proceeds of actual trading activity. One trade in S&P index options in 2007 earned Kugel a profit of more than $375,000 in just a few weeks. Kugel withdrew almost $10 million from his BMIS IA accounts from 2001 to 2008.
The U.S. Attorney’s Office for the Southern District of New York has filed parallel criminal charges against Kugel, who has pled guilty and also agreed to settle the SEC’s civil charges. Subject to court approval, the civil case will result in a permanent injunction against Kugel, who must forfeit his ill-gotten monetary gains upon entry of a criminal forfeiture order in the criminal case.
The SEC’s complaint against Kugel alleges that by engaging in this conduct, Kugel violated and aided and abetted violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; aided and abetted violations of Sections 204, 206(1) and 206(2) of the Investment Advisers Act of 1940 and Rule 204-2 thereunder, and Sections 15(c) and 17(a) of the Exchange Act and Rules 10b-3 and 17a-3 thereunder.
The SEC’s investigation was conducted by Kristine M. Zaleskas and Aaron P. Arnzen of the New York Regional Office. The Commission thanks the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation for its coordination and assistance. The SEC’s investigation is continuing.”
Monday, November 21, 2011
CPA PLEADS GUILTY TO PART IN $670 MILLION DOLLAR FRAUD
The following excerpt is from the Department of Justice website:
The following excerpt is from the Department of Justice website:
Monday, November 21, 2011
"WASHINGTON – A certified public accountant (CPA) and purported outside auditor for Provident Capital Indemnity Ltd. (PCI) pleaded guilty today for his role in a $670 million fraud scheme involving victims throughout the United States and abroad.
The guilty plea was announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
“Mr. Castillo used his position as a CPA to give PCI an air of legitimacy that provided their clients the peace of mind to invest millions,” said U.S. Attorney MacBride. “Auditors stand as a gatekeeper to fraud, and we are aggressively pursuing those who abuse their position to facilitate the fraud rather than take steps to put a stop to it. I want to commend the outstanding work of the Virginia Securities and Financial Fraud Task Force for detecting and disrupting this massive, ongoing international fraud before the scheme victimized even more investors.”
“Mr. Castillo played an integral role in a multi-million dollar fraud scheme that harmed investors throughout the United States and abroad,” said Assistant Attorney General Breuer. “Trading on his qualification as a CPA, he created false documents that concealed the true nature of PCI’s operations. We are determined to continue holding accountable those who commit financial fraud, and prey upon unsuspecting investors.”
Jorge Luis Castillo, 56, a resident of New Jersey, pleaded guilty before U.S. District Judge John A. Gibney in the Eastern District of Virginia to conspiring to commit mail and wire fraud, which carries a maximum penalty of 20 years in prison. Castillo is scheduled to be sentenced on May 22, 2012.
According to a statement of facts filed with Castillo’s plea agreement, PCI was an insurance and reinsurance company registered in the Commonwealth of Dominica and doing business in Costa Rica. PCI sold financial guarantee bonds to companies selling life settlements, or securities backed by life settlements, to investors. These bonds were marketed to PCI’s clients as a way to alleviate the risk of insured beneficiaries living beyond their life expectancy. The clients, in turn, typically explained to their investors that the financial guarantee bonds ensured that the investors would receive their expected return on investment irrespective of whether the insured on the underlying life settlement lived beyond his or her life expectancy.
Castillo admitted today that he conspired with Minor Vargas Calvo, 60, the president and majority owner of PCI, to prepare audited financial statements that falsely claimed that PCI had entered into reinsurance contracts with major reinsurance companies. These claims, which were supported by a letter from Castillo stating that he conducted an audit of PCI’s financial records, were used to assure PCI’s clients that the reinsurance companies were backstopping the majority of the risk that PCI had insured through its financial guarantee bonds.
Castillo admitted that he never performed an audit of PCI’s financial statements and that, in fact, he personally created the statements he claimed to be independently auditing. He also admitted that he and others at PCI knew that the company never actually entered into reinsurance contracts with any major companies. Castillo also admitted that he and other conspirators provided the false financial statements and fraudulent independent auditors’ report to Dun & Bradstreet (D&B), which D&B relied on in compiling its commercial reports on PCI and issuing its 5A rating of PCI’s financial strength.
From 2004 through 2010, PCI sold approximately $670 million of bonds to life settlement investment companies located in various countries, including the United States, the Netherlands, Germany and Canada. PCI’s clients, in turn, sold investment offerings backed by PCI’s bonds to thousands of investors around the world. Purchasers of PCI’s bonds were allegedly required to make up-front payments of six to 11 percent of the underlying settlement as “premium” payments to PCI before the company would issue the bonds.
Court records state that Castillo received approximately $84,000 from his work as the purported outside auditor of PCI from 2004 through 2010.
Vargas, a citizen and resident of Costa Rica, and PCI were charged in a superseding indictment on Oct. 5, 2011, with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. Vargas was also charged with three counts of money laundering. Vargas was arrested on Jan. 19, 2011, at the John F. Kennedy International Airport in New York, and has been incarcerated pending trial, scheduled to be held on Feb. 13, 2012. An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted.
This continuing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service and FBI, with assistance from the Virginia State Corporation Commission, the Texas State Securities Board and the New Jersey Bureau of Securities. This case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg of the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr. of the Fraud Section in the Justice Department’s Criminal Division.
The U.S. Securities and Exchange Commission (SEC) conducted a parallel investigation and in January 2011 filed a parallel civil enforcement action against PCI, Vargas and Castillo. The department thanks the SEC for its assistance in this matter.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia specifically. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes."
The following excerpt is from the Department of Justice website:
Monday, November 21, 2011
"WASHINGTON – A certified public accountant (CPA) and purported outside auditor for Provident Capital Indemnity Ltd. (PCI) pleaded guilty today for his role in a $670 million fraud scheme involving victims throughout the United States and abroad.
The guilty plea was announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
“Mr. Castillo used his position as a CPA to give PCI an air of legitimacy that provided their clients the peace of mind to invest millions,” said U.S. Attorney MacBride. “Auditors stand as a gatekeeper to fraud, and we are aggressively pursuing those who abuse their position to facilitate the fraud rather than take steps to put a stop to it. I want to commend the outstanding work of the Virginia Securities and Financial Fraud Task Force for detecting and disrupting this massive, ongoing international fraud before the scheme victimized even more investors.”
“Mr. Castillo played an integral role in a multi-million dollar fraud scheme that harmed investors throughout the United States and abroad,” said Assistant Attorney General Breuer. “Trading on his qualification as a CPA, he created false documents that concealed the true nature of PCI’s operations. We are determined to continue holding accountable those who commit financial fraud, and prey upon unsuspecting investors.”
Jorge Luis Castillo, 56, a resident of New Jersey, pleaded guilty before U.S. District Judge John A. Gibney in the Eastern District of Virginia to conspiring to commit mail and wire fraud, which carries a maximum penalty of 20 years in prison. Castillo is scheduled to be sentenced on May 22, 2012.
According to a statement of facts filed with Castillo’s plea agreement, PCI was an insurance and reinsurance company registered in the Commonwealth of Dominica and doing business in Costa Rica. PCI sold financial guarantee bonds to companies selling life settlements, or securities backed by life settlements, to investors. These bonds were marketed to PCI’s clients as a way to alleviate the risk of insured beneficiaries living beyond their life expectancy. The clients, in turn, typically explained to their investors that the financial guarantee bonds ensured that the investors would receive their expected return on investment irrespective of whether the insured on the underlying life settlement lived beyond his or her life expectancy.
Castillo admitted today that he conspired with Minor Vargas Calvo, 60, the president and majority owner of PCI, to prepare audited financial statements that falsely claimed that PCI had entered into reinsurance contracts with major reinsurance companies. These claims, which were supported by a letter from Castillo stating that he conducted an audit of PCI’s financial records, were used to assure PCI’s clients that the reinsurance companies were backstopping the majority of the risk that PCI had insured through its financial guarantee bonds.
Castillo admitted that he never performed an audit of PCI’s financial statements and that, in fact, he personally created the statements he claimed to be independently auditing. He also admitted that he and others at PCI knew that the company never actually entered into reinsurance contracts with any major companies. Castillo also admitted that he and other conspirators provided the false financial statements and fraudulent independent auditors’ report to Dun & Bradstreet (D&B), which D&B relied on in compiling its commercial reports on PCI and issuing its 5A rating of PCI’s financial strength.
From 2004 through 2010, PCI sold approximately $670 million of bonds to life settlement investment companies located in various countries, including the United States, the Netherlands, Germany and Canada. PCI’s clients, in turn, sold investment offerings backed by PCI’s bonds to thousands of investors around the world. Purchasers of PCI’s bonds were allegedly required to make up-front payments of six to 11 percent of the underlying settlement as “premium” payments to PCI before the company would issue the bonds.
Court records state that Castillo received approximately $84,000 from his work as the purported outside auditor of PCI from 2004 through 2010.
Vargas, a citizen and resident of Costa Rica, and PCI were charged in a superseding indictment on Oct. 5, 2011, with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. Vargas was also charged with three counts of money laundering. Vargas was arrested on Jan. 19, 2011, at the John F. Kennedy International Airport in New York, and has been incarcerated pending trial, scheduled to be held on Feb. 13, 2012. An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted.
This continuing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service and FBI, with assistance from the Virginia State Corporation Commission, the Texas State Securities Board and the New Jersey Bureau of Securities. This case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg of the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr. of the Fraud Section in the Justice Department’s Criminal Division.
The U.S. Securities and Exchange Commission (SEC) conducted a parallel investigation and in January 2011 filed a parallel civil enforcement action against PCI, Vargas and Castillo. The department thanks the SEC for its assistance in this matter.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia specifically. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes."
Sunday, November 20, 2011
DETROIT MAN ARRESTED FOR $30 MILLION HOME HEALTH CARE MEDICARE FRAUD SCHEME
Thursday, November 3, 2011
The following is an excerpt from the SEC website:
“WASHINGTON – A Detroit-area resident was charged and arrested today in the Eastern District of Michigan for his alleged leading role in a $30 million Medicare fraud scheme involving home health services, announced the Department of Justice, the Department of Health and Human Services (HHS), the FBI and the HHS-Office of Inspector General (OIG). In addition to the arrest, law enforcement agents executed search warrants at five locations, seizure warrants for 31 bank accounts related to the scheme and suspended Medicare payments to 16 health care companies associated with the scheme.
According to a criminal complaint unsealed today in U.S. District Court in Detroit, Zafar Mehmood, 45, allegedly masterminded a $30 million scheme involving the submission of fraudulent claims submitted to Medicare for services that were medically unnecessary and/or never provided through at least four home health agencies. The four home health agencies named in the complaint are Access Care Home Care Inc. and Patient Care Home Care Inc., in Ypsilanti, Mich., and Hands On Healing Home Care Inc. and All State Home Care Inc., in Detroit.
Mehmood is alleged to have paid kickbacks to patient recruiters and billed Medicare for services that were not medically necessary and/or not performed through Access, Patient Care, Hands On Healing and All State. Mehmood is also accused of laundering the proceeds of the scheme through sham companies and intermediaries.
Mehmood is scheduled to make his initial appearance today before U.S. Magistrate Judge Mona K. Majzoub.
Today’s charges were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the HHS-OIG Office of Investigation. Including today’s charges, Medicare Fraud Strike Force operations in Detroit have charged a total of 139 individuals in cases involving approximately $174 million in fraudulent billings to Medicare.
The case is being prosecuted by Trial Attorney Gejaa T. Gobena and Catherine Dick of the Criminal Division’s Fraud Section. The investigations were conducted jointly by the FBI and HHS-OIG, as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Eastern District of Michigan and the Criminal Division’s Fraud Section.
Since their inception in March 2007, the strike force operations in nine districts have charged more than 1,140 individuals who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Criminal complaints contain merely charges and defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.”
The following is an excerpt from the SEC website:
“WASHINGTON – A Detroit-area resident was charged and arrested today in the Eastern District of Michigan for his alleged leading role in a $30 million Medicare fraud scheme involving home health services, announced the Department of Justice, the Department of Health and Human Services (HHS), the FBI and the HHS-Office of Inspector General (OIG). In addition to the arrest, law enforcement agents executed search warrants at five locations, seizure warrants for 31 bank accounts related to the scheme and suspended Medicare payments to 16 health care companies associated with the scheme.
According to a criminal complaint unsealed today in U.S. District Court in Detroit, Zafar Mehmood, 45, allegedly masterminded a $30 million scheme involving the submission of fraudulent claims submitted to Medicare for services that were medically unnecessary and/or never provided through at least four home health agencies. The four home health agencies named in the complaint are Access Care Home Care Inc. and Patient Care Home Care Inc., in Ypsilanti, Mich., and Hands On Healing Home Care Inc. and All State Home Care Inc., in Detroit.
Mehmood is alleged to have paid kickbacks to patient recruiters and billed Medicare for services that were not medically necessary and/or not performed through Access, Patient Care, Hands On Healing and All State. Mehmood is also accused of laundering the proceeds of the scheme through sham companies and intermediaries.
Mehmood is scheduled to make his initial appearance today before U.S. Magistrate Judge Mona K. Majzoub.
Today’s charges were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the HHS-OIG Office of Investigation. Including today’s charges, Medicare Fraud Strike Force operations in Detroit have charged a total of 139 individuals in cases involving approximately $174 million in fraudulent billings to Medicare.
The case is being prosecuted by Trial Attorney Gejaa T. Gobena and Catherine Dick of the Criminal Division’s Fraud Section. The investigations were conducted jointly by the FBI and HHS-OIG, as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Eastern District of Michigan and the Criminal Division’s Fraud Section.
Since their inception in March 2007, the strike force operations in nine districts have charged more than 1,140 individuals who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Criminal complaints contain merely charges and defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.”
Thursday, November 17, 2011
PRESIDENT OF OCEAN FREIGHT COMPANY INDICTIED WHILE FIRM AGREES TO PAY $14.2 MILLION IN FINES
The following is an excerpt from the Department of Justice website:
“WASHINGTON — Sea Star Line LLC has agreed today to plead guilty and to pay a $14.2 million criminal fine for its role in a conspiracy to fix prices in the coastal water freight transportation industry, the Department of Justice announced. Additionally, a federal grand jury in San Juan, Puerto Rico, returned an indictment against Frank Peake, the former president of Sea Star Line, for his role in the same conspiracy.
According to a one-count felony charge filed today in U.S. District Court for the District of Puerto Rico, Sea Star Line, whose principal place of business is in Jacksonville, Fla., engaged in a conspiracy to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico from as early as May 2002, until at least April 2008. According to a one-count indictment filed today in the same district, Peake participated in the conspiracy from at least as early as late 2005, until at least April 2008.
Sea Star Line transports a variety of cargo shipments, such as heavy equipment, perishable food items, medicines and consumer goods, on scheduled ocean voyages between the continental United States and Puerto Rico.
According to the court documents, Sea Star Line, Peake and co-conspirators carried out the conspiracy by agreeing during meetings and communications to allocate customers of Puerto Rico freight services and to rig bids and fix the rates and surcharges to be charged to purchasers of water transportation of freight between the continental United States and Puerto Rico. The department said that Sea Star Line, Peake and co-conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates and sold Puerto Rico freight services at collusive and noncompetitive rates.
In addition to today’s charges, as a result of this investigation, on April 30, 2011, Horizon Lines LLC was sentenced to pay a $15 million criminal fine, and five former shipping executives from both Sea Star Line and Horizon Lines have been sentenced to pay a total of nearly $85,000 in criminal fines and to serve more than 11 years in prison, collectively.
Sea Star Line and Peake are charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million for corporations, and a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charges arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the coastal water freight transportation industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section; the Baltimore Resident Agency of the Department of Defense’s Office of the Inspector General, Defense Criminal Investigative Service (DCIS); the Miami Field Office of the Department of Transportation’s Office of Inspector General; and the Jacksonville Field Office of the FBI."
“WASHINGTON — Sea Star Line LLC has agreed today to plead guilty and to pay a $14.2 million criminal fine for its role in a conspiracy to fix prices in the coastal water freight transportation industry, the Department of Justice announced. Additionally, a federal grand jury in San Juan, Puerto Rico, returned an indictment against Frank Peake, the former president of Sea Star Line, for his role in the same conspiracy.
According to a one-count felony charge filed today in U.S. District Court for the District of Puerto Rico, Sea Star Line, whose principal place of business is in Jacksonville, Fla., engaged in a conspiracy to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico from as early as May 2002, until at least April 2008. According to a one-count indictment filed today in the same district, Peake participated in the conspiracy from at least as early as late 2005, until at least April 2008.
Sea Star Line transports a variety of cargo shipments, such as heavy equipment, perishable food items, medicines and consumer goods, on scheduled ocean voyages between the continental United States and Puerto Rico.
According to the court documents, Sea Star Line, Peake and co-conspirators carried out the conspiracy by agreeing during meetings and communications to allocate customers of Puerto Rico freight services and to rig bids and fix the rates and surcharges to be charged to purchasers of water transportation of freight between the continental United States and Puerto Rico. The department said that Sea Star Line, Peake and co-conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates and sold Puerto Rico freight services at collusive and noncompetitive rates.
In addition to today’s charges, as a result of this investigation, on April 30, 2011, Horizon Lines LLC was sentenced to pay a $15 million criminal fine, and five former shipping executives from both Sea Star Line and Horizon Lines have been sentenced to pay a total of nearly $85,000 in criminal fines and to serve more than 11 years in prison, collectively.
Sea Star Line and Peake are charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million for corporations, and a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charges arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the coastal water freight transportation industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section; the Baltimore Resident Agency of the Department of Defense’s Office of the Inspector General, Defense Criminal Investigative Service (DCIS); the Miami Field Office of the Department of Transportation’s Office of Inspector General; and the Jacksonville Field Office of the FBI."
Tuesday, November 15, 2011
COMPANY PUFFED UP AMOUNT OF ONLINE SERVICES AVAILABLE
The following excerpt is from the SEC website:
“The United States District Court for the Southern District of Florida has entered final judgments against defendants Christopher M. Dubeau and Atlantis Technology Group, enjoining them from violating the antifraud provisions of the federal securities laws. The Court’s final judgments, issued on October 31, 2011, enjoin Dubeau and Atlantis from violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, and also enjoin Dubeau from violations of Section 17(a) of the Securities Act of 1933. In addition to granting injunctive relief, the Court permanently barred Dubeau from participating in an offering of a penny stock and from acting as an officer or director of any public company. The Court also ordered Dubeau to disgorge his ill-gotten gains of $312,000.00, plus prejudgment interest in the amount of $12,947.93, and pay a civil penalty of $100,000.00.November 4, 2011
The Commission’s Complaint against Dubeau and Atlantis, filed September 30, 2010, alleges that from at least August 7, 2009 through April 5, 2010, they issued numerous false press releases claiming, among other things, that Atlantis’ subsidiary, Global Online Television Corporation (GOTV), offered internet protocol television and video phone services to consumers, and claiming that GOTV had relationships with television networks to offer their content to Atlantis subscribers. The Complaint further alleges these claims were not true because, at the time Atlantis issued its press releases, GOTV was not able to offer internet protocol television services to consumers or video phone service, and it did not have relationships with television networks to offer content to its subscribers.”
“The United States District Court for the Southern District of Florida has entered final judgments against defendants Christopher M. Dubeau and Atlantis Technology Group, enjoining them from violating the antifraud provisions of the federal securities laws. The Court’s final judgments, issued on October 31, 2011, enjoin Dubeau and Atlantis from violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, and also enjoin Dubeau from violations of Section 17(a) of the Securities Act of 1933. In addition to granting injunctive relief, the Court permanently barred Dubeau from participating in an offering of a penny stock and from acting as an officer or director of any public company. The Court also ordered Dubeau to disgorge his ill-gotten gains of $312,000.00, plus prejudgment interest in the amount of $12,947.93, and pay a civil penalty of $100,000.00.November 4, 2011
The Commission’s Complaint against Dubeau and Atlantis, filed September 30, 2010, alleges that from at least August 7, 2009 through April 5, 2010, they issued numerous false press releases claiming, among other things, that Atlantis’ subsidiary, Global Online Television Corporation (GOTV), offered internet protocol television and video phone services to consumers, and claiming that GOTV had relationships with television networks to offer their content to Atlantis subscribers. The Complaint further alleges these claims were not true because, at the time Atlantis issued its press releases, GOTV was not able to offer internet protocol television services to consumers or video phone service, and it did not have relationships with television networks to offer content to its subscribers.”
Friday, November 11, 2011
FORMER POLICE LT. SENTENCED TO FOUR YEARS IN PRISON IN DANZIGER BRIDGE CASE
Wednesday, November 2, 2011
Former New Orleans Police Department Lieutenant Sentenced in Connection with Shootings on Danziger Bridge
WASHINGTON – A former lieutenant with the New Orleans Police Department (NOPD), was sentenced today for his role in a conspiracy to obstruct justice and for misprision of a felony (for concealing a known crime), in connection with a federal investigation of two police-involved shootings that left two civilians dead and four others seriously wounded in the area of the Danziger Bridge in the days after Hurricane Katrina.
Michael Lohman, 41, of Terrytown, La., was sentenced in federal court to serve four years in prison, to be followed by three years of supervised release. During the first year of supervised release, Mr. Lohman is to perform 300 hours of community service. Additionally, he has been ordered to meet with NOPD recruit classes to serve as a warning to officers tempted to disobey the law. The court also imposed a $2500 fine. On Feb. 24, 2010, Lohman pleaded guilty in federal court in New Orleans before U. S. District Court Judge Ivan L. R. Lemelle.
Mr. Lohman admitted to helping with the Sept. 4, 2005, cover up and also admitted – first during his guilty plea and later when he testified at the trial of five fellow officers -- that he knew that the shootings on the bridge were unjustified, and that he helped other officers cover up what had happened on the bridge.
When Lohman arrived on the scene shortly after the shootings, he noticed that there were no guns on or near the dead and wounded civilians. After determining that the involved officers could not come up with any evidence to justify the shooting, he concluded that they had been involved in a “bad shoot.” Rather than reporting the shooting as a bad shoot, Lohman, a well-respected lieutenant with NOPD, participated in a conspiracy that involved, among other things, writing false reports about the incident, planting a gun and making up false witness statements.
Deputy Chief Bobbi Bernstein, a prosecutor on the case, said in court that Lohman’s crimes were reprehensible, and that he needed to be punished with prison time. However, she also asked the judge to sentence Mr. Lohman to less than the five years called for by sentencing guidelines, in recognition of the fact that he provided cooperation that was critical to the prosecution of others. Ms. Bernstein noted that the victims of the Danziger Bridge shooting have been “an inspiration” for the prosecution, and that every recommendation the government has made for sentencing – including any requests the government has made for leniency for cooperating police officers – has been with the blessing of those victims.
“I’m pleased with today’s sentence,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Mr. Lohman owes a serious debt to society for betraying the badge he had been trusted to wear. But he also deserves some leniency for the critical role he played in allowing other offenders to be brought to justice. The government is outraged by Mr. Lohman’s crimes, but grateful for his cooperation in this case.”
U.S. Attorney Jim Letten stated: “The sentencing of former New Orleans Police Officer Michael Lohman today was the product of his important admission of guilt, his essential and truthful testimony at trial, and the government’s request to the court for leniency by appropriately recognizing his substantial and even critical assistance. Such tremendously important cases and the just results they produce can often only be brought with such cooperation. Moreover, our request that Mr. Lohman’s sentence require his conducting outreach to future NOPD officers was not only appropriate but essential in ensuring that such violations of public trust are not repeated. As United States Attorney and as a citizen, I—along with the prosecution team—believe that our resolution of this case and our request for consideration in sentencing Mr. Lohman is the right course to take.”
David Welker, Special Agent in Charge of the FBI New Orleans field office stated, “The law must be respected by those that are entrusted to enforce it. If the law is to be honored, it must first be respected by those who enforce it. Unfortunately, Lt. Lohman failed to remain faithful to the oath he took as a police officer and as a result tarnished the badge that many wear so proudly.”
This case was investigated by the New Orleans Field Office of the FBI, and was prosecuted by Deputy Chief Bobbi Bernstein and Trial Attorney Cindy Chung of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney Ted Carter of the Eastern District of Louisiana.
Former New Orleans Police Department Lieutenant Sentenced in Connection with Shootings on Danziger Bridge
WASHINGTON – A former lieutenant with the New Orleans Police Department (NOPD), was sentenced today for his role in a conspiracy to obstruct justice and for misprision of a felony (for concealing a known crime), in connection with a federal investigation of two police-involved shootings that left two civilians dead and four others seriously wounded in the area of the Danziger Bridge in the days after Hurricane Katrina.
Michael Lohman, 41, of Terrytown, La., was sentenced in federal court to serve four years in prison, to be followed by three years of supervised release. During the first year of supervised release, Mr. Lohman is to perform 300 hours of community service. Additionally, he has been ordered to meet with NOPD recruit classes to serve as a warning to officers tempted to disobey the law. The court also imposed a $2500 fine. On Feb. 24, 2010, Lohman pleaded guilty in federal court in New Orleans before U. S. District Court Judge Ivan L. R. Lemelle.
Mr. Lohman admitted to helping with the Sept. 4, 2005, cover up and also admitted – first during his guilty plea and later when he testified at the trial of five fellow officers -- that he knew that the shootings on the bridge were unjustified, and that he helped other officers cover up what had happened on the bridge.
When Lohman arrived on the scene shortly after the shootings, he noticed that there were no guns on or near the dead and wounded civilians. After determining that the involved officers could not come up with any evidence to justify the shooting, he concluded that they had been involved in a “bad shoot.” Rather than reporting the shooting as a bad shoot, Lohman, a well-respected lieutenant with NOPD, participated in a conspiracy that involved, among other things, writing false reports about the incident, planting a gun and making up false witness statements.
Deputy Chief Bobbi Bernstein, a prosecutor on the case, said in court that Lohman’s crimes were reprehensible, and that he needed to be punished with prison time. However, she also asked the judge to sentence Mr. Lohman to less than the five years called for by sentencing guidelines, in recognition of the fact that he provided cooperation that was critical to the prosecution of others. Ms. Bernstein noted that the victims of the Danziger Bridge shooting have been “an inspiration” for the prosecution, and that every recommendation the government has made for sentencing – including any requests the government has made for leniency for cooperating police officers – has been with the blessing of those victims.
“I’m pleased with today’s sentence,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Mr. Lohman owes a serious debt to society for betraying the badge he had been trusted to wear. But he also deserves some leniency for the critical role he played in allowing other offenders to be brought to justice. The government is outraged by Mr. Lohman’s crimes, but grateful for his cooperation in this case.”
U.S. Attorney Jim Letten stated: “The sentencing of former New Orleans Police Officer Michael Lohman today was the product of his important admission of guilt, his essential and truthful testimony at trial, and the government’s request to the court for leniency by appropriately recognizing his substantial and even critical assistance. Such tremendously important cases and the just results they produce can often only be brought with such cooperation. Moreover, our request that Mr. Lohman’s sentence require his conducting outreach to future NOPD officers was not only appropriate but essential in ensuring that such violations of public trust are not repeated. As United States Attorney and as a citizen, I—along with the prosecution team—believe that our resolution of this case and our request for consideration in sentencing Mr. Lohman is the right course to take.”
David Welker, Special Agent in Charge of the FBI New Orleans field office stated, “The law must be respected by those that are entrusted to enforce it. If the law is to be honored, it must first be respected by those who enforce it. Unfortunately, Lt. Lohman failed to remain faithful to the oath he took as a police officer and as a result tarnished the badge that many wear so proudly.”
This case was investigated by the New Orleans Field Office of the FBI, and was prosecuted by Deputy Chief Bobbi Bernstein and Trial Attorney Cindy Chung of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney Ted Carter of the Eastern District of Louisiana.
Thursday, November 10, 2011
BEATING AN INNOCENT MAN TO DEATH GETS POLICE OFFICER UP TO 30 YEARS IN PRISON
Wednesday, November 2, 2011
Spokane, Wash., Police Officer Convicted of Civil Rights and Obstruction Violations in Connection with Beating Otto Zehm
WASHINGTON – A federal jury today convicted Spokane, Wash., Police Officer Karl F. Thompson Jr., 64, of civil rights and obstruction charges stemming from his March 18, 2006, beating of an unarmed citizen and an extensive cover-up that followed, the Justice Department announced. Following a taser deployment and a rapid series of baton blows to the head, neck and body, the victim Otto Zehm, 36, was hogtied, stopped breathing, and was transported to the hospital, where he died two days later. Thompson claimed the beating was justified because he felt threatened by a plastic bottle of soda the victim was holding.
The evidence at trial established that on the evening of March 18, 2006, the victim went to a Zip Trip convenience store to buy soda and snacks. Security video introduced at trial showed that the victim shopped for soda, Thompson ran into the store, drew his baton and continued to run toward the victim from behind. Witnesses testified that the victim appeared to be completely unaware of Thompson charging towards him as he selected a plastic bottle of soda to purchase. As the victim turned toward the candy aisle, he saw Thompson rushing towards him with his baton raised. According to trial testimony and store security video, less than 2.5 seconds after the victim turned to see the Thompson running towards him, Thompson delivered two overhand baton blows to the victim’s head, knocking him backwards onto the floor. Witnesses testified that Thompson then stood over the victim and fired taser probes down into chest as he was in the fetal position on the floor beneath him. The victim never returned to his feet, but Thompson continued to deliver overhand baton blows, including a final flurry of seven baton strikes in eight seconds, which was captured by the convenience store’s security cameras.
Evidence at trial established that Thompson went to the convenience store after two teenagers reported that a man fitting the victim’s description had approached a drive-up ATM on foot as they were conducting a transaction, and they felt uncomfortable. After the teenagers pulled away from the ATM, they were unsure whether they had cancelled their transaction. They reported that the man who had been standing near them, approached the ATM and left with something in his hands that looked like money. Prior to Thompson’s first strike, dispatchers made clear that the complainants were not sure whether the man at the ATM had taken any of their money. One of the women at the ATM who called 911 that night testified at trial that she was horrified by Thompson’s rapid series of overhand baton blows to the victim.
Testimony at trial established that Thompson never asked the victim any questions or even mentioned the ATM. Witnesses testified that the victim’s last words were: “All I wanted was a Snickers.” The Spokane Police Department investigated charges against the victim based on a report by Thompson that he had assaulted him. However, the victim was never charged with theft or robbery, and evidence at trial established that police officers found his paycheck on him.
Thompson gave his report of the incident on March 22, 2006, after he knew the victim had died. In his report, Thompson denied hitting the victim in the head with his baton because that would have constituted deadly force, which he acknowledged was not justified in this case. However, trial testimony established that Thompson admitted to Spokane Police Officer Timothy Moses on-scene that night that he had struck the victim in the head and neck with his baton. Witnesses and medical testimony also confirmed that Thompson had delivered baton blows to the victim’s head and neck.
“We are grateful for the jury’s verdict, which vindicates the rights of Otto Zehm,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The defendant was given considerable power to enforce the law, but instead he abused his authority when he brutally beat an innocent man. This prosecution reflects the department’s commitment to prosecuting official misconduct cases, and today’s conviction sends a message that such violent abuse of power will not be tolerated.”
The defendant faces a maximum penalty of up to 30 years in prison.
This case was investigated by the FBI’s Spokane Field Office, and was prosecuted by Trial Attorney Victor Boutros of the Justice Department’s Civil Rights Division and by Assistant U.S. Attorneys Timothy Durkin and Aine Ahmed of the Eastern District of Washington.
Spokane, Wash., Police Officer Convicted of Civil Rights and Obstruction Violations in Connection with Beating Otto Zehm
WASHINGTON – A federal jury today convicted Spokane, Wash., Police Officer Karl F. Thompson Jr., 64, of civil rights and obstruction charges stemming from his March 18, 2006, beating of an unarmed citizen and an extensive cover-up that followed, the Justice Department announced. Following a taser deployment and a rapid series of baton blows to the head, neck and body, the victim Otto Zehm, 36, was hogtied, stopped breathing, and was transported to the hospital, where he died two days later. Thompson claimed the beating was justified because he felt threatened by a plastic bottle of soda the victim was holding.
The evidence at trial established that on the evening of March 18, 2006, the victim went to a Zip Trip convenience store to buy soda and snacks. Security video introduced at trial showed that the victim shopped for soda, Thompson ran into the store, drew his baton and continued to run toward the victim from behind. Witnesses testified that the victim appeared to be completely unaware of Thompson charging towards him as he selected a plastic bottle of soda to purchase. As the victim turned toward the candy aisle, he saw Thompson rushing towards him with his baton raised. According to trial testimony and store security video, less than 2.5 seconds after the victim turned to see the Thompson running towards him, Thompson delivered two overhand baton blows to the victim’s head, knocking him backwards onto the floor. Witnesses testified that Thompson then stood over the victim and fired taser probes down into chest as he was in the fetal position on the floor beneath him. The victim never returned to his feet, but Thompson continued to deliver overhand baton blows, including a final flurry of seven baton strikes in eight seconds, which was captured by the convenience store’s security cameras.
Evidence at trial established that Thompson went to the convenience store after two teenagers reported that a man fitting the victim’s description had approached a drive-up ATM on foot as they were conducting a transaction, and they felt uncomfortable. After the teenagers pulled away from the ATM, they were unsure whether they had cancelled their transaction. They reported that the man who had been standing near them, approached the ATM and left with something in his hands that looked like money. Prior to Thompson’s first strike, dispatchers made clear that the complainants were not sure whether the man at the ATM had taken any of their money. One of the women at the ATM who called 911 that night testified at trial that she was horrified by Thompson’s rapid series of overhand baton blows to the victim.
Testimony at trial established that Thompson never asked the victim any questions or even mentioned the ATM. Witnesses testified that the victim’s last words were: “All I wanted was a Snickers.” The Spokane Police Department investigated charges against the victim based on a report by Thompson that he had assaulted him. However, the victim was never charged with theft or robbery, and evidence at trial established that police officers found his paycheck on him.
Thompson gave his report of the incident on March 22, 2006, after he knew the victim had died. In his report, Thompson denied hitting the victim in the head with his baton because that would have constituted deadly force, which he acknowledged was not justified in this case. However, trial testimony established that Thompson admitted to Spokane Police Officer Timothy Moses on-scene that night that he had struck the victim in the head and neck with his baton. Witnesses and medical testimony also confirmed that Thompson had delivered baton blows to the victim’s head and neck.
“We are grateful for the jury’s verdict, which vindicates the rights of Otto Zehm,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The defendant was given considerable power to enforce the law, but instead he abused his authority when he brutally beat an innocent man. This prosecution reflects the department’s commitment to prosecuting official misconduct cases, and today’s conviction sends a message that such violent abuse of power will not be tolerated.”
The defendant faces a maximum penalty of up to 30 years in prison.
This case was investigated by the FBI’s Spokane Field Office, and was prosecuted by Trial Attorney Victor Boutros of the Justice Department’s Civil Rights Division and by Assistant U.S. Attorneys Timothy Durkin and Aine Ahmed of the Eastern District of Washington.
Wednesday, November 9, 2011
TWO MEN SENT TO PRISON FOR TRYING TO DEFRAUD AN AIRLINE
The following is an excerpt from the Department of Justice antitrust website:
“WASHINGTON — A former owner and operator of a Florida-based airline fuel supply service company and a former owner and operator of an Indiana-based flight management services company were sentenced today to serve prison time and to pay restitution for conspiring to commit wire fraud and honest services fraud in separate schemes to defraud Ryan International Airlines, a charter airline company located in Rockford, Ill., the Department of Justice announced today.
James E. Murphy, the former owner and operator of a Florida aviation fuel supply company, was sentenced to 23 months in prison and to pay $42,500 in restitution. David A. Chaisson, the former owner and operator of an Indiana flight management services company, was sentenced to 16 months in prison and to pay $50,742.48 in restitution.
On Aug. 12, 2011, Murphy and Chaisson pleaded guilty in separate two-count felony charges in U.S. District Court in Fort Lauderdale, Fla., for participating in different conspiracies with co-conspirators to defraud Ryan by making kickback payments to Wayne E. Kepple, a former vice president of ground operations for Ryan, in exchange for Kepple awarding their respective companies business.
Ryan provides air passenger and cargo services for corporations, private individuals, professional sports teams and the U.S. government, including the U.S. Department of Defense, the U.S. Department of Homeland Security and the U.S. Marshals Service.
According to court documents, Murphy paid more than $130,000 in kickbacks to Kepple, who was responsible for procuring jet fuel for Ryan flights, in exchange for Kepple providing aviation fuel contracts to Murphy’s company and to two other aviation fuel supply companies where Murphy worked as a corporate bookkeeper. In a separate conspiracy, according to court documents, Chaisson paid Kepple more than $60,000 in kickbacks, including payments based on fabricated invoices submitted by Chaisson’s company to Ryan. Chaisson’s company was responsible for managing the ground operations for Ryan flights.
On Sept. 29, 2011, Kepple was charged with conspiracy to commit wire fraud and honest services fraud in three separate kickback schemes to defraud Ryan involving Murphy, Chaisson, Robert Riddell, the former owner and operator of an airline security and ground service company, and others. On Oct. 17, 2011, Riddell pleaded guilty in U.S. District Court in West Palm Beach, Fla., for conspiring with Kepple to defraud Ryan. He is scheduled to be sentenced on Dec. 20, 2011.”
“WASHINGTON — A former owner and operator of a Florida-based airline fuel supply service company and a former owner and operator of an Indiana-based flight management services company were sentenced today to serve prison time and to pay restitution for conspiring to commit wire fraud and honest services fraud in separate schemes to defraud Ryan International Airlines, a charter airline company located in Rockford, Ill., the Department of Justice announced today.
James E. Murphy, the former owner and operator of a Florida aviation fuel supply company, was sentenced to 23 months in prison and to pay $42,500 in restitution. David A. Chaisson, the former owner and operator of an Indiana flight management services company, was sentenced to 16 months in prison and to pay $50,742.48 in restitution.
On Aug. 12, 2011, Murphy and Chaisson pleaded guilty in separate two-count felony charges in U.S. District Court in Fort Lauderdale, Fla., for participating in different conspiracies with co-conspirators to defraud Ryan by making kickback payments to Wayne E. Kepple, a former vice president of ground operations for Ryan, in exchange for Kepple awarding their respective companies business.
Ryan provides air passenger and cargo services for corporations, private individuals, professional sports teams and the U.S. government, including the U.S. Department of Defense, the U.S. Department of Homeland Security and the U.S. Marshals Service.
According to court documents, Murphy paid more than $130,000 in kickbacks to Kepple, who was responsible for procuring jet fuel for Ryan flights, in exchange for Kepple providing aviation fuel contracts to Murphy’s company and to two other aviation fuel supply companies where Murphy worked as a corporate bookkeeper. In a separate conspiracy, according to court documents, Chaisson paid Kepple more than $60,000 in kickbacks, including payments based on fabricated invoices submitted by Chaisson’s company to Ryan. Chaisson’s company was responsible for managing the ground operations for Ryan flights.
On Sept. 29, 2011, Kepple was charged with conspiracy to commit wire fraud and honest services fraud in three separate kickback schemes to defraud Ryan involving Murphy, Chaisson, Robert Riddell, the former owner and operator of an airline security and ground service company, and others. On Oct. 17, 2011, Riddell pleaded guilty in U.S. District Court in West Palm Beach, Fla., for conspiring with Kepple to defraud Ryan. He is scheduled to be sentenced on Dec. 20, 2011.”
Tuesday, November 8, 2011
DOJ ENFORCES EMPLOYMENT RIGHTS OF U.S. AIR FORCE RESERVIST
The following is an excerpt from the Department of Justice website:
Thursday, October 27, 2011
“Justice Department Settles Lawsuit with Washington State Company to Enforce Employment Rights of U.S. Air Force Reservist
WASHINGTON - The Justice Department announced today that it has reached a settlement with James J. Williams Bulk Service Transport Inc. (JJW), its parent company Trans-System Inc. and System TWT Transportation Inc. alleging that the companies violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by failing to promptly and properly reemploy U.S. Air Force reservist Dave Axtell in April 2009 when he returned from military service in support of Operation Enduring Freedom. The complaint also alleged that the defendants unlawfully terminated Axtell’s employment without cause shortly after he was reemployed. If approved by the court, the settlement would resolve the allegations that the defendants violated the reemployment rights of Axtell.
Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment not been interrupted by military service, or in a position of like seniority, status and pay. In addition, any individual with Axtell’s length of absence for military service who is reemployed cannot be terminated, except for just cause, within one year after the date of reemployment.
According to the department’s complaint, filed in the U.S. District Court for the Western District of Washington in Tacoma, the defendant companies violated USERRA by not promptly or properly reemploying Axtell in his previous pre-service position as a driver supervisor or in a position with comparable seniority, status and pay. The defendants waited three months to reemploy Axtell, and thereafter employed him in an unsalaried, lower status position requiring longer hours. Ultimately, according to the complaint, defendants terminated Axtell’s employment without cause, also in violation of USERRA.
Under the terms of the settlement, embodied in a consent decree that has been submitted for approval to the federal district court in Tacoma, the defendants must pay Axtell $60,000 to compensate him for lost wages and benefits. Among other things, the settlement also requires the defendants to provide training to JJW’s high level officials and human resources staff on the USERRA rights and obligations of employers and covered employees.
“The men and women who bravely serve our nation in the armed forces should not have to sacrifice their jobs to do so. Employers have a legal obligation to ensure returning service members get their jobs back when they return from military duty as required by law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is committed to protecting the rights of those who, through their courage and sacrifice, secure the rights of all Americans.”
“The United States Attorney’s Office is committed to enforcing the laws that protect the rights of those brave men and women who serve our country proudly,” U.S. Attorney for the Western District of Washington Jenny A. Durkan said today. “Our soldiers must be able to serve with the confidence that they will get their jobs back when they return to the workforce and will not be discharged without just cause.”
The case was litigated by Assistant U.S. Attorney J. Michael Diaz in the U.S. Attorney’s Office for the Western District of Washington, in collaboration with Jodi Danis, Special Counsel, and Kristofor Hammond, Senior Trial Attorney, in the Civil Rights Division of the Justice Department. The case stems from a referral from the U.S. Labor Department following an investigation by its Veterans’ Employment and Training Service.”
Thursday, October 27, 2011
“Justice Department Settles Lawsuit with Washington State Company to Enforce Employment Rights of U.S. Air Force Reservist
WASHINGTON - The Justice Department announced today that it has reached a settlement with James J. Williams Bulk Service Transport Inc. (JJW), its parent company Trans-System Inc. and System TWT Transportation Inc. alleging that the companies violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by failing to promptly and properly reemploy U.S. Air Force reservist Dave Axtell in April 2009 when he returned from military service in support of Operation Enduring Freedom. The complaint also alleged that the defendants unlawfully terminated Axtell’s employment without cause shortly after he was reemployed. If approved by the court, the settlement would resolve the allegations that the defendants violated the reemployment rights of Axtell.
Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment not been interrupted by military service, or in a position of like seniority, status and pay. In addition, any individual with Axtell’s length of absence for military service who is reemployed cannot be terminated, except for just cause, within one year after the date of reemployment.
According to the department’s complaint, filed in the U.S. District Court for the Western District of Washington in Tacoma, the defendant companies violated USERRA by not promptly or properly reemploying Axtell in his previous pre-service position as a driver supervisor or in a position with comparable seniority, status and pay. The defendants waited three months to reemploy Axtell, and thereafter employed him in an unsalaried, lower status position requiring longer hours. Ultimately, according to the complaint, defendants terminated Axtell’s employment without cause, also in violation of USERRA.
Under the terms of the settlement, embodied in a consent decree that has been submitted for approval to the federal district court in Tacoma, the defendants must pay Axtell $60,000 to compensate him for lost wages and benefits. Among other things, the settlement also requires the defendants to provide training to JJW’s high level officials and human resources staff on the USERRA rights and obligations of employers and covered employees.
“The men and women who bravely serve our nation in the armed forces should not have to sacrifice their jobs to do so. Employers have a legal obligation to ensure returning service members get their jobs back when they return from military duty as required by law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is committed to protecting the rights of those who, through their courage and sacrifice, secure the rights of all Americans.”
“The United States Attorney’s Office is committed to enforcing the laws that protect the rights of those brave men and women who serve our country proudly,” U.S. Attorney for the Western District of Washington Jenny A. Durkan said today. “Our soldiers must be able to serve with the confidence that they will get their jobs back when they return to the workforce and will not be discharged without just cause.”
The case was litigated by Assistant U.S. Attorney J. Michael Diaz in the U.S. Attorney’s Office for the Western District of Washington, in collaboration with Jodi Danis, Special Counsel, and Kristofor Hammond, Senior Trial Attorney, in the Civil Rights Division of the Justice Department. The case stems from a referral from the U.S. Labor Department following an investigation by its Veterans’ Employment and Training Service.”
Saturday, November 5, 2011
HOUSING DEVELOPMENT COMPANY SETTLES WITH DOJ OVER REQUIRED DISABLED HOUSING FEATURES
The following is from the Department of Justice website:
Thursday, October 27, 2011
“WASHINGTON – The Justice Department today announced a settlement of its lawsuit alleging that Equity Homes Inc, PBR LLC, BBR LLC and Shane Hartung violated the Fair Housing Act (FHA) by failing to provide features that would make their multi-family housing developments in Sioux Falls accessible to people with disabilities as required by the Fair Housing Act.
The case originated from discrimination complaints filed with the U.S. Department of Housing and Urban Development (HUD), concerning six Sioux Falls complexes - East Briar Apartments, West Briar Apartments, Kensington Apartments, Beverly Gardens Apartments, Sertoma Hills Apartments and Sertoma Hills Villas. After investigating, HUD issued a charge of discrimination and referred the matter to the Justice Department, which filed this lawsuit in May 2009. In its complaint, the Justice Department named Equity Homes Inc., PBR LLC, BBR LLC and Shane Hartung as defendants liable for violations of the FHA. The complaint also names Scott Snoozy, Myron R. Van Buskirk, Wayne Hansen, Martin McGee and Sertoma Hills Villas Association Inc., the current owners of the properties who were named in order to obtain complete relief.
The settlement filed today, along with a prior consent order entered in this case on July 20, 2011, now fully resolves this matter. Today’s agreement must still be approved by the court. According to the settlement, defendants Equity Homes Inc., BBR LLC and Shane Hartung will modify the six apartment complexes to make them accessible to persons with disabilities and will pay $41,500 in monetary damages to those harmed by the inaccessible housing. The settlements in this case also require these defendants to undergo training on the requirements on the Fair Housing Act and provide periodic reports to the government.
“Building apartments and condominiums that are accessible to persons with disabilities is not an option, it is the law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Builders, architects and others who build or design multi-family housing need to consider accessibility at the outset, or they risk much greater expenses to fix the problem later.”
“My office is committed to ensuring that South Dakota’s disabled citizens receive the reasonable accommodations they need to function and live as others do,” said Brendan Johnson, U.S. Attorney for the District of South Dakota. “We will remain vigilant in enforcing our nation’s fair housing laws so that our citizens are not excluded from housing opportunities.”
“Access to a unit brings access to self-sufficiency and independence for people with disabilities,” stated John Trasviña, HUD Assistant Secretary for Fair Housing & Equal Opportunity. “Through industry training and legal compliance, we will make this a reality across the nation.”
Thursday, October 27, 2011
“WASHINGTON – The Justice Department today announced a settlement of its lawsuit alleging that Equity Homes Inc, PBR LLC, BBR LLC and Shane Hartung violated the Fair Housing Act (FHA) by failing to provide features that would make their multi-family housing developments in Sioux Falls accessible to people with disabilities as required by the Fair Housing Act.
The case originated from discrimination complaints filed with the U.S. Department of Housing and Urban Development (HUD), concerning six Sioux Falls complexes - East Briar Apartments, West Briar Apartments, Kensington Apartments, Beverly Gardens Apartments, Sertoma Hills Apartments and Sertoma Hills Villas. After investigating, HUD issued a charge of discrimination and referred the matter to the Justice Department, which filed this lawsuit in May 2009. In its complaint, the Justice Department named Equity Homes Inc., PBR LLC, BBR LLC and Shane Hartung as defendants liable for violations of the FHA. The complaint also names Scott Snoozy, Myron R. Van Buskirk, Wayne Hansen, Martin McGee and Sertoma Hills Villas Association Inc., the current owners of the properties who were named in order to obtain complete relief.
The settlement filed today, along with a prior consent order entered in this case on July 20, 2011, now fully resolves this matter. Today’s agreement must still be approved by the court. According to the settlement, defendants Equity Homes Inc., BBR LLC and Shane Hartung will modify the six apartment complexes to make them accessible to persons with disabilities and will pay $41,500 in monetary damages to those harmed by the inaccessible housing. The settlements in this case also require these defendants to undergo training on the requirements on the Fair Housing Act and provide periodic reports to the government.
“Building apartments and condominiums that are accessible to persons with disabilities is not an option, it is the law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Builders, architects and others who build or design multi-family housing need to consider accessibility at the outset, or they risk much greater expenses to fix the problem later.”
“My office is committed to ensuring that South Dakota’s disabled citizens receive the reasonable accommodations they need to function and live as others do,” said Brendan Johnson, U.S. Attorney for the District of South Dakota. “We will remain vigilant in enforcing our nation’s fair housing laws so that our citizens are not excluded from housing opportunities.”
“Access to a unit brings access to self-sufficiency and independence for people with disabilities,” stated John Trasviña, HUD Assistant Secretary for Fair Housing & Equal Opportunity. “Through industry training and legal compliance, we will make this a reality across the nation.”
Thursday, November 3, 2011
EPA WINNER OF THE 2011 ENERGY STAR NATIONAL BUILDING COMPETITION IS ANNOUNCED
The following is an excerpt from an EPA newsletter:
November 2, 2011
EPA Announces Winner of the 2011 Energy Star National Building Competition
WASHINGTON – The U.S. Environmental Protection Agency (EPA) today announced that the University of Central Florida (UCF) is the winner of EPA’s 2011 Energy Star National Building Competition: Battle of the Buildings. In its second year, the competition featured teams from 245 buildings across the country in a head-to-head battle to save energy, reduce costs, and protect people's health and the environment. UCF’s winning building was a parking garage on the university’s main campus where energy use was decreased by 63.2 percent. Together, competitors cut their energy costs by $5.2 million.
“All of the Energy Star National Building Competition participants are seizing the opportunities energy efficiency presents to cut pollution and save money. Congratulations to the University of Central Florida for leading the way,” said EPA Administrator Lisa P. Jackson. “Increasing energy efficiency is a key strategy for securing our nation's energy future, and Energy Star can help everyone from homeowners and small businesses to big buildings cut energy use and protect health by reducing air pollution.”
From improvements in operations and maintenance to upgrades in equipment and technology, the competitors saved a combined total of more than 240 million kBtus of energy and $5.2 million on utility bills annually. Competitors reduced annual greenhouse gas emissions equal to the electricity used by more than 3,600 homes. The top overall finishers and their percent-based reductions in energy use include:
University of Central Florida, Parking Garage C, Orlando, Fla. 63.2%
Twinsburg High School and Sports Complex, Twinsburg, Ohio 46.3%
Polaris Career Center, Middleburg Heights, Ohio 43.4%
Hartman Elementary School, Wylie, Texas 43.2%
Scientific Instruments, West Palm Beach, Fla. 42.2%
Fannie Mae Office Building, 3939 Wisconsin Ave., Washington, District of Columbia 34.6%
Office Depot, Plano, Texas 34.1%
North Suburban Medical Office Building, Thornton, Colo. 33.7%
Office Depot, Raleigh, N.C. 33.1%
Kokomo High School, Kokomo, Ind. 32.3%
The energy efficiency improvements achieved by UCF demonstrate that significant opportunities exist to save energy even in buildings that are not typically associated with sizeable energy use. Lighting accounts for the majority of energy consumed by an above-ground parking structure, therefore UCF focused their efforts to improve the quality and efficiency of the garage lighting. Improvements included upgrading the main garage to high performance T-5 fluorescent lights, retrofitting the top deck with light emitting diode (LEDs) fixtures, and adding motion sensors in the storage areas. In addition to cutting their energy use by 63 percent, UCF reduced their lighting bill for the parking garage by more than half due to improvements made during the competition. UCF is now spreading their successful strategies, as well as savings, to other buildings across the campus.
The 2011 Energy Star National Building Competition measured energy performance from September 1, 2010 through August 31, 2011. Competitors tracked their building's monthly energy consumption using EPA's Energy Star online energy tracking tool, Portfolio Manager. UCF won the competition by demonstrating the largest percent-reduction in energy use, adjusted for weather and the size of the building. The energy use intensity and square footage for each top overall finisher was verified by an independently licensed professional engineer or registered architect at the conclusion of the competition. This marks the second year a university has won the competition. In 2010, Morrison Residence Hall at the University of North Carolina at Chapel Hill won the competition, reducing energy use by more than 35 percent.
Energy use in commercial buildings accounts for nearly 20 percent of total U.S. greenhouse gas emissions at a cost of more than $100 billion per year. Thousands of businesses and organizations work with EPA’s Energy Star program and are saving billions of dollars and preventing millions of tons of greenhouse gas emissions from entering the atmosphere each year."
November 2, 2011
EPA Announces Winner of the 2011 Energy Star National Building Competition
WASHINGTON – The U.S. Environmental Protection Agency (EPA) today announced that the University of Central Florida (UCF) is the winner of EPA’s 2011 Energy Star National Building Competition: Battle of the Buildings. In its second year, the competition featured teams from 245 buildings across the country in a head-to-head battle to save energy, reduce costs, and protect people's health and the environment. UCF’s winning building was a parking garage on the university’s main campus where energy use was decreased by 63.2 percent. Together, competitors cut their energy costs by $5.2 million.
“All of the Energy Star National Building Competition participants are seizing the opportunities energy efficiency presents to cut pollution and save money. Congratulations to the University of Central Florida for leading the way,” said EPA Administrator Lisa P. Jackson. “Increasing energy efficiency is a key strategy for securing our nation's energy future, and Energy Star can help everyone from homeowners and small businesses to big buildings cut energy use and protect health by reducing air pollution.”
From improvements in operations and maintenance to upgrades in equipment and technology, the competitors saved a combined total of more than 240 million kBtus of energy and $5.2 million on utility bills annually. Competitors reduced annual greenhouse gas emissions equal to the electricity used by more than 3,600 homes. The top overall finishers and their percent-based reductions in energy use include:
University of Central Florida, Parking Garage C, Orlando, Fla. 63.2%
Twinsburg High School and Sports Complex, Twinsburg, Ohio 46.3%
Polaris Career Center, Middleburg Heights, Ohio 43.4%
Hartman Elementary School, Wylie, Texas 43.2%
Scientific Instruments, West Palm Beach, Fla. 42.2%
Fannie Mae Office Building, 3939 Wisconsin Ave., Washington, District of Columbia 34.6%
Office Depot, Plano, Texas 34.1%
North Suburban Medical Office Building, Thornton, Colo. 33.7%
Office Depot, Raleigh, N.C. 33.1%
Kokomo High School, Kokomo, Ind. 32.3%
The energy efficiency improvements achieved by UCF demonstrate that significant opportunities exist to save energy even in buildings that are not typically associated with sizeable energy use. Lighting accounts for the majority of energy consumed by an above-ground parking structure, therefore UCF focused their efforts to improve the quality and efficiency of the garage lighting. Improvements included upgrading the main garage to high performance T-5 fluorescent lights, retrofitting the top deck with light emitting diode (LEDs) fixtures, and adding motion sensors in the storage areas. In addition to cutting their energy use by 63 percent, UCF reduced their lighting bill for the parking garage by more than half due to improvements made during the competition. UCF is now spreading their successful strategies, as well as savings, to other buildings across the campus.
The 2011 Energy Star National Building Competition measured energy performance from September 1, 2010 through August 31, 2011. Competitors tracked their building's monthly energy consumption using EPA's Energy Star online energy tracking tool, Portfolio Manager. UCF won the competition by demonstrating the largest percent-reduction in energy use, adjusted for weather and the size of the building. The energy use intensity and square footage for each top overall finisher was verified by an independently licensed professional engineer or registered architect at the conclusion of the competition. This marks the second year a university has won the competition. In 2010, Morrison Residence Hall at the University of North Carolina at Chapel Hill won the competition, reducing energy use by more than 35 percent.
Energy use in commercial buildings accounts for nearly 20 percent of total U.S. greenhouse gas emissions at a cost of more than $100 billion per year. Thousands of businesses and organizations work with EPA’s Energy Star program and are saving billions of dollars and preventing millions of tons of greenhouse gas emissions from entering the atmosphere each year."
COMPANY SENTENCED FOR TRADING IN RARE PROTECTED BLACK CORAL
The following is an excerpt from the Department of Justice website:
“Wednesday, October 26, 2011
U.S. Virgin Islands Company Sentenced for Illegal Trade of Protected Coral
Gem Manufacturing Sentenced to Highest Financial Penalty for Illegal Coral Trade
WASHINGTON – A U.S. Virgin Islands company was sentenced Wednesday in federal court in St. Thomas, U.S.V.I., for knowingly trading in falsely-labeled, protected black coral that was shipped into the United States in violation of the Endangered Species Act and the Lacey Act, the Department of Justice announced.
On July 15, 2011, GEM Manufacturing LLC, headquartered in St. Thomas, pleaded guilty to seven counts of v iolations of both the Endangered Species Act and the Lacey Act. The Lacey Act makes it a felony to falsely label wildlife that is intended for international commerce. The Endangered Species Act is the U.S. domestic law that implements the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Each of the species of black coral is listed in Appendix II of CITES and is subject to strict trade regulations.
GEM was sentenced to pay a criminal fine of $1.8 million. The criminal fine will be apportioned between the Lacey Act Reward Fund and the National Oceanic and Atmospheric Administration (NOAA) Asset Forfeiture Fund, accounts established by Congress to assist U.S. Fish and Wildlife Service (FWS) and NOAA in the enforcement of federal conservation laws. GEM was sentenced to pay an additional $500,000 in community service payments for projects to study and protect black coral.
GEM was also ordered to forfeit dozens of jewelry items, ten artistic sculptures and over 13,655 pounds of raw black coral, the total value of which, at current prices, exceeds $2.17 million. The aggregate financial penalty of $4.47 million makes this the largest for the illegal trade in coral, the largest non-seafood wildlife trafficking financial penalty and the fourth largest for any U.S. case involving the illegal trade of wildlife.
“We face a growing challenge to preserve the world’s coral, which serves as essential habitat for marine biodiversity,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “We will continue to work with our federal partners to aggressively investigate and prosecute those who violate U.S. law by illegally trading in protected species.”
“I have stated before and reiterate that the U.S. Attorney's Office will vigorously protect the environment,” said U.S. Attorney Ronald W. Sharpe for the District of the U.S. Virgin Islands. “It is critical that we do everything we can to prevent the decline and depletion of coral and other protected flora and fauna so that the environment, in this case the marine environment, may be preserved for our enjoyment and that of future generations.”
“Illegal trade further threatens already fragile coral reef ecosystems. The penalties here should make it clear that the United States will not tolerate trafficking in these protected resources,” said William C. Woody, Chief, U.S. Fish and Wildlife Service (FWS) Office of Law Enforcement.
“Black corals are valuable resources that serve as habitat for a myriad of species in the deep sea,” said Eric Schwaab, assistant NOAA administrator for NOAA's Fisheries Service. “They are slow-growing, and some species can live for hundreds to thousands of years. Effective enforcement and regulation of their trade in support of CITES are among our most important tools in ensuring that collection of these species is sustainable and that their survival in the wild is assured.”
“CBP Officers and Agriculture Specialists in the Caribbean work hand in hand with the U.S. Fish and Wildlife Service to detect and intercept falsely labeled and concealed wildlife from illegally entering into U.S. commerce,” said Marcelino Borges, U.S. Customs & Border Protection (CBP) Director of Field Operations for the Caribbean. “Cooperation and collaboration between U.S. Customs & Border Protection and U.S. Fish & Wildlife Service were critical in the success of this investigation.”
“This sentence sends a clear message to black coral traffickers that we and our federal law enforcement partners are in the business of preventing illegal wildlife trade,” said Roberto Escobar Vargas, special agent in charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Puerto Rico. “We will continue to identify and apprehend those who exploit protected species for commercial gain.”
GEM was sentenced to three and a half years of probation and a 10-point compliance plan that includes an auditing, tracking and inventory control program. GEM was also banned from doing business with its former coral supplier, Peng Chia Enterprise Co. Ltd. and its management team of Ivan and Gloria Chu. GEM was the entity known as “Company X” in the related case of U.S. v. Gloria and Ivan Chu, Case No. 2010-003 (D. Virgin Islands). In January 2010, federal agents arrested the Chus as part of a sting operation in Las Vegas. The Chus were subsequently indicted in 2010 for illegally providing black coral to GEM. On June 23, 2010, Ivan Chu was sentenced to serve 30 months in prison and pay a $12,500 fine. Gloria Chu was sentenced to serve 20 months in prison and pay a $12,500 fine.
Black coral is a precious coral that can be polished to a high sheen, worked into artistic sculptures, and used in inlaid jewelry. Black coral is typically found in deep waters, and many species have long life spans and are slow-growing. Using deep sea submersibles, scientists have observed that fish and invertebrates tend to accumulate around the black coral colonies. Thus, black coral communities serve important habitat functions in the mesophotic and deepwater zones. In the last few decades, pressures from overharvesting, due in part to the wider availability of scuba gear, and the introduction of invasive species have threatened this group of coral. Recent seizures of illegal black coral around the world have led many to believe that black coral poaching is on the rise.
GEM is a manufacturer of high-end jewelry, art, and sculpture items that contain black coral. The vast majority of GEM’s sales are through retail stores called “galleries.” In order to facilitate its operations, GEM Manufacturing LLC operated through several subsidiaries that did business in Florida, Nevada, California, Hawaii, U.S. Virgin Islands, Alaska and the Cayman Islands.
Prior to 2010, GEM’s primary supplier of black coral was a Taiwanese company, Peng Chia Enterprise Co., Ltd., located in Taipei, Taiwan. Peng Chia was, at times, able to obtain CITES export permits from the Taiwanese government, but by 2007, the Taiwanese government had increased scrutiny of the trade and insisted on a proper certificate of origin. Because much of the black coral was of, at best, undeterminable, if not legally questionable origin, it was basically impossible to arrange for a legitimate certificate of origin to be issued.
According to the plea documents, in order to be able to continue to supply GEM with raw black coral, Peng Chia sought other black coral sources in mainland China, routing them through Hong Kong on their way to GEM facilities. None of the shipments from Hong Kong had the required CITES certificates. Instead of being labeled “wildlife,” each shipment was labeled “plastic of craft work” or something similarly deficient. The scheme had been running for at least two years by the time the year 2009 black coral shipments were sent to St. Thomas. The 2009 shipments form the basis of the charges contained in the bill of information.
A GEM company officer (terminated in early 2010) procured black coral from Peng Chia knowing that there were no CITES certificates. Under the supervision of this company officer, other GEM personnel confirmed that it was part of their jobs to receive and sort through incoming boxes of black coral and that none of those boxes arriving from Hong Kong contained CITES certificates. During the period 2007-2009, those same individuals reported seeing boxes containing black coral that were externally labeled as “plastic of craft work.” GEM never ordered plastic and does not use plastic in any of its manufacturing.
In January 2009, GEM agreed to pay Peng Chia $38,965.00 for an order of black coral. After the funds were received in February 2009, Peng Chia used its Chinese supplier and Chinese intermediary to send six separate shipments of black coral to GEM in St. Thomas. Through a then company officer, GEM knew about the false labeling and lack of CITES certificates through emails with Peng Chia. On Aug. 19, 2009, Peng Chia sent a shipment comprised of 10 boxes of black coral that were labeled “plastic of craft work” to GEM. A CBP Contraband Enforcement Team flagged the shipment as suspicious and contacted FWS based in San Juan, Puerto Rico. As part of "Operation Black Gold," boxes from all six of the 2009 shipments were seized as evidence during a search of GEM’s St. Thomas facility in September 2009. None of these six shipments was accompanied by CITES certificates. Boxes from the Aug. 19, 2009, May 10, 2009, and other shipments were falsely labeled as “plastic of craft work.”
The case was investigated by agents of the FWS and NOAA with support from ICE-HSI and CBP. Analysis of coral samples by the FWS’s National Forensics Laboratory in Ashland, Ore., was critical to the investigation. The case is being prosecuted by Christopher Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division, and Nelson Jones of the U.S. Attorney’s Office in St. Thomas.”
“Wednesday, October 26, 2011
U.S. Virgin Islands Company Sentenced for Illegal Trade of Protected Coral
Gem Manufacturing Sentenced to Highest Financial Penalty for Illegal Coral Trade
WASHINGTON – A U.S. Virgin Islands company was sentenced Wednesday in federal court in St. Thomas, U.S.V.I., for knowingly trading in falsely-labeled, protected black coral that was shipped into the United States in violation of the Endangered Species Act and the Lacey Act, the Department of Justice announced.
On July 15, 2011, GEM Manufacturing LLC, headquartered in St. Thomas, pleaded guilty to seven counts of v iolations of both the Endangered Species Act and the Lacey Act. The Lacey Act makes it a felony to falsely label wildlife that is intended for international commerce. The Endangered Species Act is the U.S. domestic law that implements the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Each of the species of black coral is listed in Appendix II of CITES and is subject to strict trade regulations.
GEM was sentenced to pay a criminal fine of $1.8 million. The criminal fine will be apportioned between the Lacey Act Reward Fund and the National Oceanic and Atmospheric Administration (NOAA) Asset Forfeiture Fund, accounts established by Congress to assist U.S. Fish and Wildlife Service (FWS) and NOAA in the enforcement of federal conservation laws. GEM was sentenced to pay an additional $500,000 in community service payments for projects to study and protect black coral.
GEM was also ordered to forfeit dozens of jewelry items, ten artistic sculptures and over 13,655 pounds of raw black coral, the total value of which, at current prices, exceeds $2.17 million. The aggregate financial penalty of $4.47 million makes this the largest for the illegal trade in coral, the largest non-seafood wildlife trafficking financial penalty and the fourth largest for any U.S. case involving the illegal trade of wildlife.
“We face a growing challenge to preserve the world’s coral, which serves as essential habitat for marine biodiversity,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “We will continue to work with our federal partners to aggressively investigate and prosecute those who violate U.S. law by illegally trading in protected species.”
“I have stated before and reiterate that the U.S. Attorney's Office will vigorously protect the environment,” said U.S. Attorney Ronald W. Sharpe for the District of the U.S. Virgin Islands. “It is critical that we do everything we can to prevent the decline and depletion of coral and other protected flora and fauna so that the environment, in this case the marine environment, may be preserved for our enjoyment and that of future generations.”
“Illegal trade further threatens already fragile coral reef ecosystems. The penalties here should make it clear that the United States will not tolerate trafficking in these protected resources,” said William C. Woody, Chief, U.S. Fish and Wildlife Service (FWS) Office of Law Enforcement.
“Black corals are valuable resources that serve as habitat for a myriad of species in the deep sea,” said Eric Schwaab, assistant NOAA administrator for NOAA's Fisheries Service. “They are slow-growing, and some species can live for hundreds to thousands of years. Effective enforcement and regulation of their trade in support of CITES are among our most important tools in ensuring that collection of these species is sustainable and that their survival in the wild is assured.”
“CBP Officers and Agriculture Specialists in the Caribbean work hand in hand with the U.S. Fish and Wildlife Service to detect and intercept falsely labeled and concealed wildlife from illegally entering into U.S. commerce,” said Marcelino Borges, U.S. Customs & Border Protection (CBP) Director of Field Operations for the Caribbean. “Cooperation and collaboration between U.S. Customs & Border Protection and U.S. Fish & Wildlife Service were critical in the success of this investigation.”
“This sentence sends a clear message to black coral traffickers that we and our federal law enforcement partners are in the business of preventing illegal wildlife trade,” said Roberto Escobar Vargas, special agent in charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Puerto Rico. “We will continue to identify and apprehend those who exploit protected species for commercial gain.”
GEM was sentenced to three and a half years of probation and a 10-point compliance plan that includes an auditing, tracking and inventory control program. GEM was also banned from doing business with its former coral supplier, Peng Chia Enterprise Co. Ltd. and its management team of Ivan and Gloria Chu. GEM was the entity known as “Company X” in the related case of U.S. v. Gloria and Ivan Chu, Case No. 2010-003 (D. Virgin Islands). In January 2010, federal agents arrested the Chus as part of a sting operation in Las Vegas. The Chus were subsequently indicted in 2010 for illegally providing black coral to GEM. On June 23, 2010, Ivan Chu was sentenced to serve 30 months in prison and pay a $12,500 fine. Gloria Chu was sentenced to serve 20 months in prison and pay a $12,500 fine.
Black coral is a precious coral that can be polished to a high sheen, worked into artistic sculptures, and used in inlaid jewelry. Black coral is typically found in deep waters, and many species have long life spans and are slow-growing. Using deep sea submersibles, scientists have observed that fish and invertebrates tend to accumulate around the black coral colonies. Thus, black coral communities serve important habitat functions in the mesophotic and deepwater zones. In the last few decades, pressures from overharvesting, due in part to the wider availability of scuba gear, and the introduction of invasive species have threatened this group of coral. Recent seizures of illegal black coral around the world have led many to believe that black coral poaching is on the rise.
GEM is a manufacturer of high-end jewelry, art, and sculpture items that contain black coral. The vast majority of GEM’s sales are through retail stores called “galleries.” In order to facilitate its operations, GEM Manufacturing LLC operated through several subsidiaries that did business in Florida, Nevada, California, Hawaii, U.S. Virgin Islands, Alaska and the Cayman Islands.
Prior to 2010, GEM’s primary supplier of black coral was a Taiwanese company, Peng Chia Enterprise Co., Ltd., located in Taipei, Taiwan. Peng Chia was, at times, able to obtain CITES export permits from the Taiwanese government, but by 2007, the Taiwanese government had increased scrutiny of the trade and insisted on a proper certificate of origin. Because much of the black coral was of, at best, undeterminable, if not legally questionable origin, it was basically impossible to arrange for a legitimate certificate of origin to be issued.
According to the plea documents, in order to be able to continue to supply GEM with raw black coral, Peng Chia sought other black coral sources in mainland China, routing them through Hong Kong on their way to GEM facilities. None of the shipments from Hong Kong had the required CITES certificates. Instead of being labeled “wildlife,” each shipment was labeled “plastic of craft work” or something similarly deficient. The scheme had been running for at least two years by the time the year 2009 black coral shipments were sent to St. Thomas. The 2009 shipments form the basis of the charges contained in the bill of information.
A GEM company officer (terminated in early 2010) procured black coral from Peng Chia knowing that there were no CITES certificates. Under the supervision of this company officer, other GEM personnel confirmed that it was part of their jobs to receive and sort through incoming boxes of black coral and that none of those boxes arriving from Hong Kong contained CITES certificates. During the period 2007-2009, those same individuals reported seeing boxes containing black coral that were externally labeled as “plastic of craft work.” GEM never ordered plastic and does not use plastic in any of its manufacturing.
In January 2009, GEM agreed to pay Peng Chia $38,965.00 for an order of black coral. After the funds were received in February 2009, Peng Chia used its Chinese supplier and Chinese intermediary to send six separate shipments of black coral to GEM in St. Thomas. Through a then company officer, GEM knew about the false labeling and lack of CITES certificates through emails with Peng Chia. On Aug. 19, 2009, Peng Chia sent a shipment comprised of 10 boxes of black coral that were labeled “plastic of craft work” to GEM. A CBP Contraband Enforcement Team flagged the shipment as suspicious and contacted FWS based in San Juan, Puerto Rico. As part of "Operation Black Gold," boxes from all six of the 2009 shipments were seized as evidence during a search of GEM’s St. Thomas facility in September 2009. None of these six shipments was accompanied by CITES certificates. Boxes from the Aug. 19, 2009, May 10, 2009, and other shipments were falsely labeled as “plastic of craft work.”
The case was investigated by agents of the FWS and NOAA with support from ICE-HSI and CBP. Analysis of coral samples by the FWS’s National Forensics Laboratory in Ashland, Ore., was critical to the investigation. The case is being prosecuted by Christopher Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division, and Nelson Jones of the U.S. Attorney’s Office in St. Thomas.”
DOJ CLAIMS DETROIT TAX PREPARER CLAIMED OVER $13 MILLION IN FRAUDULENT TAX REFUNDS
The following is an excerpt from the Department of Justice website:
Tuesday, November 1, 2011
“WASHINGTON – The United States has asked a federal court in Detroit to bar Carlos Brown from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit alleges that Brown and his business, Express Finance and Processing Services, prepare fraudulent tax returns for customers seeking large refunds based on a frivolous theory called “redemption” or “commercial redemption,” which has been rejected by numerous courts.
The complaint alleges that Brown, a resident of Detroit, prepares returns claiming huge fraudulent refunds based on fabricated income tax withholding reported on false Internal Revenue Service (IRS) Forms 1099-OID. According to the complaint, Brown has allegedly sought more than $13 million in fraudulent refunds on at least 45 tax returns, including a bogus claim on one customer’s return for a refund in excess of $1.75 million.
In the complaint, the government also requests that the court order Brown to provide the government with a list of all persons for whom he has prepared federal tax returns since 2008.”
Tuesday, November 1, 2011
“WASHINGTON – The United States has asked a federal court in Detroit to bar Carlos Brown from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit alleges that Brown and his business, Express Finance and Processing Services, prepare fraudulent tax returns for customers seeking large refunds based on a frivolous theory called “redemption” or “commercial redemption,” which has been rejected by numerous courts.
The complaint alleges that Brown, a resident of Detroit, prepares returns claiming huge fraudulent refunds based on fabricated income tax withholding reported on false Internal Revenue Service (IRS) Forms 1099-OID. According to the complaint, Brown has allegedly sought more than $13 million in fraudulent refunds on at least 45 tax returns, including a bogus claim on one customer’s return for a refund in excess of $1.75 million.
In the complaint, the government also requests that the court order Brown to provide the government with a list of all persons for whom he has prepared federal tax returns since 2008.”
U.S. MARSHALS APPREHEND WILLIAMSPORT FUGITIVE
The following is an excerpt from the U.S. Marshals website:
U.S. Marshals Apprehend Williamsport Child Sex Assault Fugitive in Bellefonte
Sought on additional warrants by other local agencies
Williamsport, PA – U.S. Marshal Martin J. Pane announced today that the U.S. Marshals Service (USMS) arrested Karrieam Jenkins in Bellefonte, Pennsylvania.
Jenkins was being sought on an arrest warrant, dated July 1, 2011 and signed by Magisterial District Judge Allen P. Page III in Williamsport, Pennsylvania.
In late June 2011, the Williamsport Bureau of Police conducted an investigation into the alleged sexual assault of a minor in Williamsport in early April 2011. As a result, an arrest warrant was issued against Jenkins, charging him with the following offenses:
1 count of Indecent Assault – Person Unconscious
1 count of Indecent Assault – Person Less than 16 years of Age
1 count of Corruption of Minors – Defendant Age 18 or Above
1 count of Endangering the Welfare of Children
Jenkins fled the Williamsport area prior to the child sex assault warrant being signed.
Jenkins was also being sought by the Lycoming County Sheriff’s Office on an arrest warrant dated July 13, 2011. The warrant charged Jenkins with failure to appear for a court hearing on drug-related charges filed against him by the Old Lycoming Township Police Department in late May 2011.
In mid July 2011, the Pennsylvania Board of Probation and Parole issued an arrest warrant against Jenkins, charging him with violation of his state parole. In January 2006, Jenkins was arrested on various narcotics charges in Lycoming County. In March 2008, he was convicted and received a 14 to 60 month state prison sentence. He was released from the Pennsylvania Department of Corrections in May 2010, and placed on state parole supervision.
On October 19, local authorities requested the assistance of the U.S. Marshals Service to locate and apprehend Jenkins. This case was adopted by the U.S. Marshals Service’s Fugitive Task Force in the Middle District of Pennsylvania.
U.S. Marshals based in Williamsport investigated several leads on the possible whereabouts of Jenkins. On October 24, U.S. Marshals developed information that the fugitive may be hiding in the State College / Bellefonte area in Centre County, Pennsylvania.
During the late evening hours of October 24, U.S. Marshals located and arrested Jenkins at a house in the 100 block of Faust Circle in Bellefonte. The fugitive was found hiding in a bathtub in the master bathroom. He was taken into custody without further incident.
Jenkins, 36 years of age, was lodged in the Lycoming County Prison, pending future court hearings.
United States Marshal Martin J. Pane stated, “The U.S. Marshals Service is committed to arresting fugitives charged with serious felony offenses, especially those wanted for sex crimes against children. By working with our partners in state and local law enforcement, we will ensure they are ultimately brought to justice.”
U.S. Marshals were assisted by several agencies that comprise its M/PA Fugitive Task Force. This included officers from the Lycoming County Sheriff’s Office and the Penn College Police Department. The Pennsylvania Board of Probation and Parole also provided support at the arrest scene.
The capture of Jenkins demonstrates the effectiveness of U.S. Marshals Service personnel in locating and arresting fugitives in a timely fashion. The concept of all USMS-led fugitive task forces is to seek out and arrest the nation’s most dangerous and violent offenders.”
U.S. Marshals Apprehend Williamsport Child Sex Assault Fugitive in Bellefonte
Sought on additional warrants by other local agencies
Williamsport, PA – U.S. Marshal Martin J. Pane announced today that the U.S. Marshals Service (USMS) arrested Karrieam Jenkins in Bellefonte, Pennsylvania.
Jenkins was being sought on an arrest warrant, dated July 1, 2011 and signed by Magisterial District Judge Allen P. Page III in Williamsport, Pennsylvania.
In late June 2011, the Williamsport Bureau of Police conducted an investigation into the alleged sexual assault of a minor in Williamsport in early April 2011. As a result, an arrest warrant was issued against Jenkins, charging him with the following offenses:
1 count of Indecent Assault – Person Unconscious
1 count of Indecent Assault – Person Less than 16 years of Age
1 count of Corruption of Minors – Defendant Age 18 or Above
1 count of Endangering the Welfare of Children
Jenkins fled the Williamsport area prior to the child sex assault warrant being signed.
Jenkins was also being sought by the Lycoming County Sheriff’s Office on an arrest warrant dated July 13, 2011. The warrant charged Jenkins with failure to appear for a court hearing on drug-related charges filed against him by the Old Lycoming Township Police Department in late May 2011.
In mid July 2011, the Pennsylvania Board of Probation and Parole issued an arrest warrant against Jenkins, charging him with violation of his state parole. In January 2006, Jenkins was arrested on various narcotics charges in Lycoming County. In March 2008, he was convicted and received a 14 to 60 month state prison sentence. He was released from the Pennsylvania Department of Corrections in May 2010, and placed on state parole supervision.
On October 19, local authorities requested the assistance of the U.S. Marshals Service to locate and apprehend Jenkins. This case was adopted by the U.S. Marshals Service’s Fugitive Task Force in the Middle District of Pennsylvania.
U.S. Marshals based in Williamsport investigated several leads on the possible whereabouts of Jenkins. On October 24, U.S. Marshals developed information that the fugitive may be hiding in the State College / Bellefonte area in Centre County, Pennsylvania.
During the late evening hours of October 24, U.S. Marshals located and arrested Jenkins at a house in the 100 block of Faust Circle in Bellefonte. The fugitive was found hiding in a bathtub in the master bathroom. He was taken into custody without further incident.
Jenkins, 36 years of age, was lodged in the Lycoming County Prison, pending future court hearings.
United States Marshal Martin J. Pane stated, “The U.S. Marshals Service is committed to arresting fugitives charged with serious felony offenses, especially those wanted for sex crimes against children. By working with our partners in state and local law enforcement, we will ensure they are ultimately brought to justice.”
U.S. Marshals were assisted by several agencies that comprise its M/PA Fugitive Task Force. This included officers from the Lycoming County Sheriff’s Office and the Penn College Police Department. The Pennsylvania Board of Probation and Parole also provided support at the arrest scene.
The capture of Jenkins demonstrates the effectiveness of U.S. Marshals Service personnel in locating and arresting fugitives in a timely fashion. The concept of all USMS-led fugitive task forces is to seek out and arrest the nation’s most dangerous and violent offenders.”
Wednesday, November 2, 2011
EX-UN EMPLOYEE FOUND GUILTY OF FRAUD
Friday, October 21, 2011
Former United Nations Employee Found Guilty of Fraud
WASHINGTON – Jeffery K. Armstrong, 52, of South Riding, Va., was found guilty today by a federal jury on nine counts of wire fraud for obtaining more than $100,000 in salary payments by fraudulently holding concurrent jobs at the United Nations (U.N.) and the National Labor Relations Board (NLRB).
The guilty verdict was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; and David P. Berry, Inspector General for the NLRB.
Armstrong was indicted on June 28, 2011, by a federal grand jury in the Eastern District of Virginia on nine counts of wire fraud for his scheme to defraud the U.N., an international organization committed to humanitarian and peace-keeping efforts, and the NLRB, an independent agency of the U.S. government.
According to evidence presented in the trial, in March 2008 Armstrong took a leave of absence from his position as a supervisory security specialist with the Department of the Army to accept a full-time position at the U.N. As an assistant chief of the Security and Safety Service at the U.N., Armstrong was responsible for all physical security of U.N. facilities in New York City, among other functions. According to evidence at trial, Armstrong received an annual salary from the U.N. of approximately $160,000. In February 2009, after working at the U.N. for almost a year, Armstrong applied for a position as chief of the security branch within the Division of the Administration at the NLRB in Washington, D.C. In April of 2009, Armstrong became a full time employee at the NLRB, with an annual salary of approximately $121,000.
From approximately April to September 2009, Armstrong was an employee of both the U.N. and the NLRB. Armstrong concealed his dual employment from both employers by, among other things, dissuading NLRB personnel from contacting his supervisor at the U.N., submitting incomplete or inaccurate employment forms to the NLRB, and causing to be mailed to the NLRB false correspondence suggesting that he no longer worked at the U.N. In addition, Armstrong submitted, and occasionally forged, medical leave documentation to the U.N., indicating that he was unable to work and was undergoing medical treatment, despite his full-time employment at the NLRB. According to evidence, Armstrong failed to notify his superiors at both entities of his concurrent employment and received more than $100,000 in concurrent salary.
Armstrong faces a maximum penalty of 20 years in prison when he is sentenced on Jan. 27, 2012.
This case was investigated by the FBI’s Washington Field Office and the NLRB Office of Inspector General. Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section and Assistant United States Attorney Karen L. Dunn of the Eastern District of Virginia prosecuted the case on behalf of the United States."
Former United Nations Employee Found Guilty of Fraud
WASHINGTON – Jeffery K. Armstrong, 52, of South Riding, Va., was found guilty today by a federal jury on nine counts of wire fraud for obtaining more than $100,000 in salary payments by fraudulently holding concurrent jobs at the United Nations (U.N.) and the National Labor Relations Board (NLRB).
The guilty verdict was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; and David P. Berry, Inspector General for the NLRB.
Armstrong was indicted on June 28, 2011, by a federal grand jury in the Eastern District of Virginia on nine counts of wire fraud for his scheme to defraud the U.N., an international organization committed to humanitarian and peace-keeping efforts, and the NLRB, an independent agency of the U.S. government.
According to evidence presented in the trial, in March 2008 Armstrong took a leave of absence from his position as a supervisory security specialist with the Department of the Army to accept a full-time position at the U.N. As an assistant chief of the Security and Safety Service at the U.N., Armstrong was responsible for all physical security of U.N. facilities in New York City, among other functions. According to evidence at trial, Armstrong received an annual salary from the U.N. of approximately $160,000. In February 2009, after working at the U.N. for almost a year, Armstrong applied for a position as chief of the security branch within the Division of the Administration at the NLRB in Washington, D.C. In April of 2009, Armstrong became a full time employee at the NLRB, with an annual salary of approximately $121,000.
From approximately April to September 2009, Armstrong was an employee of both the U.N. and the NLRB. Armstrong concealed his dual employment from both employers by, among other things, dissuading NLRB personnel from contacting his supervisor at the U.N., submitting incomplete or inaccurate employment forms to the NLRB, and causing to be mailed to the NLRB false correspondence suggesting that he no longer worked at the U.N. In addition, Armstrong submitted, and occasionally forged, medical leave documentation to the U.N., indicating that he was unable to work and was undergoing medical treatment, despite his full-time employment at the NLRB. According to evidence, Armstrong failed to notify his superiors at both entities of his concurrent employment and received more than $100,000 in concurrent salary.
Armstrong faces a maximum penalty of 20 years in prison when he is sentenced on Jan. 27, 2012.
This case was investigated by the FBI’s Washington Field Office and the NLRB Office of Inspector General. Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section and Assistant United States Attorney Karen L. Dunn of the Eastern District of Virginia prosecuted the case on behalf of the United States."
Tuesday, November 1, 2011
ATTORNEY GENERAL HOLDER'S SPEECH ON ILLEGAL PRESCRIPTION DRUGS
The following is from the Department of Justice website:
“Attorney General Eric Holder Speaks at the Operation Pill Nation II Announcement
Tampa, Fla. ~ Friday, October 28, 2011
Today marks an important step forward in our nation’s ongoing fight against one of the greatest public safety and public health epidemics of our time: prescription drug abuse. Along with three key leaders in this fight – DEA Administrator Michele Leonhart, United States Attorney for the Middle District of Florida Robert O’Neill, and Florida’s Attorney General Pamela Bondi – and with all of the federal, state, and local partners standing behind us – I am here to announce the results of Operation Pill Nation II: the U.S. government’s latest effort to target every aspect of the prescription drug supply chain, including the operators of rogue pain clinics, and unethical physicians and pharmacists.
This morning, law enforcement efforts led by the DEA and the U.S. Attorney’s Office here in Tampa have resulted in the arrests of 22 individuals – including 5 doctors and 2 pharmacists. This work builds on the success of the first Operation Pill Nation, which was launched last year to target rogue pain clinics in South Florida. As of today, these two operations have led to 118 arrests, the surrender of more than 80 DEA registrations, and the seizure of more than $19 million in assets; and they have helped to bring about the closure of at least 40 Florida pain clinics.
Our targeted, aggressive enforcement actions are sending a clear message that – here in Florida, which has long been the nation’s epicenter for the illegal distribution of prescription drugs – the days of easily acquiring these drugs from corrupt doctors and pharmacists are coming to an end.
And this progress hasn’t come a moment too soon.
Today, prescription drug abuse is the fastest-growing drug problem in the county – and contributes to nearly 40,000 deaths and almost $200 billion in health-care costs annually. It’s estimated that, nationwide, approximately 7 million people regularly use prescription drugs for non-medical purposes; and that, in the past year alone, one in seven teens abused prescription drugs to get high.
Over the last decade, fatal poisonings involving drugs like oxycodone and methadone have more than tripled. And prescription drugs now cause more overdose deaths than "street drugs" such as cocaine, heroin and methamphetamine.
Here in Florida, the problem has reached crisis proportions. Between 2005 and 2010, the number of oxycodone-related deaths in this state increased by 345 percent. That’s right, 345 percent. And, last year, of the estimated 53 million oxycodone doses sold to medical practitioners in the United States, more than 85 percent were purchased here in Florida.
The proliferation of “pill mills” we’ve seen across Florida in recent years has had a devastating impact far beyond this state. And prosecuting these operations – wherever they spread – has become a Department priority. In addition to the Pill Nation operations, just last month, the United States Attorney in Connecticut announced the arrests of 20 people – including three TSA agents and a Florida Highway Patrol Officer – for channeling tens of thousands of oxycodone pills from Florida to Connecticut.
As this – and our latest operations – show, we are fighting back. And, despite the size and scope of the problem before us, I believe that there is good cause for optimism.
When it comes to reducing prescription drug abuse, research has proven that targeted law enforcement efforts work. In addition to our strong focus on enforcement, the Justice Department also has taken steps to advance education, treatment, and policy solutions. And, all across the country, this work is making a difference.
By providing law enforcement with the tools, support, and information-sharing capabilities necessary to investigate drug sources, we’ve become more effective than ever at disrupting the trafficking of prescription drugs. One promising approach to choking off the supply chain is the deployment of DEA Tactical Diversion Squads, which maximize federal, state, and local law enforcement resources. These squads have taken our efforts to shut down “pill mill” pain clinics, prescription forgery rings, and illegal online pharmacies to a new level. They’re currently operating in 40 cities, including Tampa, Miami, and – I’m pleased to announce – Orlando.
In addition to advancing investigations and prosecutions, we’re also focused on prevention. Through outreach efforts like the DEA’s Red Ribbon campaign, and the development of new educational programs, we’re working to raise awareness about the signs and dangers of prescription drug abuse. We’re also helping law enforcement officers connect directly with doctors – and enabling physicians to utilize the information available from state Prescription Drug Monitoring Programs, which are among our most effective tools in preventing patients from “doctor shopping.”
But physicians aren’t the only supply source. Recent surveys show that more than half of those who admit to abusing prescription painkillers said they got drugs "from a friend or relative for free"– and not from their doctor. Without question – getting old, unused, or expired drugs out of our medicine cabinets is critical. That’s why, beginning last September, the DEA has sponsored two Prescription Drug Take Back Events. During the last two “Take Backs,” more than 300 tons of prescription drugs were collected nationwide. And our next one will be held tomorrow.
At more than 5,000 collection sites across the country – including one at Tampa’s Museum of Science and Industry – people will be able to drop off prescription drugs to be disposed of safely, at no cost and with no questions asked. And I urge all of you to help us spread the word.
In addition to effective drug prevention and treatment programs, we must also support regulatory and policy improvements – just like the ones we’ve seen here in Florida.
Thanks to the leadership and advocacy efforts of many of the people in this room, as of September 1st, Florida law now prohibits doctors and clinics from dispensing pain medicine on-site – and requires patients to go to a pharmacy to fill their prescriptions. Regulatory changes have also allowed doctors to access more up-to-date information on this state’s Prescription Drug Monitoring Program.
As a result of these improvements, in recent weeks, we’ve seen a dramatic decline in oxycodone prescriptions and sales. However, DEA has also seen a drastic spike in the number of new pharmacy applications, often from those totally unqualified to own and operate them. These applications are being reviewed carefully – and those that, in the past, would have become little more than “pill mills” are being denied.
The state of Florida – once the leading source of America’s prescription drug problem – is now becoming part of the solution. And, together, we’re proving that changes in state laws, accompanied by robust enforcement, can achieve powerful results – and help to alter dangerous behaviors.
As progress continues to be made here in Florida – and across the country – I want to assure you that the Justice Department’s commitment to preventing and combating prescription drug abuse will continue. And, for as long as they’re needed, aggressive takedown operations like Pill Nation I and II will be an integral part of our work. I want to thank everyone involved in these operations for their outstanding contributions, and for their ongoing efforts in addressing – and overcoming – the problem of prescription drug abuse.”
“Attorney General Eric Holder Speaks at the Operation Pill Nation II Announcement
Tampa, Fla. ~ Friday, October 28, 2011
Today marks an important step forward in our nation’s ongoing fight against one of the greatest public safety and public health epidemics of our time: prescription drug abuse. Along with three key leaders in this fight – DEA Administrator Michele Leonhart, United States Attorney for the Middle District of Florida Robert O’Neill, and Florida’s Attorney General Pamela Bondi – and with all of the federal, state, and local partners standing behind us – I am here to announce the results of Operation Pill Nation II: the U.S. government’s latest effort to target every aspect of the prescription drug supply chain, including the operators of rogue pain clinics, and unethical physicians and pharmacists.
This morning, law enforcement efforts led by the DEA and the U.S. Attorney’s Office here in Tampa have resulted in the arrests of 22 individuals – including 5 doctors and 2 pharmacists. This work builds on the success of the first Operation Pill Nation, which was launched last year to target rogue pain clinics in South Florida. As of today, these two operations have led to 118 arrests, the surrender of more than 80 DEA registrations, and the seizure of more than $19 million in assets; and they have helped to bring about the closure of at least 40 Florida pain clinics.
Our targeted, aggressive enforcement actions are sending a clear message that – here in Florida, which has long been the nation’s epicenter for the illegal distribution of prescription drugs – the days of easily acquiring these drugs from corrupt doctors and pharmacists are coming to an end.
And this progress hasn’t come a moment too soon.
Today, prescription drug abuse is the fastest-growing drug problem in the county – and contributes to nearly 40,000 deaths and almost $200 billion in health-care costs annually. It’s estimated that, nationwide, approximately 7 million people regularly use prescription drugs for non-medical purposes; and that, in the past year alone, one in seven teens abused prescription drugs to get high.
Over the last decade, fatal poisonings involving drugs like oxycodone and methadone have more than tripled. And prescription drugs now cause more overdose deaths than "street drugs" such as cocaine, heroin and methamphetamine.
Here in Florida, the problem has reached crisis proportions. Between 2005 and 2010, the number of oxycodone-related deaths in this state increased by 345 percent. That’s right, 345 percent. And, last year, of the estimated 53 million oxycodone doses sold to medical practitioners in the United States, more than 85 percent were purchased here in Florida.
The proliferation of “pill mills” we’ve seen across Florida in recent years has had a devastating impact far beyond this state. And prosecuting these operations – wherever they spread – has become a Department priority. In addition to the Pill Nation operations, just last month, the United States Attorney in Connecticut announced the arrests of 20 people – including three TSA agents and a Florida Highway Patrol Officer – for channeling tens of thousands of oxycodone pills from Florida to Connecticut.
As this – and our latest operations – show, we are fighting back. And, despite the size and scope of the problem before us, I believe that there is good cause for optimism.
When it comes to reducing prescription drug abuse, research has proven that targeted law enforcement efforts work. In addition to our strong focus on enforcement, the Justice Department also has taken steps to advance education, treatment, and policy solutions. And, all across the country, this work is making a difference.
By providing law enforcement with the tools, support, and information-sharing capabilities necessary to investigate drug sources, we’ve become more effective than ever at disrupting the trafficking of prescription drugs. One promising approach to choking off the supply chain is the deployment of DEA Tactical Diversion Squads, which maximize federal, state, and local law enforcement resources. These squads have taken our efforts to shut down “pill mill” pain clinics, prescription forgery rings, and illegal online pharmacies to a new level. They’re currently operating in 40 cities, including Tampa, Miami, and – I’m pleased to announce – Orlando.
In addition to advancing investigations and prosecutions, we’re also focused on prevention. Through outreach efforts like the DEA’s Red Ribbon campaign, and the development of new educational programs, we’re working to raise awareness about the signs and dangers of prescription drug abuse. We’re also helping law enforcement officers connect directly with doctors – and enabling physicians to utilize the information available from state Prescription Drug Monitoring Programs, which are among our most effective tools in preventing patients from “doctor shopping.”
But physicians aren’t the only supply source. Recent surveys show that more than half of those who admit to abusing prescription painkillers said they got drugs "from a friend or relative for free"– and not from their doctor. Without question – getting old, unused, or expired drugs out of our medicine cabinets is critical. That’s why, beginning last September, the DEA has sponsored two Prescription Drug Take Back Events. During the last two “Take Backs,” more than 300 tons of prescription drugs were collected nationwide. And our next one will be held tomorrow.
At more than 5,000 collection sites across the country – including one at Tampa’s Museum of Science and Industry – people will be able to drop off prescription drugs to be disposed of safely, at no cost and with no questions asked. And I urge all of you to help us spread the word.
In addition to effective drug prevention and treatment programs, we must also support regulatory and policy improvements – just like the ones we’ve seen here in Florida.
Thanks to the leadership and advocacy efforts of many of the people in this room, as of September 1st, Florida law now prohibits doctors and clinics from dispensing pain medicine on-site – and requires patients to go to a pharmacy to fill their prescriptions. Regulatory changes have also allowed doctors to access more up-to-date information on this state’s Prescription Drug Monitoring Program.
As a result of these improvements, in recent weeks, we’ve seen a dramatic decline in oxycodone prescriptions and sales. However, DEA has also seen a drastic spike in the number of new pharmacy applications, often from those totally unqualified to own and operate them. These applications are being reviewed carefully – and those that, in the past, would have become little more than “pill mills” are being denied.
The state of Florida – once the leading source of America’s prescription drug problem – is now becoming part of the solution. And, together, we’re proving that changes in state laws, accompanied by robust enforcement, can achieve powerful results – and help to alter dangerous behaviors.
As progress continues to be made here in Florida – and across the country – I want to assure you that the Justice Department’s commitment to preventing and combating prescription drug abuse will continue. And, for as long as they’re needed, aggressive takedown operations like Pill Nation I and II will be an integral part of our work. I want to thank everyone involved in these operations for their outstanding contributions, and for their ongoing efforts in addressing – and overcoming – the problem of prescription drug abuse.”
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